ed peto

Publishing is a tricky concept in China. The typical Chinese approach to intellectual property is that ‘ideas belong to everyone’, so while it is difficult to make money out of something tangible like a record or a download, it is VERY difficult to make anything from the intellectual property contained within it. The Copyright Act was only passed in China in 1991, so it is still early days.

The Mechanical Copyright Society of China (MCSC) was set up in 1992 as the sole administrator for composition but it’s effectiveness is often brought into question by the publishers. In the last few years, the majors have taken it upon themselves to either do their own collection or find independents to take it on for them.

While the MCSC claims that they maintain a good flow of revenue back to the western rights owners, there is no mechanical collection agreement in place between MCSC and, say, the MCPS in the UK. There is a 6% first-run mechanical (PPD) but the draw back is that you need to be a China registered company to collect direct from the MCSC. One way mainland international independents get around this problem is by dealing with The Composers and Authors Society of Hong Kong (CASH) who have a reciprocal representation agreement with MCSC and are more approachable/transparent.

The PRS entered an agreement with MCSC in 1995 but due to a non-existent airplay royalty system last year’s PRS China returns were roughly equivalent to the likes of Estonia, Jamaica and Kazakhstan. Up until amendments to the Copyright law in 2001, broadcasters were not obliged to pay publishing royalties. Now, six years after these amendments, there has been no real pay off. Such is the way in China - Surface impressions are all important and it often takes many years for public gestures of compliance to gain any traction in real-terms, if at all.

MCPS-PRS International Manager Liam Donnelly explains:

“PRS is working closely with MCSC by helping to lobby the Chinese authorities along with other international rights bodies, governments and the European Commission to bring about improvements in the Chinese collection system. These won’t happen overnight - indeed we’re taking a long term view of the market - but I think we’re making some progress.”

In truth, there really isn’t a lot of western content currently being broadcasted anyway but this situation will slowly improve - a very long-term view is the only way to go. Optimists are suggesting that broadcasters will be paying performance royalties by late 2008 but, knowing China, you might have to wait a lot longer.

As with other areas of the industry, digital is a glimmer of light as the payment structure actually has publishing factored into it at source. The accounting system is still far from perfected but this represents a tiny foothold in a relatively promising area. The unspoken consensus is that the industry is moving towards 10% publishing at source for Mobile and 8% for Digital. As I mention elsewhere, when you consider that a ringtone retails for 14 pence and even frontline western digital catalogue tends to be sold in the hundreds and thousands rather than the tens of thousands, no-one is going to be triumphantly high-fiving anyone any time soon.

Covers are hard to come by as the standard practice is for the songwriter to sell their songs lock-stock to the label, meaning that western practice seems awkward in comparison.

Ad syncs show promise. You do hear of the odd reasonable sync license but even major operators are regularly caught with uncleared tracks in campaigns, with no real repercussions. Once again, very early days and a sea-change in copyright attitude is required for this to become the staple it is in the west.

It really needs to be said that publishers are not having a fun time over here. There have been a couple of brave, pioneering outfits setting up shop but they have been met by a very bleak landscape and their futures are uncertain.

© Ed Peto 2007

NOTE: This is an extract from the ‘Access China’ report commissioned by UK Trade and Industry Department and British Underground.