Music industry fights online piracy, calls for paid services

Nearly 30 companies and organizations voiced support for licensed music and formed an alliance against online piracy on Jan 29 in Beijing.

The members include international music companies like Sony and Warner Bros, domestic music websites such as Kugou, Kuwo and 1ting and industry associations like the Music Copyright Society of China and International Federation of the Phonographic Industry. A number of musicians also joined in.

Cussion Pang, vice-president of Tencent, said at the alliance's inaugural ceremony that the sustainable development of the music industry depends on copyright issues and copyright protection is the only way to balance the interests of rights owners and users.

Xie Guomin, CEO of music copyright distributor Omusic, agreed and added that piracy "destroys the industry's ecosystem".

He said piracy existed because various sectors in the industry chain failed to work together to establish effective rules and practices.

"Years ago, all the music websites were full of pirated material, but many of them started to pay license fees recently," he said. However, rising fees have made it "increasingly difficult" for companies as the free service model means they cannot earn money from users, Xie said.

He said that rules were needed to promote paid services, which are "the mainstream operation model worldwide".

"Everyone knows that a paid service leads to better profits, but without rules, those who provide paid services die first because they lose users to the free service providers," he explained. Xie called for rules that would be "accepted by and mandatory to all sides".

"If only a few obey the rules, those who don't will have more room for illegal profit," he said.

Famous composer Li Haiying said he joined the alliance because it was difficult to defend his rights as an individual.

"I have filed lawsuits against big companies twice, but I am not supposed to do that often," he said. "An artist should not be busy dealing with litigation every day."

Li said that many young Chinese musicians "are creative, but for most of them, creativity does not lead to money".

A report by the Music Industry Promotion Committee said that China had 453 million online music users in 2013. Another report by the IFPI noted that the nation's digital music revenue in the same year was $82.6 million, which meant each user paid less than 20 cents a year on average.

Xiu Dapu, Sony's supervisor for copyright and legal affairs, said traditional phonographic companies also find it challenging to fight online piracy because the cost of breaking the law is very low.

"If pirated content is offline now it will go online again probably in the next hour," he said. "If we turn to lawsuits, we have to go through long procedures and it often works out that the compensation can be lower than an air ticket."

"The content on the Internet is not just binary codes, but artistic works, fruits of people's labor," said Liu Ping, vice-secretary-general of the MCSC. "It is irrational if a website does not count it in its list of major costs."

"Using unauthorized material may bring about profit temporarily, but the model will fail in the long run," he said.

The Jianwang Operation is an annual nationwide campaign that started in 2005 and fights against online copyright infringements. During the sixmonth campaign in 2014, 750 websites with unlicensed content were shut down and fined 3.52 million yuan ($562,345).

Zhao Jie, an official from the National Copyright Administration, said the administration would join hands with other authorities to launch the 11th Jianwang Operation this year, and online music would be a focus.

He said the regulations would expand to emerging distribution channels, such as smartphone apps.

Zhao also said that they "encourage industry associations to play an active role" in the fight against piracy.

An anti-piracy declaration and a self-discipline treaty were announced at the inaugural ceremony.