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    China’s Music Industry Should Change Its Tune on Copyright Protections

    The industry’s intellectual property woes stem more from poor practices than malicious pirates.

    According to a 2019 report from the International Federation of the Phonographic Industry (IFPI), China is now the seventh-biggest music market in the world, with total sales of more than 374.7 billion yuan ($58 billion) the previous year.

    Despite its growing market power, however, the country’s music industry lags in one respect: Almost three decades after China joined the Berne Convention for the Protection of Literary and Artistic Works, there is still a widespread lack of awareness of the importance of copyright protections, not just among the public, but also among leading industry figures.

    Generally we associate music piracy with consumers looking for free access to their favorite songs. Even within China’s music industry itself, however, understandings of and approaches to copyright and intellectual property vary.

    There are historical and cultural reasons for this. During the Mao era, for example, China’s music industry and music education system was expanded and standardized, but most composers and performers worked for the state. Their compositions were a public good, collectively owned by society.

    Things started to change only after the country implemented market reforms beginning in the late 1970s. The proliferation of cassette tapes, which were more portable and cheaper to produce than vinyl records, led to a boom in consumption, including of pirated underground recordings of pop music from Europe, Hong Kong, and Taiwan. Sensing a business opportunity, cassette manufacturers on the Chinese mainland hired and paid musicians to cover hit songs from abroad, which were then sold in bulk across the country.

    These were extremely popular. A number of Chinese-language stars got their start recording and performing covers, including Mao Ning and Yang Yuying, and the producers of these cassettes made a fortune. But whether from cassettes played in secret or covers played in public, the original creators and copyright holders almost never saw any royalties.

    This untamed music industry forged a generation of pop music fans while accustoming Chinese listeners — if not the industry itself — to pay for music. Soon, Hong Kong and Taiwan record labels expanded onto the Chinese mainland, and in 1992 the country joined the Berne Convention. That same year, the Music Copyright Society of China was founded.

    These developments gave international labels a window, however narrow, to defend their intellectual property in China. Little changed in the domestic industry, however.

    In 1998, the U.S. passed the Digital Millennium Copyright Act. A year later, more than 10 record labels filed a lawsuit against music-sharing software Napster, marking a new chapter in the history of copyright protection.

    Although China passed a similar law in 2001, the country’s internet industry was still in its infancy, and neither online businesses nor record labels really considered digital music copyright a priority. This lack of oversight combined with the explosive growth of the internet caused chaos, as unlicensed music files circulated widely online, even on otherwise legitimate-seeming platforms.

    This situation persisted for years, until 2015, when the National Copyright Administration abruptly ordered streaming platforms to remove unlicensed music. Noncompliant streaming companies rushed to purge their libraries of unauthorized content — as many as 2.2 million recordings, by one estimate — and music fans suddenly found they no longer had access to many of their favorite songs.

    The takedown of vast libraries of unauthorized songs reshuffled the streaming industry, as major streaming apps like NetEase Music, QQ Music, and Xiami Music raced to sign licensing deals with record labels. Today, streaming platforms are often willing to pay a high price for exclusive rights to content, seeing it as a way to lure consumers into their ecosystems. According to IFPI’s 2018 Music Consumer Insight Report, 96% of listeners in China were listening to licensed music, significantly higher than the global average of 62%.

    That’s how I can be listening to a licensed stream of Boncana Maïga, a jazz musician from Mali, while writing this article in my Shanghai apartment. But we shouldn’t adopt too rosy a view of the situation: The Chinese music industry itself still has a very limited understanding of copyright, and a lack of professional knowledge continues to hinder the implementation of music property rights.

    To name just two examples, the music you hear when you’re out shopping at a mall is likely unlicensed, and cover artists might be singing unauthorized songs when they perform. In 2011, musician Gao Xiaosong complained that he’d only received live performance royalties once in 18 years.

    Matters have improved over the past nine years, but only haltingly. The most pressing bottleneck is a lack of legal talent. Chinese artists are accustomed to seeing themselves only as creators or employees, rather than as a brand or an entrepreneur. They also make only a small portion of their income from royalties, as opposed to live shows and product endorsements, so they rarely take a personal interest in business matters like copyright infringement.

    Meanwhile, copyright experts are clustered in traditionally prominent businesses like nationally run theaters, studios, and TV and radio stations, as well as the international record labels that have dominated the country’s music industry since the 1990s. Small and independent domestic labels generally don’t view copyright protection as a major concern, and don’t budget sufficient funds to lure experts or lawyers away from larger firms.

    The legal outcomes of copyright cases between musicians are also far from satisfying. Compared with other intellectual property lawsuits, it’s rare for music copyright-related cases to go to court. When they do, it quickly becomes clear that the punishments for violators are too weak to serve as an effective deterrent.

    As a lawyer, I often sum up Chinese music copyright lawsuits in four simple phrases: “Copyright infringement is easy; prosecuting it, hard. The costs are high; compensation, low.” Copyright owners usually spend a year or two on their lawsuit, only for the final settlement to be equal to — or sometimes less than — the cost of defending their claim. In 2018, outspoken folk musician Li Zhi sued a reality show for 3 million yuan for using one of his songs without permission. Although he won in court, the judge awarded him just 200,000 yuan.

    On the bright side, China’s growing commercial connectedness with the world has inevitably improved copyright awareness within its music industry. Tech titan Tencent announced in 2017 that they would swap stakes with Spotify, and two years later, the company led talks to buy 10% of Universal Music Group, the biggest music company in the world.

    These moves have spurred Chinese companies to rethink the value of their intellectual property. In my experience, a growing number have started reaching out for legal help and services, and the long-standing industry practice of operating without fixed contracts may finally be coming to an end.

    That’s a good thing. Members of the generation that discovered pop music on cassettes in the 1980s are now some of the most influential figures at the country’s record labels, theater companies, and talent agencies. If they can’t effectively protect musicians’ work, we’ll find ourselves in a situation where talented people are forced to produce cheap, disposable songs. And if that happens, we’ll all pay the price.

    Translator: Katherine Tse; editors: Cai Yineng and Kilian O’Donnell; portrait artist: Zhang Zeqin.

    (Header image: Xie Hao/IC)