VietNamNet Bridge – A heated dispute between recording studios and the association of local musicians over the latter's request to double royalties has brought the industry to a standstill.

The Viet Nam Centre for Protection of Music Copyright (VCPMC), which represents songwriters and collects royalties on their behalf, has just announced it would double royalties from VND500,000 to VND1,000,000 (US$24-48) for every song recorded in any CD or VCD from now on.

It said the decision followed a conference held at the end of March in which most of its musician members called for a significant mark-up in royalties because the current rates lagged far behind inflation.

The centre said that the existing royalty, which it negotiated with the Recording Industry Association of Viet Nam (RIAV) six years ago and has not been changed since, does not reflect market reality any longer.

Each CD or VCD now costs between VND50,000 and 60,000 ($2.4-3.00) compared to just half the cost back in 2005, the centre said in an official letter sent to the RIAV.

"Prices of some commodities have doubled or even tripled in the last years, whereas royalty for songs has remained the same," said VCPMC director Pho Duc Phuong.

"Songs are also goods bought and sold in the market and should be regulated by market law," he said.

Chu Minh Vu, a music editor with Viet Nam Television (VTV) who has edited many records published by famous singers, said that royalties which singers pay directly to songwriters are several times that of the RIAV.

"Singer Hien Thuc paid VND2 million ($97) to the late songwriter Trinh Cong Son for each of his songs she sang in her new CD," he said, adding that such high royalties have been collected by Son's family for years.

However, the RIAV said VCPMC's request was selfish and completely ignored recording businesses' interests.

With the doubling of royalties, the copyright protection centre has exacerbated troubles that recording businesses are facing in the context of harsh economic conditions, said RIAV's deputy chairperson Truong Thi Thu Dung.

"We invest a lot in many phases of the production to transform songs from paper to CD's," she said, "But no sooner do we sell several thousand discs than pirated copies appear on market, inflicting big losses."

In fact, four planned CDs have been stalled by the royalty request, she said.

When the dispute entering a stalemate with no signs of concessions from both parties, the recording association held a press briefing last weekend to present its case.

"Frankly speaking, in current conditions with repeated price hikes, the royalty which has been effective since 2005 needs reviewing," said Tran Chien Thang, former deputy minister of Culture, Sports and Tourism and chairman of the RIAV.

However, he also warned that the rise in royalty could push prices of CDs so high that customers would stop buying them.

"Increase in prices also means loss of customers," he said. On the other hand, the chairman noted, VCPMC can also collect secondary royalties from ring tone services, restaurants, hotels, karaoke lounges, bars, discotheques, supermarkets, broadcasters, radios, bus and train operators, among others, who use recorded songs or music for commercial purposes.

VCPMC reported that it collected more than VND32 billion ($1.5 million) in all kinds of royalties last year for a year-on-year increase by 40 per cent. More than 60 per cent of this was from secondary royalties.

Huynh Tiet, a member of the RIAV's executive board, noted that under the Intellectual Property Law, songwriters can collect royalty every time their songs are used for a total of 50 years.

"So they can accumulate huge amounts of money over the years," he said, "They can't claim that they are unfairly treated."

In an official statement delivered to the press, the RIAV asked the VCPMC to keep the existing royalties until the end of the year.

VietNamNet/Viet Nam News