Music royalty: The fight is on in Vietnam

The tug of war between the royalty collecting agency and show organizers in Vietnam remains fierce, with the latest case involving the live show of a veteran overseas Vietnamese singer, of which the organizer tried to delay royalty payments.

The issue of royalty payments for a live show of

famous overseas singer Khanh Ly in the southern province of Binh Duong, set to take place in October, has just led to the event being postponed.

Her two other concerts earlier this month in Hanoi and the central city of Da Nang were also overshadowed by the same problem.

Right before the show in Hanoi on August 2, Vietnamese composer Pho Duc Phuong, director of the Vietnam Center for Protection of Music Copyright (VCPMC), personally went to the performing venue and demanded payments from the organizer for the right to use several songs by eminent late Vietnamese composer Trinh Cong Son in the event.

According to Phuong, the concert organizer did not sign any contract with the center regarding the copyrights of the songs even though the VCPMC had sent a document on the issue to them 10 days before the show.

He noted that local singer Trinh Vinh Trinh, the younger sister and representative of late composer Trinh Cong Son, has assigned the center to protect the composer’s song copyrights since 2009.

A representative of the show organizer, Dong Dao Entertainment Company, admitted that the company had difficulty paying for the song copyrights as tickets did not sell as well as they had expected.

The issue finally ended with a brief meeting between the two sides only minutes before the concert began in the capital city.

Dong Dao Entertainment Company then reluctantly agreed to pay nearly VND200 million (US$9,414) in song copyright fees.

Despite the royalty conflict then, the “Khanh Ly in Da Nang” live show took place on August 8 as scheduled.

Dong Dao paid VND262 million ($12,332) in royalties for Son’s songs in Khanh Ly’s first show in May 2014 in Hanoi, which means some VND11 million in royalties for each song.

However, the company representative told the Tuesday press conference that they will not pay the royalties for Ly’s two August shows in Hanoi and Da Nang according to the rates requested by the VCPMC, as the rates are unreasonably high compared to those charged for Trinh Cong Son’s songs in other shows and for songs by other famous composers.

For example, the company paid only VND1 million in royalties for each of the two songs by Pham Duy, another renowned Vietnamese composer, in Khanh Ly’s two August shows.

Son’s songs in other large shows were also charged VND500,000-600,000 apiece in royalties.

Royalties for Khanh Ly’s two shows are not an isolated case.

Over the past several years, the VCPMC has many times demanded royalties from many shows. Some of their attempts were successful, while others ended in failure.

In late July 2014, the center sent the Performing Arts Department, the Department of Culture, Sports and Tourism in cities and provinces a document on song copyright and royalty payment.

The center urged that the Performing Arts Department help them remind those involved to comply with regulations on copyrights and royalties, and refuse to grant permits to those with previous offences.

Attached was a list of 41 shows held between 2012 and 2014. The show organizers, most of whom are in Hanoi, have failed to pay the royalties so far.

Insistent on collecting royalties

Since 2014, the VCPMC has collected royalties in 20 areas, including performances, shopping malls, television and radio broadcasting.

There has been much dispute in most areas between the center and its “clients,” particularly in the performance area where the VCPMC collects royalties even in free shows, with fees ranging from VND400,000 ($19) to VND1 million ($47) for a piece of music.

For ticket-selling shows, royalties are calculated according to the formula of 5 percent x 75 percent (or 60 percent) of the number of seats x the average ticket price.

Hotels, restaurants, cafés, resorts, shopping malls, entertainment venues, supermarkets and office buildings are charged annually for their use of copyrighted songs.

Radio and television stations can pay royalties for copyrighted music pieces annually or after each broadcast.

As for royalties on cellphone ringtones and waiting tones, which currently bring in the highest royalties, copyright fees are paid according to users’ revenues.

The VCPMC also collects royalties on international songs performed in Vietnam and Vietnamese songs performed abroad, as the center has signed contracts with many foreign counterparts.

The center now boasts a local membership of over 3,000 and 55 contracts signed with copyright protecting agencies around the world.

According to Government Decree 79 released in 2012 regarding art performances, show organizers are only required to make a commitment in writing that they will pay royalties in order to be granted organization permits.

The VCPMC pointed out that many show organizers have taken advantage of this paperwork simplification to delay or evade paying royalties.

The center added that in several cases, show organizers sought permits for only one show before closing their companies, making it impossible for the center to collect their royalties.

These organizers can open another company to launch another show.

This is one of the reasons which have driven the VCPMC to take drastic measures in royalty collection.

Refusing to pay

Many show organizers, including reputable, long-standing ones, have refused to pay royalties.

Most find the VCPMC’s rates unreasonable and varying vastly from show to show.

Composer Phuong, the center’s director, admitted that there has yet to be legal documents which stipulate royalty rates.

For example, like organizers of many other shows, the organizer of overseas Vietnamese singer Bang Kieu’s live concert complained that the VCPMC charged it VND50 million ($2,353) for the show in Hanoi, and over VND120 million for that same show in Ho Chi Minh City.

They also added that the VCPMC’s formula to work out royalty sums is suitable only for shows with tickets sold out.

Show organizers noted that it would be fair if they paid royalties based on their actual number of tickets sold, adding that they should be allowed to pay royalties after the show ends and tax payment is made.

Several show organizers also choose to pay royalties directly to the composers whose songs they use.

In many cases, they also refuse to pay royalties as the VCPMC insists on copyright fees even for the new mixed versions of the songs, or choreographed dances.

Organizers of shows which feature foreign artists also will not pay royalties to the VCPMC, claiming that their payments to the artists already include royalties.

A few years ago, the VCPMC also caused quite a stir by demanding that the organizer of South Korean SuJu band show pay more than VND300 million ($14,120) in royalties.

The center also demanded royalties from Backstreet Boys‘ show though the American singers asserted that they had purchased all the songs they used in their March 2011 show in Vietnam.

Show organizers thus typically cite poor ticket sales and exorbitant production costs during negotiations with the VCPMC or include charitable activities in the shows to pay the lowest royalties possible.

They also try to negotiate directly with the composers on the royalty sums, though the composers do assign the VCPMC to collect royalties for them.

Show organizers can also choose to pay a certain royalty sum which they find suitable and persistently refuse to pay if the VCPMC does not agree to the sum.

In many cases, this worked because the copyright protection center had no choice but to accept the sum, or they would earn nothing at all.

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