A rise in songwriter royalties has prompted local producers to suspend work in anticipation of a long fight

A woman at the CD section of Nguyen Hue city Bookstore in District 1, Ho Chi Minh City. A recent rise in music royalties has sparked a debate between producers and fee collectors.

The Recording Industry Association of Vietnam (RIAV) recently announced that its members has suspended production until they can find a solution to the Vietnam Center for Protection of Music Copyright (VCPMC)’s recent royalty increase.

Industry officials made their announcement at a press conference last Friday, after VCPMC refused to postpone a set of dramatic royalty increases that will double the fees paid to songwriters by singers and recording studios.

In a letter to VCPMC, dated March 10, RIAV representatives stated that the increase will cause further difficulties for producers who are struggling to turn a profit amid rising input costs and rampant music piracy.

At last week’s conference, Truong Thi Thu Dung, director of Rang Dong Entertainment Inc (a member of RIAV) stressed that the latest increase will place unreasonable burdens on producers.

Meanwhile, Dung said, the fee increase will double the profits enjoyed by VCPMC members. At the moment, the copyright center charges a 25 percent fee on the royalties collected from songwriters and composers.

“We have been forced to suspend production. We’ll suffer heavy losses if we continue producing,” Dung said.

RIAV chairman Tran Chien Thang was equally blunt in his criticism of the new move by the copyright center.

“VCPMC only aims to collect copyright fees for songwriters, without thinking about singers and producers,” he said.

Representatives from the recording industry association have also criticized the agency for implementing the new fee scheme at the beginning of the year without discussion or notice.

In fact, the recording association didn’t know about the increase until a representative from Rang Dong tried to submit fees for a musical program in February, Dung said.

“If VCPMC plans to increase music royalties starting this year, it needs to inform RIAV beforehand so that we can better plan production and recalibrate our budgets,” she said.

Thang, who also serves as deputy minister of Culture, Sports and Tourism, said he wasn’t opposed to an increase in royalties, but stressed that VCPMC should have held talks before implementing such a drastic policy shift.

The new fee scheme means that producers will have to pay VND1 million (US$48.54) per song production, instead of VND500,000 ($24.27), if it is recorded on CDs or VCDs.

If the song is recorded on DVD, it will cost VND1.5 million ($72.82).

Tran Ngoc Tri, director of Saigon Vafaco, said the 100 percent fee increase is simply too much.

While the new fees may appear to benefit songwriters, he said, their success still depends on the work of producers.

“If VCPMC makes things difficult for RIAV, they will also be affected,” he said.

Thang said he will meet with Do Hong Quan, chairman of Vietnam Association of Musicians (which oversees VCPMC) to discuss the matter further.

“If I can’t arrive at an agreement with the Vietnam Association of Musicians, I will take my case to higher-ranking agencies,” he said.

Counter-attack

Dinh Trung Can, vice director of VCPMC, said the fee hikes are based on the agency’s survey of fees that songwriters charge singers and producers without via the agency.

The increase, he said, is based on “the market.”

“We hope that songwriters will benefit from better royalties,” he said. “It’s unreasonable that singers profit more from a new song via performance fees and CD sales than the composers and songwriters.”

VCPMC director Pho Duc Phuong said that the old fees have been in place for nearly a decade, during which many musical goods’ have increased 200-300 percent in price.

“Of course, songs are not vegetables or fish, but they are also goods and they are still affected by the market,” Phuong said.

“We are doing all we can to protect the interests of composers,” he said, adding that RIAV’s sales aren’t falling because of copyright fees increases, but because their business methodology is outdated.

Musician Le Minh Son, meanwhile, said that while he usually sells and produces his own music, he described the royalty increase as an “obvious” response to the current reality.

He said royalties are too low, and it’s unreasonable to use piracy as an excuse for not paying songwriters.

Chu Minh Vu, who has organized many musical programs, said that famous musicians may charge up to $1,000 per song – which is much higher than the new fees proposed by VCPMC.

“Sales have decreased because CDs fail to appeal to audiences (not because of high royalties),” Vu said. “In fact, copyright fees for songwriters are nothing when compared to the kind of money that singers get - especially stars.”

In an interview with Thanh Nien Weekly, renowned singer Duc Tuan said he pays royalties either through VCPMC or directly to songwriters and composers.

Tuan said he found the recent fee increase reasonable.

“The new fees won’t affect singers much,” he said.