Discussion On The Reform Of "The Statutory License Of Making Phonorecords" In The Digital Age

Since entering into the era of digital music,the well-ordered music industry within the physical phonorecord era seems to be off track.First of all,during the third amendment preparation of the Copyright Law,the songwriters collectively pressured to cancel "the compulsory license of making phonorecords".Then,digital music providers bid super high price to compete for the exclusive license of musical works,which forces the Copyright Office to talk with record companies and domestic major digital music providers,in order to curb the abnormal competition.In effect,all of the mess lies in the fact that "the compulsory license of making phonorecords"created in physical records time has already failed to keep up with the pace of technological development,and therefore needs to be reformed to adapt to the demand of the digital music era.Why the system of "the compulsory license of making phonorecords" cannot be sunset,why such system shall be extended to the Internet,and how to design the system to smoothly go through the process.This thesis will answer these questions in turns.The whole essay works in four chapters.The first chapter sets the basis of the thesis and,by analyzing the disputes over our compulsory license of making phonorecords,interprets this system in details.This compulsory license gets preliminarily improved from the 2001 revision of copyright law,and mainly borrows the legislation of other countries that time,therefore,ours also carries on the purpose and spirit of these legislations—antimonopoly,to prevent major record companies from monopolizing the reproduction and distribution rights of the musical works.This compulsory license only applies to the behavior of reproduction and distribution and excludes other behaviors such as communication via the Internet.In addition,this compulsory license also helped settle some problems earlier,such that monopoly has never arisen in our physical record industry,and that music listeners can enjoy different versions of one musical work.The second chapter states that communication of digital music requires the compulsory license.At present,owing to the absent of compulsory license of musical works in digital music transmission,a series of problems have popped out.Several digital music providers compete with each other for exclusive license of musical works in the price of billion RMB.In turn,once the monopoly has set,some phenomenon of prejudice to consumers would presumably occur.Such as,major digital music providers provide poor service with abnormal high price;these providers might force limited version of performance of one musical work and thus spoiling the diversity of musical culture;the industry of music cover would be destroyed by the monopoly players.The third chapter discusses the feasibility of the mode of the compulsory license in digital music environment,mainly targeting the U.S.mode.We share the same practical basis and problems with the U.S.in that the collecting societies fail to represent right holders sufficiently,songwriters complain that they always receive royalty that is tiny fraction of what they should have deserved,and digital music providers need a blanket license to use musical works.The "compulsory license plus a blanket license" proposed by the U.S.latest amendment is suitable to our country as a smooth transition.The fourth chapter is the conclusion part and offers detailed design of a set of rules and a piece of legislative suggestion.Based on above discussion,"the compulsory license of making records" should not only continue to exist and also extend to the Internet.In the meanwhile,to address the problem of a blanket license demand of popping musical works,our music collective organization shall immediately establish and maintain a database that connects the musical works and sound recordings,available to the public for free.In addition,starting from the biggest worries of the right holders,based on practice,the system is transformed from four aspects:the determination of royalty rate,the establishment of the supervision mechanism,the establishment of dispute resolution mechanism and the formulation of the penalty mechanism for non-payment users.The legislative proposal is to add the following provision after the third paragraph of Article 40 of the Copyright Law,"When phonorecords of a musical work have been interactively distributed to the online public under the authority of the copyright owner,any other person may obtain a statutory license,to make and distribute interactively online phonorecords of the work,or to distribute interactively online the phonorecords under the authority of the phonorecords makers,without the authority of the copyright owners,provided the payment of a statutory royalty.”...