China is moving to lower the business threshold of running audio
and video chain stores in a move?analysts believe is designed
to counter pirated products and illegal downloading.
People who set up audio and video chain businesses in China can
expect an easier introduction as the minimum registration fee will
be reduced from five million yuan (US$625,000) to one million yuan
(US$125,000), according to the new rules.
For a large-scale company with branches across the country, the
minimum registration fee will be five million yuan (US$625,000).
This is down from 30 million yuan (US$3.75 million).
A spokesman of the Ministry of Culture?said yesterday
that?the market for audio-video chain stores was "shrinking"
because their high operational costs made it hard for them to
compete with street venders hawking pirated discs and a plethora of
websites offering free downloads.
The number of DVD and CD stores plummeted from 2,000 to 700 in
the southern city of Guangzhou, which is believed to be one of
worst hit in China by piracy.
Chain stores of audio-video products first developed in major
cities such as Beijing, Shanghai, Chengdu, and Shenzhen. But in
most of the cities, buying discs from chain stores is just not
popular, the spokesman said. Legitimate audio-video shops are
increasingly hard to find in downtown Shanghai, he added.
The regulations, released by the Ministry of Culture, will take
effect on December 1, 2006. Procedures for the application to set
up audio and video business are also expected to be simplified. It
will replace a previous regulation on wholesale, retail and lease
of audio and video products, enacted in March, 2002.
In another move to slash operational costs, the new regulation
also scrapped the rules on the size of chain stores, which means
that licenses will now be issued to "chain stores" barely larger
than a counter.
Cultural officials said the new regulations were designed "to
(provide) convenience to the sale of legal audio-video products and
set up barriers for the pirated ones." China has launched a string
of campaigns to ban pirated CDs and DVDs that are sold on the
streets for as low as 4 yuan (US$0.5) each.?
In September police said they'd destroyed nearly 13 million
pirated CDs, DVDs and computer software during a 100-day intensive
crackdown on piracy. Over 8,900 shops and street vendors were
closed down in two months, state police records.
According to the new regulations, shops found selling more than
100 counterfeit discs will face severe punishment and possibly have
their licenses suspended. Pirated discs and profits generated from
their sale will be confiscated, the regulations state, but shop
owners may be given more lenient punishments if they reveal the
source of the pirated discs.
Intellectual property rights (IPR) protection has been an issue
for China in its trade relations with the United States. On Tuesday
visiting US Secretary of Commerce Carlos Gutierrez described IPR
protection as a "huge problem" for China but the country was
"showing an increasing ability" to deal with the issue.
(Xinhua News Agency November 16, 2006)