Royalties sought for iPods, recorders

The Agency for Cultural Affairs plans to force manufacturers of portable music players, such as Apple Inc.'s iPod, and digital video recorders with built-in hard drives to pay royalties to copyright holders.

The manufacturers are expected to strongly oppose the plan because it will be hard for them to pass on to consumers the royalties that will total billions of yen a year. But copyright management groups are expected to have their way, sources said.

The draft plan will be proposed at a meeting today of the Council for Cultural Affairs.

Fees are already charged for home recordings of copyrighted content, including music and TV programs, using mini-disc (MD) recorders, DVD recorders and other digital devices.

The fees, which are several percent of the prices of the devices, are covered by the manufacturers, who pay about 3 billion yen in total a year to the Society for the Administration of Remuneration for Audio Home Recording.

But digital portable music players and HDD recorders are not covered under the current royalties system.

The agency's advisory panel has been discussing the issue in detail since 2005 at the request of copyright management entities, including the Center for Performers' Rights Administration, following the release of new types of digital recording devices.

While digital portable music players and HDD recorders face new levies, personal computers and mobile phone handsets designed for general purposes will be exempted, even if they contain recording functions, according to the plan.

The specific rates for the royalties will be determined through deliberations between the agency, copyright management groups and the manufacturers. They are expected to be several hundred yen for each device, totaling several billion yen a year for the makers.

At today's meeting, representatives of the manufacturers are expected to voice opposition to the plan because they do not think they can pass on the additional costs to consumers.

However, the copyright management groups are expected to warn that if the remuneration plan is not implemented, they will not agree on the introduction of "dubbing 10," scheduled to start June 2.

Under eased copyright rules, dubbing 10 will allow users of home digital recorders, such as HDD recorders, to make an initial recording plus nine copies, including digital TV broadcast programs, instead of the current one-time-only system.

Copyright management groups expect manufacturers will accept the royalties plan before the Beijing Olympics in August, when demand for HDD video recorders will increase.(IHT/Asahi: May 8,2008)