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Royalty changes strike sour note among Japan's music teachers

TOKYO -- Japanese music educators are preparing to sue a copyright management group over a plan to charge fees for playing songs in the classroom, a dispute that turns on the question of what constitutes a public performance.
Ten years of talks
At issue is a decision by the Japanese Society for Rights of Authors, Composers and Publishers, or Jasrac, to collect royalties when songs are played in music classes for instructional purposes, arguing that rights to such performances legally belong to the copyright holders.
The dispute, which came to light in February, came after more than a decade of ultimately fruitless negotiations with music educators including the Yamaha Music Foundation, which is affiliated with Yamaha Corp. The two sides have since exchanged letters but apparently have not met for in-person talks.
A council formed by music school operators such as the Yamaha Music Foundation and Kawai Musical Instruments Manufacturing will hold a general meeting here May 30 to canvass members' opinions on a lawsuit against Jasrac. A straw poll beforehand found that about 80% of the nearly 350 member companies and organizations favor legal action.
"Talks are going nowhere, so we have no choice but to sue," Wataru Kunugi, a Yamaha Music Foundation director, told The Nikkei on Tuesday. The group intends to file a lawsuit in the Tokyo District Court as early as June to seek confirmation that schools have no obligation to pay royalties on the use of songs in their classes.
Japanese law states that the creator of a work holds exclusive rights to performances "with the purpose of having [the work] seen or heard directly by the public." The music educators argue that this does not cover playing part of a piece as an example for students.
Jasrac contends otherwise. It still intends to go ahead with a plan to levy fees on music schools equivalent to 2.5% of their tuition revenue. A draft of the proposal will be submitted to the Agency for Cultural Affairs in July, with collection to begin next January.
Same goal, different interests
Neither side can afford to budge. Yamaha Music Foundation takes in about 40 billion yen ($354 million) in annual revenue from music classes. Because the organization is a public interest foundation, this does not show up in Yamaha Corp.'s group earnings. But the company sees the establishment of a music culture in Japan expanding the market for its musical instruments.
However, the foundation had just 390,000 domestic students at the end of June 2016, down more than 20% from 2010, due partly to Japan's declining birthrate. Kawai and other music school operators likely face similarly bleak outlooks. Royalties would be an added burden they hope to avoid.
Jasrac collects royalties from restaurants, television broadcasters and many others for distribution to copyright holders including lyricists, composers and songwriters. The organization holds a near monopoly in Japan, controlling more than 90% of the market.
But royalty income has remained broadly flat for the past several years, hovering around 110 billion yen a year. The music market is also undergoing a structural shift as consumers move away from CDs. President Michio Asaishi has talked about expanding royalty collection since taking the helm last June.
Many experts say Jasrac has a slight edge over the music school operators, citing legal precedents. "I think performances for educational purposes may fall under performance rights," said Waseda University professor Tatsuhiro Ueno.
Both sides agree on the general goal of protecting Japan's music culture, but the devil is in the details. Yet another battle over copyright issues will be left to the courts.