Free movies may no longer be available in the country's Internet cafes or on long-distance buses starting May 15.

But experts and Internet service providers have questioned the proposed rule on copyright royalty collection, which is forcing the move.

The Film Copyright Society of China said it will begin collecting royalties from Internet cafes and long-distance bus operators through a digital distribution platform.

The platform was developed by a company called Beijing Zhonglu Wangshang, a joint venture of online video provider Netmovie.

Li Feng, CEO of Netmovie, said the platform will be expanded nationwide on May 15, covering pilots in 31 provinces, National Business Daily reported on Tuesday.

The platform has been on trial in five cities since late April, said the National Copyright Administration.

The copyright administration has authorized the film society to issue permits, collect and disperse royalties and uphold copyrights.

Yao Min, deputy director of the Film Copyright Society's operations department, said that the royalty rate for Beijing Internet cafes would be 0.15 yuan (US$2 cents) per computer per day, while the rate for long-distance buses in more than 20 cities would be 365 yuan per bus per year.

Yao said the film society has also been considering collecting royalties from video-on-demand services at hotels.

The society will take 10 percent of collected royalties as a management fee and distribute the rest to copyright holders, Yao said.

The proposed schedule for fee collection has been submitted to the copyright administration for approval, Yao said.

However, no final announcement has been made.

In Haice Internet cafe in Beijing, the owner, surnamed Ma, said on Tuesday he had not received any notice to install the platform yet.

"We currently hire a third party to maintain a server so customers can watch movies on our computers," he said, adding his cafe was paying an annual fee of 2,000 yuan for the server.

With 160 seats in the cafe, Ma said he was not making a lot of money each year, and the royalties would be a burden on the business.

As to whether the cafe will raise its fees to make up the royalties, Ma said his cafe is a chain and cannot change fees independently.

Feng Xiaoqing, deputy director of the center for intellectual property studies at China University of Political Science and Law, said it is illegal to force Internet cafes to install the platform.

"I would expect the company that developed the platform to be for-profit. It's OK to operate the platform based on the free will of cafe owners, but it's not reasonable to force everyone to accept the service. I fully support the protection of movie copyrights, but there are other ways," Feng said.

He also said regulatory bodies should make sure the money goes to copyright holders.

"A reasonable and fair system is key to copyright protection. It should be clear as to how the money is actually distributed," Feng said.

Posts by netizens echoed Feng's point, casting doubt on the authority of the Film Copyright Society of China and the platform, saying it was quite impossible for Internet cafe owners to be free from intellectual property disputes simply by installing such a platform, as claimed in the company's press release.

(China Daily May 5, 2010)