Note the vague reporting about how parallel imports are the biggest threat to the "local music industry". Note also the suggestion that parallel importers are cheating the copyright holders of their royalties. This is completely untrue. The threat is not to the singers or musicians or producers. The threat is to the profits of the
middlemen, the local record distributors. Jacky, Jay and F.I.R. still continue to get whatever money they are supposed to receive from record sales.
What Parallel Imports AreAssume that the copyright owner resides in the United States. He gives an exclusive licence to A, a record company in Singapore to copy and distribute his music in Singapore (that is, he will not give a licence to anyone else in Singapore to copy and distribute his music in Singapore). At the same time, he gives a licence to B, a record company in China to copy and distribute his music in China. B or some other enterprising soul purchases and ships the authorised Chinese copies to Singapore and sells them in Singapore. They are imported in parallel to those sold by local Singapore record companies, hence, "parallel imports".
What Parallel Imports Are NotParallel Imports Not A Breach of ContractNo wrong is done contractually since the copyright owner has kept his part of the contract: he has given the licence only to A in Singapore to copy and distribute in Singapore. That copies under B's China licence have been shipped into Singapore and sold has nothing to do with A's contract with the copyright owner. And the copyright owner has no power/authority to prevent the importation of Chinese copies, only Singapore law can. And Singapore legislation was specifically amended to allow such importation.
Parallel Imports Don't Harm Copyright OwnersThe ultimate copyright owners (the singers, musicians, producers) don't lose out. They continue to receive their royalties from sale of the products from the Chinese record company.
Parallel Imports Only Harm the Greedy MiddlemenIt is only the local record companies that lose out because consumer demand leans, almost topples over, towards the cheaper parallel imports.
Ban on Parallel Imports Would Hurt ConsumersBy petitioning the government to make parallel imports illegal, these local record companies are essentially asking for protection against competition and for a monopoly in the Singapore market.
A monopoly without competition can never be good for consumers like us. It would mean that local record companies would be able to set any price for a CD because consumers would have no (legal) alternative but to purchase their products (counting mp3 downloads as different products).
As the quoted email reply from
MTI rightly pointed out,
"We operate a free market system which allows open competition among not only domestic firms and products, but also foreign firms and products. Consumers stand to benefit from wider choices and lower prices from such open competition."
In any case, it is already commonly argued that with the globalisation of markets being facilitated by the development of a global communication system (aiyah, the internet lor) envisages the end to domestic territoriality because of the rise of global competition. So all these artificial barriers to trade are like, so ten minutes ago
darlinks!
Get with the times! Instead of resorting to seeking restrictive trade practices and against-public-interest types of market dominance to be entrenched in law, local record companies should make use of the evidence that consumer demand for CDs is highly price elastic to lower their prices. That would most likely result in a disproportionate increase in demand for their licensed products (which don't have those strange Chinese hieroglyphics on them), in turn translating to a higher revenue flow for them.
Meanwhile, however, we can continue to enjoy the benefits of parallel imports (like being forced to improve our Chinese) with clear consciences and without stumbling others. :-)
PS: Actually, have thought of some ways that local record companies can get around this, and certain judges have concurred that it's possible. But let's not give anyone any ideas now. ;-)
PPS: I was advised to put in disclaimer/caveat/qualification/don't-sue-me statement. Here we go: I not lawyer, therefore this post does not constitute legal advice and should not be relied upon. It's just my layman take on the law that I rely on myself. Go pay a lawyer for his legal opinion. Or write an email to the nice people at
IPOS yourself.
Related post:
Copyright and the Christian