Consumer choice has been revolutionized, as new models for consuming and accessing music are rolled out in new and existing markets. The number of paying subscribers to services such as Spotify and Deezer has leapt in 2011, from an estimated 8 to more than 13 million. At the same time, cloud-based services, such as iTunes Match, have become a reality in the marketplace, helping drive the popularity of music downloading.

The truth is that record companies are building a successful digital music business in spite of the environment in which they operate, not because of it. Figures in Digital Music Report (2012) show that more than 1 in 4 Internet users globally regularly access unlicensed sites that contain copyrighted music. This is a startling statistic that captures the challenges we face in developing a sustainable legitimate digital music sector.

We are undoubtedly making important progress in changing this environment, dealing with both peer-to-peer (P2P) and other forms of digital piracy. In the USA, music and film companies have agreed with Internet service providers (hereinafter ISPs) a new copyright alert system. In France, the Hadopi law has been successfully implemented, and research shows it is accepted and having an impact on consumer behavior.

South Korea, a pioneer of anti-piracy legislation which has required an effective role from ISPs in stopping infringement, is seeing continued market health. New Zealand implemented a new graduated response law in 2011, and surveys show it is already affecting consumer behavior positively. In Europe, a series of successful court actions required ISPs to block access to the Pirate Bay, prompting substantial reductions in users of that service (Digital Music Report 2012).

As to China, China’s music industry accrued $82.8 million in total sales in 2011, according to the International Federation of the Phonographic Industry (IFPI). But 76 % of that total revenue came from digital sales. In 2010, more than 70 % of the revenue from China’s music companies came from digital music sales, although the IFPI said that 99 % of the music in China was pirated (A record tailspin in Music Industry 2012). In recent years, affected by piracy and the Internet, China’s domestic music industry has been declining greatly (Great change in China’s Music Industry 2012). Instead of the music creators, the ISPs turned out to be the beneficiaries of the increasing trend of music digitization (CPPCC Deputy 2012).

On March 31, 2012, China’s National Copyright Administration of the People’s Republic of China (NCAC) published the Draft Amendment to the Copyright Law (hereinafter the “Draft Amendments”) at its Web site to seek public feedback. Some articles in the current Draft Amendments, such as Articles 46 and 48, have attracted the most attention from the public, especially the music industry, because they involve unauthorized use of copyrighted material. Under the Draft Amendments, some governmental organizations would be responsible for authorizing use of copyrighted works. Such Draft Amendments also have aroused great controversy among famous local songwriters. Among them, Gao Xiaosong, a famous singer–songwriter indicated that “the Draft clearly favored Internet.” Meanwhile, many people felt disappointed that Paragraph 1, Article 69, provides that ISPs which provide pure technical services have no examination obligation.¹

Therefore, this paper wants to discuss those controversial articles under the Draft Amendments and some other solution except legislation for musicians to face digital era with an aim to make a healthy development of digital music sector in China.

As mentioned above, on March 31, 2012, the NCAC released the Draft Amendments to the Copyright Law and the Brief Explanations on the Draft Amendments (“Brief Explanations”) for soliciting public opinions. Unlike the two previous revisions, the Draft Amendments proposed by China on its own initiative are homegrown.

The current Draft Amendments