BEIJING - Liu Qing is worried about the movie copyright fee that is about to be imposed on his Internet cafe.

He operates two cyber cafes with 260 desktop computers in total in Yueyang, a lakeside city in central Hunan province.

Customers using computers at an Internet cafe in Beijing. According to a regulation released last week by the Film Copyright Society of China, Internet cafes should be charged for movie royalties as early as Jan 1, 2010 - first in eight provinces and municipalities such as Beijing and Jiangsu and then across other parts of the country. [Photo / Bloomberg]

Although less developed than many provinces, Hunan is listed as one of the top five in China for cyber cafe numbers. They offer online games, movies and free music for low-income young workers - all at a very cheap price in the region of 2 yuan ($0.30) an hour for each terminal.

Running an Internet cafe business is not the easy business it once was. As people's personal wealth rises, they tend to surf at home, Liu said.

The young man married three years ago. His wife prepares their daughter, aged 1, for bed every evening, without her husband. He is either working or dozing on a red sofa in one of his cafes.

"The business shrank nearly 20 percent compared with last year. Only during the holidays did my Internet cafes experience an attendance of 90 percent of capacity. Several years ago a full house was common," said Liu.

If the Chinese government does levy a copyright fee on his cafes' consumers watching online domestic movies, for example 0.24 yuan a day for each terminal, Liu said he would suffer a loss of at least tens of thousands of yuan in net profit a year, a big sum for his family.

According to a regulation released last week by the Film Copyright Society of China (FCSC), Internet cafes should be charged for movie royalties as early as Jan 1 - first in eight provinces and municipalities such as Jiangsu and Beijing and then across other parts of the country.

The FCSC is a national organization that is officially authorized to oversee all domestic movies and tries to protect them from copyright infringement. In addition to Internet cafes, long-distance buses, airplanes and trains are also included in the list of those who may have to pay fees to the organization.

Zhu Yongde, director-general of the organization, said Chinese film copyright owners did not get any benefit from playing movies through Internet cafes, a situation that was not fair.

"Box office returns account for a mere 20 percent to 25 percent of the total revenue of films made in the United States. The rest is from copyright fees collected through the Internet, hotels or buses," he said.

However, Zhu said movie makers in China rely heavily on box office revenue, something that has inhibited the quick development of the Chinese film industry.

The copyright fee will be calculated based on the number of terminals in every Internet cafe and their hourly charges.