Neway Music ordered to wind up after failing to pay HK$63 million debt

Neway Music has been ordered by the High Court to wind up due to its failure to repay HK$63 million debt.

According to multiple reports including the South China Morning Post, Neway Music, which handled the obtaining of music licences for Neway Group’s karaoke outlets, had objected to a petition filed by the Hong Kong Karaoke Licensing Alliance on 4 May. Neway Music said the court should have waited for the matter to be settled at the Copyright Tribunal. However, the judge said the amount involved was HK$63 million and Neway Music had never applied to stay the execution of the tribunal judgment, meaning that the debt was enforceable and due for payment. 

The Hong Kong Karaoke Licensing Alliance is a licensing body authorised by Sony Music Entertainment Hong Kong, Warner Music Hong Kong, and Universal Music. It negotiates and grant reproduction licenses of approved music videos to karaoke companies in Hong Kong. The alliance and Neway Music have long been in legal tussle in 2010. Previously in 2019, the Copyright Tribunal handed down its decision on a reference brought by Neway Music Limited concerning the reasonableness of the licence fees charged under a licence scheme operated by Hong Kong Karaoke Licensing Alliance for the reproduction of karaoke music videos. 

After hearing, the tribunal found that the structure and the rates of the back-catalogue repertoire of the alliance's karaoke server licensing scheme to be reasonable and made no variation to the same.

Neway founded its first karaoke outlet in Hong Kong in 1993 and expanded to other districts in the city as karaoke gained popularity. However, its business in recent years was declining, particularly amid the pandemic as karaoke outlets were forced to close by the government. Meanwhile, two of Neway outlets were sued for a number of issues, including outstanding rent, management fees, air-con charges, to name a few.  In June, one of Neway outlet in Kowloon Bay suddenly closed as the staff said it would undergo renovation, according to HK01, while it's also reported that Neway failed to pay the rent for its store at Yau Ma Tei from November 2020 onwards too. 

According to a recent PwC study, hardest hit sectors in Hong Kong’s E&M industry were those Live Music, Cinema and out-of-home advertising (OOH). These segments however show the biggest rebound in 2021, albeit from a low base in 2020.

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