9. August 2013–
German music rights collection society GEMA has a pretty bad rep. Known as the dinosaur of the music industry and a stickler for rules, its four-year-old copyright battle with YouTube has made the above notification a familiar and unwelcome sight. The strict exclusivity clauses GEMA imposes on its musicians and the difficulties they face getting across-the-board licenses haven't exactly improved the situation.
There's no denying that licensing societies are important – they're the organisations that divvy up and distribute artists' earnings from music plays. But at the moment, German artists have no real alternative to joining GEMA. Though some musicians have turned to Creative Commons licensing, this option has limited money-making potential.
Introducing GEMA alternative, C3S
Hold tight, because the situation might be about to change – collective rights society in the making C3S is trying to gather the capital it needs via a crowdfunding campaign to launch as an alternative to GEMA. So far, it has reached almost €60,000 of its €200,000 goal, with 52 days until the campaign ends.
"GEMA doesn’t really have transparent billing or accountability for the music that is played – you can’t say why a specific member is getting a certain amount off the licensee. We want transparency. You have the metadata and the playlist, which mean this is possible."
He's not a fan of the hierarchy at GEMA, where about 65 per cent of the dividends flow to the top five per cent of members (aka the most popular musicians). These members also have voting rights and can influence GEMA's decision making, which makes it likely that rulings are made to benefit these top-earners.
GEMA PR Manager Franco Walther doesn't see a problem with this, he told us that, in reality, the five per cent earn more than 65 per cent of the income through the high circulation of their work – but the society's solidarity principle dictates that a percentage of successful musicians' revenue flows to less successful musicians.
Senges still thinks it could be done better. C3S wants to offer a more democratic system by promoting transparency and only allowing musicians and creators voting rights – at GEMA, successful publishers and rights holders, for example, get a vote too.
"It isn't easy to build a collecting society"
This all sounds pretty reasonable, and some more competition could be just what GEMA needs to ditch its old-school reputation and catch up with today's music industry. In fact, it seems strange that no one has successfully risen to challenge GEMA before.
Senges tells us there’s a valid reason for this: “It isn’t that easy to build a collecting society. There have been people who wanted to start one, but the requirements to do so are high. You have to have a very good concept to come forward otherwise the risk for members is much too big. Most of all, you have to fulfil the requirements first to get the license from the DPMA (the German Trademark and Patent Office) to work as a collecting society."
That's why he went down the crowdfunding route, to attract members and media attention plus capital – investors aren't interesting in funding societies as C3S is not-for-profit, so won't bring them any returns. "We think the idea of having a cooperative and the idea of crowdfunding are very close, which is why it works."
What's the next step post-crowdfunding? "As soon as we are formed we will set up an office in either Cologne or Dusseldorf. Some of us live there and we also had several talks with politicians from here, so the signs are positive to go in this direction and not, for example, to Berlin where everyone else is", Senges said.
Could GEMA plus C3S be the perfect solution?
What came as a surprise to us is that C3S isn’t at loggerheads with GEMA – and they don't need to be mutually exclusive. The two even host workshops and panels together to teach artists how collecting societies work.
Senges has a good idea how they could collaborate on licensing – artists with a focus on online music plays would probably be better off with C3S, while artists targeting more conservative domains such as broadcast media would probably still find GEMA a better fit.
Dual licences could give artists the best of both worlds. For example, while GEMA is currently going head-to-head with YouTube to increase pay-outs to artists, Senges said for a lot of artists, any amount of money would be better than nothing right now. "We would try and get our artists a different agreement with YouTube."
German musician and songwriter Alina Wichmann (left) agrees it's time for artists to see the profits from online portals: "I really hope C3S can finally tap the online market for us and I'd welcome a collaboration between GEMA and C3S. It's definitely time musicians make money from YouTube and co, especially as some of our intellectually property has already been used for years without us receiving any of the money we deserve."
Not everyone's convinced. Music publisher, singer-songwriter and GEMA member Michelle Leonard thinks finding a way to get artists the revenue they deserve from online portals – whether it's YouTube or Spotify – is the real problem facing collecting societies today. She's not sure C3S will be able to do this any better than GEMA, as both have to go through the same avenues to reach an agreement with portals like YouTube.
"GEMA has gotten this bad reputation, but really it is the only one showing any backbone in fighting for the rights of musicians", she said. "What annoys me about C3S is they don't say how they want to improve the situation for artists online. They are selling something that is cool, but aren’t giving any facts on what they are planning to change."
Championing a popular cause
For now, GEMA doesn't seem too concerned that the newcomer will shake its position in the German music industry. Walther told us the society is relaxed about facing new competition – considering GEMA is over 100 years old and hasn't faced any real opposition so far, this complacency makes sense.
Newcomer C3S has received overwhelming support – from the media at least. After all, there's no denying GEMA doesn't offer the ideal solution for modern musicians. Yet, at least until the end of its crowdfunding campaign, whether it'll gain enough support to launch is still unknown. The more pertinent question, though, is will it really improve the situation for musicians?
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