They’re overcharging Berlin’s clubs and blocking your favourite Youtube videos. But is GEMA a monster or just a dinosaur?
September 6: Judging by the thudding bass and the parade of club logos along Kurfürstendamm, it seems as if Berlin’s entire party scene has decided to pack up and move west for a day. But the angrily scrawled signage hints at deeper goings-on. This is the second anti-GEMA demonstration since the music rights organisation announced its new fee system in April. What exactly is everyone protesting against?
“I heard Berghain will close,” says Konstantine, 19.
“I’m here because of what they’re doing with Youtube,” says Maria, 20.
“I just do the printing…” mumbles a dreadlocked art student selling “We Hate GEMA” t-shirts.
It’s easy to forget that the Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (Society for Musical Performing and Mechanical Reproduction Rights) was founded to protect musicians. The organisation dates back to 1903, when a group of German composers banded together to ensure that they earned royalties for public performances of their works. Now headquartered in Munich, GEMA is the only performance rights organisation in Germany, comprising some 65,000 members and overseeing international licensing for Sony, EMI and 170 other music catalogues.
But most Germans only know it as that frowning red rectangle on Youtube. Or as the sinister entity that demands money from kindergarten teachers copying music for their classrooms. Or – most recently – as the wet blanket trying to squeeze clubs to death.
Even in anything-goes Berlin, everyone agrees that musicians and composers should get paid for their work. But GEMA’s monopoly, its inscrutable royalty distribution system and its seemingly deliberate refusal to get with the times have made it the target of protests, criticism and ridicule.
The truth about tariffs
Some of GEMA’s enemies have even made violent threats. “It’s a dangerous job,” says marketing and communications representative Ursula Goebel. “I get emails from people who say they know where I go grocery shopping.” The 36-year-old PR veteran started with GEMA on June 1. “But I’d been talking to them since September. Maybe they already knew what would come.”
Two months earlier, GEMA had announced its plans to streamline its fee system for musical events in 2013. “We didn’t want to change the tariffs,” Goebel says. “The event team came up to us and said we have to organise it in an easier way.” The announcement went mostly unnoticed until June 26, when the newly formed FAIRplay coalition staged a demonstration outside the annual GEMA members’ gala in Prenzlauer Berg. At the same time, Berghain announced that it would be forced to close if the new fee structure was adopted. Suddenly, Berlin’s clubs found themselves at war.
One look at the new system reveals why. While live concerts remain relatively unaffected, venues that play recorded music will now have to pay GEMA 10 percent of their door income, calculated by multiplying the entrance fee by the size of the floor in square metres. Currently, clubs pay a flat rate of €10,000 to €20,000 per year. Under the new system, a 500sqm club charging €10 three nights a week will owe close to €78,000.
Goebel claims this drastic hike is only fair. “The Club Commission did an interesting study that says 17 percent of a club’s revenue comes from the entrance, 65 percent from drink sales, and 18 percent other sales. GEMA wants to take only 1.7 percent from their entire revenue.”
Berlin Club Commission head Olaf Möller now quotes the breakdown as 20/60/20. And in fact, no current club owner will admit to door takings of less than 30 percent. “On some nights it’s 45 percent,” says Tresor owner Dimitri Hegemann. “And all of that goes into the line-up”
The new fees are undeniably high, but club owners tend to exaggerate their potential impact. Schwuz’s Marcel Weber says his club will have to pay €84,000 per year, up from €11,000 – which might be true, if they charged €10-15 for parties instead of their usual €5-7. And few will admit that GEMA’s capacity calculations might work in the clubs’ favour. According to Hegemann, the 500sqm Tresor often packs in over 800 guests, which would reduce GEMA’s cut to about 6.2 percent of the actual door income.
No matter what happens, Berghain will definitely stay open. “Honestly, Berghain, Watergate and me, we know our business,” says Ben de Biel. As the former owner of Maria am Ostbahnhof and current Pirate Party spokesman, De Biel is doubly embroiled in the GEMA debate. Not long after the initial announcement, he gathered the owners of Berghain, Watergate, Tresor, Gretchen and Ritter Butzke to discuss the situation. “One possibility is, we go down with the entrance prices and raise the prices for drinking. But for sure, people who are less professional than we are, they will shut down.”
Klemo, owner of scrappy Rummelsberg hideout Sisyphos, might fall into that category. “We’re not gonna pay anything,” he says. “I don’t know how much more we’d have to pay, but we won’t pay it.” Sisyphos’ Friday-to-Monday blowouts would be particularly endangered by an addendum to the tariff: a 25 percent surcharge for events lasting over eight hours, which Goebel believes will affect “not so many clubs”.
Initially, the charge was 50 percent for events over five hours; GEMA’s July 24 compromise with the Bund Deutscher Karneval changed this, in addition to pushing back the tariff start date until April 1, 2013. If the Carnival can negotiate, why can’t the clubs? In fact, Möller has been representing the Club Commission as part of Livecomm, a Germany-wide music venue organisation currently in talks with GEMA. They finally opened negotiations on September 18 in a meeting that lasted just an hour and a half and yielded no results. The group will try again in early November, but Möller is “not optimistic”.
Livecomm is asking for too much, insists Goebel. “If they don’t want to pay for the music, then the musicians can’t make music anymore. And without new music, there would be no clubs.”
Black boxes and assumptions
If only it were that simple. Club owners claim they would gladly pay the 10 percent if they could be assured the money would go to the rightful authors of the music played. SO36’s Nanette Flieg, who at first says the nonprofit club will shut down if the tariffs remain, recants: “That whole unfair system… if that could be changed, we could pay more.”
It’s easy enough for GEMA to keep track of radio, film and television music. The playlist system for live performances, too, is fairly straightforward. But on any given club night, hundreds of different artists are played, many of them remixed or mashed up by DJs who must also be given their due.
Since 2006, GEMA has used the company Media Control to track plays via a system of ‘black boxes’ in 120 clubs throughout Germany. The devices record one hour of music per week; the recordings are then parsed and identified by a team of freelance listeners (including musicians and DJs). But this data is far from representative, and Berlin’s club owners are unanimous in their demand for an electronic monitoring system.
“I have Shazam on my Iphone,” says Goebel. “It can’t identify everything. When you’re doing a mash-up, you have a mixture of, I don’t know, 14-15 songs, and there’s no technology that can identify those songs.” She claims Media Control’s accuracy rate is close to 96 percent. “When there’s a technology that can be more than 96 percent accurate, we will use it.”
Many remixes and mash-ups are already registered with Beatport, Hegemann counters. And inaccuracies aside, it’s hard to imagine that a direct invoicing system based on electronic monitoring wouldn’t be more fair to artists than a random sampling of just four percent of clubs. But De Biel believes GEMA has an ulterior motive for eschewing the technology. “If they know exactly what is being played, they lose the GEMA- Vermutung.”
The Vermutung is the legal assumption, made because of GEMA’s vast monopoly, that the organisation holds the rights to every piece of music in Germany. It means that venues must pay GEMA fees unless they can explicitly prove they have played only non-GEMA songs. The elimination of the Vermutung is a key point in the Pirate Party platform and a personal matter for De Biel. At Maria, he says, “We played artists who are not represented by CDs or LPs. Maybe they had downloads, but they never had a published release.”
As a test, Olaf Möller asked GEMA to identify the songs on 12 10-song playlists gathered from Berlin’s clubs. Whether or not the results justified the GEMA-Vermutung depends on whom you ask: while Goebel says that 70 percent of the mix was GEMA repertoire, Möller says it was 53 percent.
The GEMA-Vermutung doesn’t only affect clubs. At the end of August, a court in Frankfurt ruled that the organisation had a right to demand fees from a CD released in January by the “Musikpiraten” collective. Although the CD’s tracks were licensed under Creative Commons, one artist used a pseudonym and could therefore have conceivably been a GEMA member.
Of De Biel and the Pirate Party’s pressure to repeal the ruling, Goebel says, “We know the posi- tions of the Piratenpartei. They say that copyright has no future, but we think that it does.”
Stuck in the past?
The more music distribution diversifies, the more GEMA attempts to tighten its grip. In January, the music streaming service Grooveshark became unavailable in Germany, citing restrictive licensing costs. And of course there is Youtube, which for the past two years has been in a legal stalemate with GEMA over streaming royalties. In February, Sony CEO Edgar Berger made headlines for describing GEMA as costing his company “millions in revenue.”
“We want to work with the musicians and Youtube,” Goebel says. “But it’s also the task of the members. The young people have to re-organise and develop GEMA so we are prepared for the future.”
GEMA’s tiered structure makes this a difficult proposition. Due to a 1948 ordinance, only ordentliche (full) members have full voting rights; to be eligible for this level, artists must receive €30,000 in royalties every year for five consecutive years. These 3400 people make up just five percent of members, yet they receive 60 percent of GEMA’s royalties. They are mostly film and television composers, established classical artists and Schlager songwriters, and the current system suits them just fine.
While the odds aren’t in their favour, dissatisfied GEMA members do stand a slim chance of effecting change from within. “I don’t know how many full members are electronic musicians,” admits Goebel. “But there are many electronic artists who could become full members and don’t want to. And every member can submit an application if they have an idea. If they want to improve the club monitoring system, they can submit an application. So far, nobody has done that.”
What’s the alternative?
As discontent with the organisation rises, many artists are contemplating leaving GEMA altogether. Although completely extricating oneself from membership can take up to five years, Hegemann holds out the hope for GEMA-free nights in Tresor’s future. “We might call DJs who are members and say, did you ever get money from GEMA? Maybe you don’t need them. And we can give GEMA-free artists more money.”
“You’re not forced to become a member of GEMA,” says Goebel. “There’s no monopoly. It’s a de facto monopoly, but have you heard of C3S?”
C3S is the Düsseldorf-based Cultural Commons Collecting Society, founded by music startup veterans Wolfgang Senges and m.eik Michalke with copyright law specialist Michael Weller. The three came together in 2010 with the goal of convincing GEMA to allow members to release selected works under Creative Commons. When this failed, a subsequent meeting with the German Patent and Trademark Office inspired them to draw up plans for a pan-European performance rights organisation based around Creative Commons licensing and open source software.
“The infrastructure of C3S will be built on the latest technology,” says Senges. “For monitoring, licensing and reporting playlists, there are providers like djmonitor.com and kollector.com. And we need to allow for all-member voting across Europe.”
The idea of a democratic and technologically adept GEMA alternative is catching on in Berlin. There’s just one problem: the society won’t exist for a very long time. “There are some challenges,” says Senges. “This is way beyond your startup next door. And we need a ‘critical mass’ of creatives who would consider joining us.” Senges is currently collecting signatures of support at www.c3s.cc, but he estimates that the society will not be up and running until 2014 at the earliest.
In the meantime, the best tool for GEMA members and opponents alike is information. But obtaining it might be tricky. “People are saying a lot of wrong things because the GEMA organisation is too complex,” concedes Goebel.
If even GEMA itself admits that it is too complicated, it might be time for the organisa- tion to realise that the 2012 music industry can’t be navigated using 1903-era rules. Until then, GEMA remains a dinosaur: too large for its own good, encumbered with useless appendages, lumbering gracelessly through a digital landscape that has long evolved beyond it.