The German collection society GEMA in 2011 saw a decrease in its income of 4.3 percent and an increase in operating costs of 14.9 percent. The yearly report was announced today by GEMA CEO Dr. Harald Heker in Munich.
In 2011, the rights organization collected €825.5 million in total for rights-owner worldwide. This is a decrease of €37.5 million (down 4.3%) compared to 2010. The operation costs increased from 14.7 percent to 14.9 percent. "Despite the decrease GEMA solidly managed the difficult economical year of 2011", Heker said in a statement.
For the business year of 2011, GEMA again reported a strong decrease from the record-market. In 2011, the income from sound-carriers was €112.4 million (versus 2010: €1402.2). The total income from the online business increased. In 2011 it resulted in €21.2 million (2010: €13.3 million). "This growth for the online collection still is rather slow and is not representative for the real use of music in the internet", Heker said. The total income for broadcasting rights (TV and radio) was € 262.0 million in 2011 (2010: €261.6 million).
Despite the closing of some local offices, which were responsible for collecting GEMA royalties at the scene, the local offices reported an increase for 2011 of €12.9 million (2010: €299.1 million).
Heker welcomed the fact that Spotify is now active in Germany. "Spotify clearly stated that they want to play the game in each country. Since quite some time we are negotiating with Spotify about an agreement. These negotiations have not come to a result yet. On March 26, 2012, we will have the last round of negotiations. Following that we will see whether we have found an agreement with Spotify. Presently, I am absolutely optimistic that we will come together," said Heker. He also outlined that the negotiations with Spotify like with other users were based on the presently valid streaming-tariff.
In the German music-industry there still is fierce criticism against GEMA. Edgar Berger, President & CEO of International Sony Music Entertainment, stated in the media that GEMA is still licensing copyrights very restrictively and that therefore the industry is losing millions of Euros. This is also the reason why the digital music-markets are not as strongly developed. In a statement to Billboard, GEMA rejects this criticism calling it false. GEMA stated that because of the law they were not allowed to license copyrights restrictively. Following the German laws, GEMA is obliged to grant licenses of the rights GEMA controls to all users, including YouTube. Even if there is a dispute between the parties about the reasonable remuneration, GEMA cannot prevent the use of their rights if YouTube, like a large number of other users, acts according to the laws and put the monies in dispute into escrow.
To Billboard's question whether the negotiations with YouTube could happen this year, GEMA stated that an ongoing law suit in Hamburg will clarify YouTube's general responsibility for the user-content. "Following this court ruling in April we assume that the negotiations will start moving", said Heker in Munich to Billboard.
GEMA confirmed the changes at the head of the supervisory board of GEMA. For personal reasons last week retired composer Jörg Evers, composer Prof. Dr. Enjot Schneider takes the helm as chairman of the supervisory board.
In Germany, GEMA represents the copyrights of more than 64,000 members (which include composers, lyricists, and music publishers) and over 2 million copyright owners worldwide. It is also is one of the world's largest societies for authors of music works.