After nine months of negotiations, the Cologne-based online music service simfy has signed a licensing contract with CELAS. The contract allows simfy until the end of 2011 to offer its German, Austrian and Swiss users EMI Music Publishing’s Anglo-American repertoire.
Simfy, which is often compared to Spotify, is Germany’s largest music streaming platform. It was originally developed in 2006 by then-students Christoph Lange and Steffen Wicker to compare music download prices. Today, simfy.de users can access and listen more than 6.2 million streamed songs, compile playlists and hear live concerts. The site is financed through advertising and subscriptions.
CELAS, which will administer simfy’s digital rights under the new agreement, is a joint venture between performance rights societies GEMA and PRS for Music based out of the U.K.
Simfy’s users have a choice between two usage models: they can either subscribe to all catalog songs via streaming-on-demand or they can listen to the catalogue via online radio. Much like Spotify, the free option is financed by advertising while the subscription model is ad-free.
Spotify, which did not come to an agreement with GEMA, is not as well known in Germany as simfy, (Billboard reported in September 2010). simfy agreed to pay advances in escrow while negotiating licensing and Spotify was not willing to do so. According to GEMA there are no negotiations going on with Spotify.
Alexander Wolf, managing director of CELAS GmbH, said, “We are pleased about the successful agreement with simfy. The signing of the contract illustrates that it is possible after all to license streaming-based business models in such a way that the business interests of both sides are served – the business interests of the licensee as well as the business interests of the creative copyright holders represented by CELAS.”
Steffen Wicker, founder and managing director of simfy, said to Billboard: “We are happy about signing a contract with CELAS on the Anglo-American repertoire of EMI Publishing. We were particularly impressed with CELAS’ service-oriented approach during all of the discussions and contract negotiations.”
According to Wolf the new contracts will make obtaining music rights easier for other online music providers and at the same time ensure that artists across Europe will receive fair compensation for their work.