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Germany Passes New Bill Governing Collective Management Societies

Germany’s lower house of parliament, the Bundestag, overwhelmingly passed a bill for a new Act on Collective Management Organisations (CMO Act) on Thursday, April 28. The new law replaces the…

Germany’s lower house of parliament, the Bundestag, overwhelmingly passed a bill for a new Act on Collective Management Organisations (CMO Act) on Thursday, April 28. The new law replaces the 50-year-old Copyright Administration Act.

German Federal Minister of Justice, Heiko Maas (Social Democratic Party, SPD):” The VGG will provide new opportunities for the German collective Society of music rights GEMA. This was proved by the new “HUB” for music rights that the GEMA has established with the English performing rights society PRS and the Swedish Stim as part of the community project International Copyright Enterprise (ICE). 

This is a further important step for the pan-European assertion of rights and for the work of the GEMA and all other performing rights societies. It implements the parameters laid down in the EU Directive “on the collective assertion of copyright and related protection rights and the allocation of multiple regional licences for rights to music works on the domestic market’ of 2014 into German law,” says Maas. In this context, licence and processing centres are to be established in the form of “one-stop shops” via providers like Spotify or Deezer that can acquire the rights at a specific location; GEMA has already begun to set up a licensing entity of this kind.

German Collection Society GEMA Sees Slight Uptick in Revenues

Maas said that the German Act had also served as a role model for European legislation. As an example, Maas said that in the future, not only would there be a supervisory authority for performing and collection societies in Germany but also in other EU countries. He called for an even stronger harmonisation of copyright law in Europe to make it an even more effective match for the digital age. 

On the committee for law and consumer protection, the members of the German Bundestag had already expressed their approval of the successful work of German music publishers in the interests of the authors and the performing arts societies. They requested the federal government to lodge an appeal without delay to the EU so as not to endanger the success of this proven collaboration. Only a few days prior to the meeting of the Bundestag had the German high court, the Federal Court of Justice (BGH) handed down a ruling against the performing rights society VG Wort that the latter was not entitled to disburse a lump sum of up to half of its revenue to publishing companies. The ruling had led to protests amongst music publishers and their authors. However, after the BGH ruling, many Bundestag delegates had made it clear that they did not accept the ruling and would now plan to ensure without delay at EU level that the successful collaboration between authors, publishers and the societies had to be continued.

In response, the President of the German Music Publishers’ Association (DMV), Prof. Dr. Rolf Budde said the following to Billboard in Berlin: “I’m absolutely pleased to see that in talks with representatives of the federal government and parliament, I managed to identify a high solidarity with our music publishing industry. For this reason, I assess the resolution adopted by the Bundestag to allow publishing houses to participate in the revenues of performing rights societies in connection with the VGG Act as a demonstration of trust for the principle of rights being asserted by music publishers and the work of the performing arts societies. The new VGG Act now gives us greater legal certainty in international collaboration operative ventures nd will support GEMA in the field of multinational cooperative ventures.”

GEMA’s CEO, Dr. Harald Heker, in a statement: “With the implementation of the EU Regulation on the VGG Act, we now have a pan-European standard  legal framework throughout Europe for cross-border licensing. Besides, many standards that already apply here in Germany will be final and binding on all EU countries in future. The Regulation creates legal certainty in all our cross-border activities in the online segment. Furthermore many standards that have applied in Germany for decades, shall be obligatory for all EU countries in future.”

The new VGG Act compels the societies to ensure increased transparency. Budde said: “We look forward to the GEMA member meeting of 2017 with great interest; at this meeting, GEMA members will be able either to vote online or appoint proxies to vote on their behalf. As an alternative to exercising their voting rights at the meeting, members will in future have the option in the lead-up to member meetings to vote using an Internet-based election and voting system (eVoting). Moreover, it will then be possible to follow the meeting via live streaming.”

At the GEMA General Assembly in Berlin a day before the debate, Heiko Maas had declared in plain words to the authors and publishers what he did not like about the music industry: “The poor negotiating situation of many creative artists is not reflected in the significance of their creations. After all, a lively culture scene is not only elementary if we want to continue to perceive ourselves as a nation of culture. It is also an economic factor: for instance, the attractiveness of a European metropolis in a ranking of cities today depends strongly on the music people can here in its clubs and concerts. By promoting festivals, granting scholarships and building new concert halls, many and various cities like Oslo, Mannheim, Liverpool and Luxembourg have already been competing for the title of Europe’s music city for some time now. Hamburg and its Reeperbahn Festival and the Elbphilharmonie concert hall are also out there right in front,” reports Maas. 

As an example of a strong performing society and the collective assertion of interests, Maas mentioned an artist from the U.S. He said that the hit “Happy” by Pharrell Williams had been streamed on the Internet 43 million times. The royalties he received in return from a major music publisher amounted to as little as $2,700 dollars. In the post-Napster era, evidently even a major hit that half the world danced to no longer was a guarantee for enormous revenues any longer. He said that this gave a rough idea of the immense challenge faced by the digital world. “The issue here is that those who create cultural assets should not always be the losers at the end of the day,” he said.