Finally: GEMA and BITKOM reach agreement for online music services

Good news for the German online music market: After years of negotiations GEMA and the industry association BITKOM have finally reached an agreement on online music services. As announced in a press release on Dec 8, the agreement covers the compensation for authors, that music services have to pay to the GEMA, and allows for flat licence fees for streaming services.

In a follow-up press release on Dec 21 the GEMA (apparently without having a definitive an agreement with BITKOM, heise) further announced a new set of tariffs that apply to ad-supported services.

For more information I recommend the articles on heise online (#1, #2) and netzwertig (#1, #2, #3).

The press releases are a bit fuzzy, and there’s been some confusion as to what exactly is being covered, but here’s the key elements:

Download shops (such as Musicload or Amazon) pay licence fees between 6 and 9 Euro-Cent per song. Also previews may now be up to 90s (previously only 30s were allowed)

Paid-for streaming services (such as Spotify or Simfy) are offered “licence agreements similar to agreements abroad” (says Volker Smid of BITKOM). According to heise online that’s a fixed fee of 60 – 100 Euro-cents per user and month.

Ad-supported music services (which according to heise online includes the ad-supported versions of Spotify and Simfy as well as music videos on Youtube) are to pay 10.25% of the revenue generated. In addition there’s a minimum payment between 0,025 Cent and 0,6 Cent per stream, depending on the activity level of the user (read the full details on heise online). The GEMA announcement was not coordinated with Bitkom, and the announced tariff has not been part of the agreement (heise).

The contract applies retroactively from the January 1, 2002, meaning that advances paid in escrow* can now be settled and successively distributed amongst the GEMA members.

* on a related note, that’s what Simfy did, and Spotify refused to do. More on this on Billboard.biz

 

BITKOM

BITKOM [Bundesverband Informationswirtschaft, Telekommunikation und neue Medien e.V., Federal Association for Information Technology, Telecommunications and New Media] “the voice of the information technology, telecommunications, and new media industry in Germany. BITKOM represents more than 1,600 companies, with 1,000 direct members, including practically all global players as well as 700 key midsize companies.” (bitkom.org) Members include Google Germany and Apple Germany (yet apparently not Spotify or Simfy).