This means that music-makers don't sign over ownership of their music upon joining GEMA, they sign over their usage rights—the right to legally manage and collect licensing fees for playback, reproduction and broadcast of their music. This is a convenient arrangement when you're a small-time musician who doesn't have the time or money to manage your catalogue; but these management decisions are taken out of your hands. If you want to grant a free license to a charity event or offer a reduced fee for a career-advancing event, you'll find that decision isn't yours to make.

For underground music venues that mainly feature non-mainstream and independent artists—like many dance music clubs—this means that a portion of the fees collected for these events will likely find their way into the bank accounts of mainstream artists and advertising jingle writers, whose music was never played during the event, while some artists will never see a single cent for their music, however popular it may be.

It classifies music into three categories: entertainment [Unterhaltungsmusik], serious music [Ernste Musik] and functional music [Funktionsmusik]. It then subjects these categories to different fee rates, membership requirements and weighting in the points system they use to calculate royalties. Unsurprisingly, U-Musik gets the worst of this arrangement, having the highest membership requirements, the highest fee rates and the lowest values for royalty calculations

Negotiations broke down sometime in late 2011, however, and an attempt to initiate legal arbitration failed as well. GEMA therefore decided to go ahead without the negotiations or arbitration and published a new tariff structure in the Bundesanzeiger (Federal Gazette) in April 2012, which effectively made the new tariffs legally-binding.

GEMA calibrated the new rate for dance clubs (Tarif M-V) with the goal of charging approximately 10% of the gross income for a music event. Of course, they don't trust organizers to self-report their revenues accurately, so they estimate the gross income based on venue size and price of entry, and then charge 10% of that.

This estimation is based on three assumptions: 1) the capacity of a venue is one person per square-meter, measured wall-to-wall (i.e. beyond the dance floor and ignoring solid objects like furniture); 2) the event is full to capacity; 3) everyone is paying full price for entry.

In answer to complaints about these distorted results, GEMA later introduced the Angemessenheitsregel (appropriateness rule), which allows promoters to apply for a partial refund if GEMA fees are well over 10% of actual gross income or if the venue's capacity is well under GEMA's one person / m2 ratio.

[I]n late November GEMA announced another tariff, VR-Ö, which became known as the "laptop surcharge." It applied to all music performances that use blank media such as CDs, tapes, USB sticks and hard-drives. This already existed in the past as an automatic 30% surcharge on the entirety of GEMA music licensing fees if any of the DJs used mp3s or burned CDs. Now, the surcharge would no longer be a percentage of the fees, but would instead be calculated at 0.13€ for every mp3 file on the DJ's computer. Every song over five minutes costs an extra 20% per minute. Performers and promoters all over Germany were not pleased, especially since the rate appears to charge all files on a DJ's performing device, regardless of how many songs they actually play.

GEMA went on to sue YouTube in a 2010 test case for distributing copyrighted material without permission — holding it responsible for copyrighted material uploaded by its users. Then in April last year a German court ruled that YouTube must install software filters to prevent users uploading content whose rights GEMA holds.

Die Welt reports that GEMA wants the German Patent and Trademark Office to arbitrate on whether its proposed rate of 0.375 cents per stream is appropriate — but YouTube is arguing for a lower rate.

A Hamburg court is already arbitrating another row between GEMA and YouTube over how the platform should be defined. GEMA claims that YouTube is a content provider whose business model is built on content that is subject to royalties. YouTube, on the other hand, says it is a hosting service which simply makes space available to its users.

GEMA is demanding that YouTube take down the on-screen notice blocking music videos in Germany that blames GEMA for the impasse. In November last year, GEMA head Harald Heker accused YouTube of deliberately misleading German users with the notice.

"The notice about GEMA is being posted wilfully, purely to stir opinion," he told WirtschaftsWoche magazine at the time. "YouTube is trying to awaken the false impression that the failure to license is GEMA's responsibility. That is simply wrong."

YouTube believes that rights holders and artists should benefit from their work. We have dozens of collection society deals in place across more than 45 countries because we provide an important source of income for musicians and a platform where new artists can be discovered and promoted. Music labels are generating hundreds of millions of dollars on YouTube every year. Artists, composers, authors, publishers, and record labels in Germany are missing this opportunity as a result of GEMA’s decisions. We remain committed to finding a solution with GEMA compatible with YouTube’s business model so that we can again provide a source of revenue for musicians and a vibrant platform for music lovers in Germany.

It now appears that GEMA are attempting to knuckle down even harder on club performances. So far this has only – to our knowledge – been reported on German language websites, but at the heart of these newly proposed set of changes is a tax (or “laptop surcharge”) on DJs playing music from laptops, to the tune of 30% for every music file under five minutes with an increase of 20% for each additional minute. What we’re unsure about is whether this only refers to files that are played, or all music on the offending laptop – we’d presume the former, but the post on Tanith implies the latter (“e.g. 10,000 mp3s on the DJ laptop would [require] 1,300 Euros”).

The proposal has reportedly been negotiated with the German Discotheques and Nightclubs unions (DDU and DDO). Dean Driscoll, of German-based promotions company Tailored Communication, explained on Twitter this morning that these unions are “sub-branches of GEMA populated solely by GEMA members.”

The petition, which began circulating in August, specifically protested the so-called "GEMA presumption," i.e. GEMA's method of deciding tariffs for clubs and festivals based on the assumption that they own rights to 100% of the music being played there. The reasoning behind this is that it would be too difficult to sort out which tracks were or weren't written by GEMA members. This method is part of what allows GEMA to decide their tariffs based purely on the amount of space in a venue and the duration of its events, without necessarily knowing what music was played.

The GEMA presumption has been contested before. One study by Berlin's Club Commission sampled everything that was played at Berlin clubs like Watergate and Weekend over one weekend, and found that as many as 35% of the records played were unknown to GEMA...

GEMA, the organisation responsible for collecting mechanical copyright fees on behalf of some 65,000 artists in Germany, have announced a price hike which could spell the end for some of Berlin's most revered clubs. If the changes go unchallenged, the legendary Berghain - facing a fee hike of 1,400% - will shut after its NYE party this year; the similarly monolithic Watergate is likely to go the same way, claiming its mechanical copyright fees will be increased from €10,000 per year to €200,000.

In the new scheme, commencing 1st January 2013, the complex existing system of eleven different fee structures is being replaced with just two: monthly charges will be calculated as a percentage of ticket price and relative to the size of the venue. There will, however, be a 50% surcharge if events last longer than five hours, and a similar increase after another three hours. Der Spiegel calculates that, "for an average Berlin club with 410 square meters of space, charging €8 entrance and running two events per week from 10 p.m. until 5. a.m, the price paid to GEMA will rise from the current €14,500 to some €95,000 - an increase of 560%". It seems evident that these plans favour venues (such as bars and gig spaces) with shorter opening times, placing a disproportionate financial burden on clubs. Legendary spots like the Berghain, renowned for the kind of marathon all-weekend sessions largely prohibited in the UK due to stricter licensing, will fare the worst.

"The way I see it, [clubs have] been paying far too little in the past. I see no problem for a club manager if he has to pay €1.20 out of €12".

The Berlin community isn't taking the change lying down: on 25th June, 5,000 gathered to protest outside GEMA's summer party; on the 30th, more than 2,000 clubs across the country stopped the music for five minutes to raise awareness of the new fees... High profile artists including Alec Empire, Blawan, The Black Dog, Mike Paradinas and Steffi have spoken out against GEMA's plans. The German patent office are apparently investigating the legality of the scheme, but they won't reach a decision before the fees come into effect - which may be too late for many of Berlin's clubs.

Even the European Commission has noticed that this is a problem, and has proposed bringing in a new directive to tackle it:

New digital technologies are opening up great opportunities for creators, consumers and businesses alike. Increased demand for online access to cultural content (e.g. music, films, books) does not recognise borders or national restrictions. Neither do the online services used to access them. This is where collecting societies come into play, in particular in the music sector, where they collectively manage the licensing of copyright-protected music tracks for online use on behalf of composers and lyricists and collect and redistribute to them corresponding royalties.

However, some collecting societies struggle to adapt to the requirements of the management of rights for online use of musical works, in particular in a cross-border context. As a result of today’s proposal, those collecting societies willing to engage in the multi-territorial licensing of their repertoire would therefore have to comply with European standards. This would make it easier for service providers to obtain the necessary licences for music to be distributed online across the EU and to ensure that revenue is correctly collected and fairly distributed to composers and lyricists.

Neelie Kroes, Vice-President of the European Commission, and certainly one of the most rational/radical members there, has written an extremely interesting blog post about the new proposals. She begins:

Last week’s vote on ACTA -- although hardly a surprise for those who’ve been following – was a reminder about the big debate currently going on, about how to balance intellectual property rights with Internet freedoms

For me it’s about making it easier for artists to promote their work widely, and make a living from it: without constraining the immense innovation of the online world. And, for me, the current copyright system achieves all of those objectives poorly.

That’s why I’m convinced we need to reform copyright for the digital age. For me, merely making enforcement more and more heavy-handed is not the solution -- especially if it results in draconian measures like cutting off internet access.

But a good start – and I hope a principle on which everybody could agree – is that we should make it easier to legally access the content you love.

Unfortunately, it seems that Gallo will also be the rapporteur on this new music licensing proposal. Assuming she gets her way, that pretty much guarantees that any directive that emerges from the long process of political wrangling won't do much to address the deep underlying problems with music licensing. It may even make them worse, judging by what happened with the hostage works directive under her guidance.

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No justification for such a huge jump was offered, but since one of the constituent members of ZPÜ is the German music collection society GEMA, which seems to have an unlimited sense of entitlement when it comes to demanding money from the public, that's hardly a surprise.

In particular, no rationale is given for including memory cards, which are used almost exclusively in cameras to record content produced by end-users -- so the idea that the levy is somehow justified as a way of compensating creators for revenue supposedly "lost" by piracy is manifestly absurd.

Basically, this outdated and insulting approach treats all Germans using digital storage as if they were pirates. Of course, arbitrarily imposing 2000% tax hikes on storage is probably the quickest way to turn them into something much more dangerous to GEMA and its friends: ardent supporters of the German Pirate Party....

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C3S is a collaborative effort to found a new and ground-breaking European collecting society for musical creators to register their works outside of traditional schemes, released under free licences for commercial exploitation. More than just for works published under Creative Commons Licences, C3S is open for other free licences as well.

“There is absolutely nothing to complain about. The Internet is a great stroke of luck for the music industry, or better: the Internet is a blessing for us,” Berger said.

“You can not blame the Internet for harmful excesses. On the contrary. It has brought us tremendous new opportunities,” he added.

But with these new opportunities come new rivals from an unexpected corner. According to the Sony boss, music rights collecting agencies are now preventing innovation in certain countries.

In Germany, for example, most YouTube videos by Sony artists are blocked due to the music rights group GEMA, and not because Sony wants it that way. When asked why Sony’s music is not available on YouTube in Germany, Berger responded bitterly.

“It’s not because of us. You must direct this question to the German collecting agency GEMA, they licensed the copyright very restrictively.”

I assume this is because last week I posted this video, complaining about why my 100% legal and painstakingly and expensively licensed movie was blocked in Germany:

Apparently many Germans are none too pleased with GEMA themselves, as indicated by interesting comments here. Some industry shills weighed in as well, but it looks like popular sentiment is against them. The story was shared widely, including in Der Spiegel and the New York Times online editions.

It's not clear how an American YouTube user is supposed to contest takedowns in Germany. When I was in Berlin recently, it was suggested I find a German lawyer to take some sort of action. At the very least, I would need someone in Germany to contest the takedown on my behalf. I imagine that would have been a slow and possibly expensive process. Then I thought of making this video. Although it took some work (writing a statement -- yes I know it's an imperfect statement, I did the best I could with the knowledge I had -- shooting the video, recording the audio via a separate mic, transferring files, editing, compressing, etc.), it was less work than managing an international legal process. And it got results fast! Better still, it contributed to ongoing debates about GEMA and Intellectual Pooperty in general.

My thanks to everyone who helped spread the word about this, and especially people in Germany who checked the Sita Sings the Blues URL and confirmed when the movie was blocked, and when it was unblocked.

"There are some good reasons to think that YouTube indeed has some duty to take care of detecting illegal uploads," Presiding Judge Heiner Steeneck said today. "GEMA has the opportunity to ask for such a ruling in regular proceedings."

Because of the large and comprehensive repertoire GEMA manages, at performances of national and international dance and entertainment music there is an actual assumption militating in favour of the existence of a liability fee.