GEMA Hikes Venue Performance Royalties 500%, Threatens Germany's Underground Club Scene

from the 'creative'-destruction dept

GEMA is killing the music industry. Despite needing artists to survive, GEMA seems particularly hellbent on destroying any venue these artists might use to make money in its quest to secure even more money. It takes a certain level of diabolical shortsightedness and greed to “elevate” yourself above the rest of the PROs into “Most Hated” status. Considering other PROs have done such endearing things as shakedown the Girl Scouts and non-profit charities for spare change, GEMA has its work cut out for it.

Maybe it’s the famous German industriousness that has provided GEMA with the impetus to turn Youtube into a massive collection of “Sorry, this content is not available in your country” messages. Maybe it’s some form of corporate sociopathy that has turned it into a self-destructive monster capable of destroying artists’ futures in the name of artists’ “rights.”

The latest move by GEMA has sparked protests, a claim that most other PROs can’t make. GEMA, in its infinite wisdom greed has decided that the underground music scene just isn’t paying its fair share. The fix? Raise rates 1,400% and if a few clubs go under because of the hike, well, that’s just part of the price of doing business.

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.

As is par for the course in instances like these, it’s all about “fairness” and “putting money in the pockets of artists.” But like every other PRO, GEMA exists to collect fees and redistribute them to the artists, starting at the top. Those most heavily represented by chart success, airplay and radio exposure get the largest chunk, with little to nothing reaching those artists operating outside the mainstream (like, say, THE UNDERGROUND), many of whom may not even be registered with GEMA.

Ostensibly, GEMA is attempting to streamline its fee structure, but doing so in such a way that the most direct beneficiary is GEMA itself. On top of that, an additional levy targets underground clubs, and their lengthy events, nearly exclusively:

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.

GEMA has it all figured out, though. You can nearly hear the condescending smirk wrapped around this statement by Regional Manager Lorenz Schmid.

“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”.

Of course you think it’s manageable. You’re the one collecting the fees. When you’re on that end, it all seems like a drop in the bucket. Those on the other side see it differently. It’s another unexpected cost to factor in, and when you’re running a club that caters to the underground, you don’t really enjoy the sort of profit margins that more mainstream events and entities do. GEMA is killing off some of the few outlets for underground artists in order to further reward the top of the heap. Makes sense. Fortunately, the underground scene isn’t taking this lying down.

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.

There is also an online petition, which you can sign here. Given the historical importance of Germany’s underground club scene, as well as its contribution to Germany’s tourist industry (more than 35% of visitors cite the city’s nightlife as a major reason for their visit, according to the Guardian), it would be incredibly disappointing to see it killed off by a rent-seeking agency looking to further reward the top 5% of artists. Maybe this backlash will highlight the stupidity of destroying outlets for artists in the name of “protecting” artists.


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Comments on “GEMA Hikes Venue Performance Royalties 500%, Threatens Germany's Underground Club Scene”

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Anonymous Coward says:

Re: Re: Re:

Go look up a basic supply and demand price curve and come back. Seriously, this is Economics 101: smaller prices equals more people buying, which can increase revenues despite a smaller per unit cost. Further reading can include how Valve keeps making money hand over fist despite (actually because of) putting games on sale, sometimes for a fifth or even a tenth of what most other publishers charge for their games.

Anonymous Coward says:

Re: Re: Re: Re:

Basic economics break down as soon as piracy-policy enters the competition: When you can gain more money suing people by keeping an extortion price, it is a good business-model, no matter if you ever get any customers through non-court cases or not!
Public relations are for wankers. True business is only effective it can be used for extortion, bribery and control.

Anonymous Coward says:

And cue the local band, Paywall Bob and the Techdirt Trolls, who are here to educate us on how the Berlin protest and petition will achieve absolutely nothing, because we’re all filthy pirates who underappreciate the poor, victimised collecting agencies (including the one that failed to pay for the song used in their propaganda).

Of course, we know that if the petition achieves absolutely nothing it’ll be for different reasons than they imagine.

Zakida Paul says:

Dear Music Collection Agencies

How are things like this good for music? How are things like this good for musicians?

Oh, that’s right, you are not interested in music or musicians. You are only interested in your own profits and controlling what we listen to, and how/when/where we listen to it.

Up yours.

The eejit (profile) says:

Re: Re: Dear Music Collection Agencies

However, basic economics dictates that the value you put on something may not be the value that the rest of the people will put on it. See, for example, Steam’s Summer Sale Which has proven that lower price points often leads to a massive increase in sales (provided that you also have a positive community reputation).

PaulT (profile) says:

Re: Re: Dear Music Collection Agencies

I love the fact that you’re still incapable of understanding that it’s possible be both a paying customer and have a negative opinion of the industry’s methods at the same time. Ever wonder why your opinions tend to be shot down here? They’re based on false assumptions and always involve personal attacks.

Ninja (profile) says:

Re: Re: Re: Dear Music Collection Agencies

Well, to his credit, I was first a good, paying customer but now I buy nothing that gives money to the MAFIAA (the only thing I can’t avoid are the cinemas but I’ve reduced that to a minimum). Except that he thinks I want all for free which is not the case I’m more than willing to shell $50-$100 a month to have services that deliver the content I want whenever I want.

That Anonymous Coward (profile) says:

Re: Re: Dear Music Collection Agencies

of course we have to download the music, GEMA isn’t paying any of the cash they extort to the smaller bands so the only way to to hear them is to access the torrents of their work they put online so people can hear them.
Those people then goto the clubs where they are played or are having a show, then GEMA demands a huge fee “for the artists” and cuts into what the band might have made at their show and sends that money to groups who had nothing to do with that show…

Bad idea one – assuming everyone who dislikes the cartels is a dirty dirty pirate.

Anonymous Coward says:

Re: Re: Dear Music Collection Agencies

Hurricane pants! Howzabeen, mate? Why the long absence – did you have to get Daddy Lowery to wipe your ass after you shat your pants finding out that your precious collection societies failed to pay the artist that helped them compose their propoganda? I’d say Lowery missed a spot, though – the spot that makes up your head!

Josh in CharlotteNC (profile) says:

Re: Re: Dear Music Collection Agencies

but yet, you will still illegally download the music, proving to them you want it, but you don’t want to pay for it

True story: the only music I’ve pirated in the last 6 months is music that is not available via Grooveshark.

Also true story: I pay a monthy subscription of $9 to Grooveshark. This is more than I spent buying CDs in my teenage years before I became a heavy pirate in my early 20s.

the more you download and pirate, the more you prove them right

The more the legacy players try to close off legal services and venues, or keep their music off them, the less money they get.

So, coming from a completely unapologetic self-identifying pirate, this should mean something: I’m perfectly willing to pay money for useful services that are reasonably priced and convenient to me. I’m happy to give money when I know that it will benefit the artists that I care about. But I do not care about your out-dated business models that revel in wastage and inefficiencies to siphon off nearly everything that I pay to end up in the pockets of people who do nothing to benefit the artists I care about, or society as a whole. I will route around those inefficienies every chance I get. So if you want my money, stop being a barrier and start being an enabler.

relghuar says:

You've missed the point ;-)

Your last sentence is completely wrong!
It actually makes perfect sense, if you just put a couple words in (you surely must have omitted them by mistake).
It should really state:
‘Destroying outlets for SOME artists in the name of “protecting” OTHER artists.’
– feel free to put your own definition of SOME (like those that don’t bring any money to GEMA, record labels, well actually anyone that matters) and OTHER (those they can best profit from)

That Anonymous Coward (profile) says:

Re: Re:

Really? This is your answer?
That GEMA who enjoys the legally granted position of we say it must be covered so it is, you have to do the effort to prove us wrong… and even if you do we can still screw you.

GEMA who blocked ‘Sita Sings the Blues’ (HI NINA!) and kept doing so even after Nina provided them with the paperwork showing she had worldwide license to the material?

And the shakedown and “fee collection” game was exported to the UK then the US and is moving to Canada because the courts here are starting to figure out that 4 German Companies operating under 15 names might be lying about their tech… the tech that was thrown out of German courts and go them sued by a partner lawfirm because they hid the flaws to protect their revenue stream.

They obey the laws… maybe the problem was letting them influence how the law was written to benefit only them.

Anonymous Coward says:

so, what would happen if all those that are paying fees at the moment, regardless of whether they agree with the amounts or not or where those fees are going, simply turned round at refused to pay? if there was any sort of legal action against any club(s), let the protests increase to the proportions where government had to intervene. if nothing else happened, it would certainly raise awareness of what was happening and how the ‘on behalf of artists’ was nothing other than complete crap!

Call me Al says:

A new collection society

Is there any scope for the clubs to create their own collections society? Perhaps they can sign on those underground artists not represented by GEMA and specify that the music played is entirely non-GEMA and that they therefore refuse to pay GEMA any money.

Maybe I’m just being naive and hopeful.

Ninja (profile) says:

Re: A new collection society

I’m not quite sure but weren’t there stories of GEMA claiming they own.. I mean, represent even those not signed with the agency and collecting for those too (as long as the artist is German GEMA owns.. I mean, “represents” him;her automagically).

This collection agency is actually the state of art example of greed, corruption and sense of entitlement.

Stephan (profile) says:

Re: A new collection society

Yes, they cold do that. But there is one *big* problem. As it is now, there some kind of “guilty until proven innocent” state regarding GEMA. In other words: The GEMA can contact each and everyone who plays music publicly and demands money until it is proven that the artist(s) played at an event are not GEMA-members. In other words: The clubs have to give prove that each and every song they play isn’t one for the GEMA has rights to collect money for. If the clubs can’t do that, they’re screwed.

Ninja (profile) says:

I clicked the link to sign the petition and my eyes started to bleed. I definitely have issues with German as an idiom. In any case, is there an English version for the tourists and supporters outside Germany?

In any case, GEMA (BREIN, FACT, the MAFIAA) are the main reasons I pirate. I will gladly donate to the artist directly or go to the shows but I refuse to give my money to such rotten pieces of garbage.

I say let GEMA destroy everything. Maybe once copyright is escalated enough to the point that everything is infringing and the creative process is brought to a halt then our wise and honest politicians will actually do something to fix (like scraping everything and starting from zero).

Zilberfrid (profile) says:

Some thoughts

Since these fees for smaller venues will amount to as much a cost as rent, what would you say if your rent went up 500 to 1400%?

I don’t have that much rent, just shy of $500 a month, if I’d have to pay $2500 in half a year, I’d be looking for soft spots under the bridge as it’s more then I make even before taxes. If I’d have to pay $7000, I’d be stocking up on gasoline to make sure the one destroying me won’t have a house for himself as well.

Then there is this: The music played in the underground bars is not from the artist you’ll be paying most.

So back to the rent: I will have to pay enough to break my back, it will not be used to actually pay someone who services my house, or owns the ground it is on, or even is in the same area, these will still be poor.
It will be paid to someone who already has enough, and of course to some shady baseball bat bearing types who drive around looking for a toe stepped out of line.

bob (profile) says:

Underground clubs-- isn't that just another way to say "tax cheat"?

It’s not enough for the kids to pirate music and stick it to the content industry. They have to free ride on the police department, the fire department, the military, the people who build roads, the hospital system… and many others.

These underground clubs should move to Somalia where there is no government. They can pirate everything to their heart’s content and they won’t have to cut any moral corners. Oh wait. They don’t want to do that because they want all of the security they get from the government they won’t pay to support.

abc gum says:

Re: Underground clubs-- isn't that just another way to say "tax cheat"?

Just because something is called underground you assume it is illegal? Might you have any facts to support this or is it simply more Bob the Bullshitter vitriol?

Is it easier for you to get comfy with an abusive system if the victims have been accused of skirting their tax liabilities?

maclypse (profile) says:

Re: Underground clubs-- isn't that just another way to say "tax cheat"?

I think you are confusing “underground” with “illegal”. If they weren’t paying for fire department, rent and taxes they probably wouldn’t give a fuck about GEMA either. Underground in this case simply means alternative, non-mainstream clubs. It doesn’t mean illegal. Durh.

Anonymous Coward With A Unique Writing Style says:

Re: Underground clubs-- isn't that just another way to say "tax cheat"?

First off bob, “underground” does not mean the music is illegal or that the clubs where said music is being played aren’t paying taxes. Underground means not mainstream/popular.

Secondly, and perhaps you can explain this stupidity, how does paying higher fees to GEMA translate to not paying to support the government?

Seriously, do you even think before you post? Please answer that one thing.

Also, you are aware kids in general don’t pay taxes right. That’s not just a German thing. That’s happening here in America too. At least until they get their first job at about 17 or so. I mean think about that. There’s nothing but “pirates” freeloading on roads and education in schools and hospitals and whatnot that I’m paying for! SOMEBODY PUT A STOP TO THIS IMMEDIATELY! /s

[shakes head in absolute befuddlement at the thinking process, or lack thereof, that bob shows in his comments]

Anonymous Coward says:

Re: Re: Underground clubs-- isn't that just another way to say "tax cheat"?

Underground does not means not mainstream/popular.

Underground means below ground level; the basement where rents are cheaper and the bear is cheaper, and the heat is higher because that is where the boiler was/is.

Translating this to regular English it means affordable like affordable housing.

Anonymous Coward With A Unique Writing Style says:

Re: Re: Re: Underground clubs-- isn't that just another way to say "tax cheat"?

Ah yes, very true. But “underground” as it is being used in the article and regarding “underground music” means what I said it does. I guess I should’ve been a bit more specific, but I figured given that this article is about music that would be readily understood.

And by readily understood I mean by most people, bob being the exception.

I do have one question though. These underground places you speak of, where can I find one? Because I’d like to live somewhere where “the bear is cheaper”. Lol.

Anonymous Coward says:

Re: Underground clubs-- isn't that just another way to say "tax cheat"?

Ladies and gentlemen, I present to you for your mockery and entertainment – Paywall Bob and the Techidrt Trolls!

Seriously, for someone who claims to be an independent producer all you do here is bitch, bitch and bitch over how people are trying to get less big-name artists paid. But then we all know how you’re an independent producer who has a vested interest in supporting John Steele and Evan Stone, and you have a burning hatred for libraries.

PaulT (profile) says:

Re: Re: Underground clubs-- isn't that just another way to say "tax cheat"?

There’s complete logic, or at least there would be if he was using the real definition of the words he’s using to launch his attacks. Sadly, he’s completely misunderstood those words, and using a totally different definition that has no relationship to what is meant by them, so he just comes off as being ridiculous. Even more so than usual, which is something of a feat, I suppose.

Anonymous Coward says:

Re: Underground clubs-- isn't that just another way to say "tax cheat"?

It’s not enough for the publishers to extort artists into signing up with them for ridiculously low fees (if paid at all), they have to free ride on the laws they forced the public as well, and then extort said public with them, taking away the few ways yet-unknown artists have to gain popularity.

These ‘rights’ clubs should move to Somalia where there is no government. There they can threaten people to their hearts content and they won’t have to cut any moral corners. Oh wait. They don’t want to do that because somebody might actually stand up to them there.

Ninja (profile) says:

Re: Underground clubs-- isn't that just another way to say "tax cheat"?

Oh bob! We missed you! And you made a comeback as clueless as ever.

I hope GEMA makes up for the closed down clubs concerning tax collection. I’m fairly sure the MAFIAA generates pretty much all the tax revenue Governments around the world use to provide their citizens what they need.

Anonymous Coward says:

Re: But...but...we are already paying

“It can’t be to pay the artists…’cos they are already getting paid.”

Not exactly correct. The door pays in part for the musicians who are performing that night. The GEMA fees pay the writers of the songs, which are being performed for profit.

Sometimes they are the same, often they are not.

Ninja (profile) says:

Re: Re: But...but...we are already paying

I can see your point. But I disagree with this. If anything, the band playing other artist successes should be charged, minimally, with a blanket license that would then go to the songwriters involved (ie: the band should list their usual repertoire to the collection agency and the agency would redirect the earnings to the songwriters proportionally). The club itself could pay for a blanket license to play music from other artists (much like a restaurant or something). Again they’d provide a digital copy of the playlist and the amount paid would be split among the artists (and these would give their part to the songwriter if they want since the club would be paying for the performance of the artist).

Sure not a perfect model but it could work. The fees should be reasonable and vary according to the revenue of each place.

Anonymous Coward says:

Re: Re: Re: But...but...we are already paying

Another option is to just close down altogether or go silent rather than bother with pain in the ass licensing. Who wants to bother with more paper work. User fees what ever they are for tend to go up year after year till they become unaffordable for most people. That is my personal experience.

Anonymous Coward says:

I have a vision. Of a back alley. Silence but for the faint background of cars and people. Sly looking Bruisers on the door. Furtive tourists and locals scoping to make sure there aren’t any police or other law enforcers around.
One of them sidles up to the Bruisers… and in a quiet voice “Hey man… I heard that you guys… you know… do … music? can I come in and listen a while???”

Clearly GEMA are doing this for the children. See how my strawman turns music fans into drug addicts. For The Children!!!

Anonymous Coward says:

Re: Simple solution

No record-company wants to recieve 1$ since it will cost them more to process the transaction. The problem with micro-transactions are the expense of billing for tax purposes/contract obligations/budgets taking more than the micro-transaction will give.
The arguments against it has to do with the ease of transfer, but in a modern bureaucratic company, the paperwork has to be done to stay in business and that is what is killing the future. Hell for the future is paved with inflexible tax-systems.

anon says:


Let them do this and more, let them ask radio stations for a 500% increase and all intent outlets to increase prices and all functions to increase there payments by 500%.

The sooner they raise the prices so that nobody can access there music the better. At least then they will go out of business faster than is happening now.

Greed is a wonderful thing for those not consumed by it, as those consumed by greed normally destroy themselves look at any thief and when they get caught, they get caught because the more they steal and the more money they get the more chance they have of being caught.

Lets get copyright sorted , the sooner the better for the artists and consumers.

Anonymous Coward says:

GEMA better watch or they will suffer the same fate as ASCAP. Go to the malls in America, they are silent except at Christmas. No music, no more. No more Karaoke nights at the bars because of the ASCAP Police or should we say Gestapo. So the rule is now, no entertainment except Original Music. Good for the Indies. Screws the Majors.

Rich Rayne says:

Sorry ...

… you are going completely wrong. As if being payed by Google. Please answer one question: Why does Google send users into a one-way-street when not having been willing to spend some very little money to gain the right to play that video?
They never to do in no other case.
But here. They don’t offer – like normal – on the right side videos to go on with.

They want to frustrate people.
That’s misusing customers for own aggressive profit making.

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