27 May 2013

GEMA: Financial performance in 2012

GEMA finished the 2012 business year with a satisfactory result. The sum of the returns for copyright holders from all over the world was €820.2 million. Although this represents a decrease of about 0.6 percent, or €5.3 million, compared to the previous year, income overall has remained at a high level.

The cost unit rate increased slightly to 15.6 percent, compared to 14.9 percent in the previous year. The share of mandates for collection on total income amounted to €175.0 million. Both positive and negative developments could be seen in GEMA’s different sources of income. At a glance, GEMA’s most important sources of collection income

Recordings

For several years now, we have been witnessing a move away from traditional recording media toward music use on the Internet. That trend remained in place in 2012, with income from the recordings business continuing its sharp decline. In the past business year, revenue from this source totalled around €117.0 million, a decrease of €9.6 million compared to the previous year (2011: €126.6 million, 2010: €161.5 million, 2009: €164.5 million, 2008: €171.6 million).

Online

GEMA saw income from its online business fall in 2012. When compared to last year, the sum of the returns dropped €4.3 million to a total of €16.9 million. One reason for this is the concluded arbitration process with BITKOM on music-on-demand tariffs, which resulted in GEMA having to reimburse more licensing income than had been set aside for this purpose. Furthermore, music authors share of the economic results in this area still remains at a very low level and is by no means proportionate to the actual amount of music used on the Internet (2011: €21.2 million, 2010: €13.3 million, 2009: €10.6 million, 2008: €7.3 million).

Radio and Television

Collection proceeds from radio and television remained stable due to a slight improvement in the advertising market of private broadcasters and higher income in the cable retransmission area. The sum of the returns income amounted to €260.8 million, an increase of €3.4 million compared to the previous year (2011: €257.4 million, 2010: €257.1 million, 2009: €283.0 million, 2008: €237.5 million).

Policies

Artificial intelligence

Artificial intelligence brings about many new opportunities for our lives, including in the field of culture and creativity, but its applications also raise a number of ethical and legal questions due to their wide-spread uncontrolled and unchecked usage.

Policies

Music Streaming

Music streaming has unquestionably become the predominant means of enjoying music, replacing traditional physical media and expanded far beyond the live sector by providing user-friendly, high quality, and affordable access to the largest possible repertoire anytime, anywhere, online, or offline.

Songs and compositions are at the heart of this thriving market, which counts 524 million users on subscription-based music services globally, reaches more than 2 billion users including the streaming on UGC platforms, and offers more than 70 million tracks from approximately 8 million artists.

Yet, the authors and composers cannot benefit adequately from this success, and the debate over unfairness of this market is gaining traction across Europe and around the world.

There is a need to look more closely at how songwriters and composers are connected to this thriving economy and what can be done to improve their currently neglected situation.

Read below to find out more about the Music Streaming market.

Policies

Buy-out contracts: a dangerous threat to European creators

European music creators (composers, lyricists etc.) are being forced to forsake thousands of euros in future earnings by draconian ‘work made for hire’ (WMH) and buy-out contracts.

Online audiovisual services and broadcasters that are mainly US-based are forcing music creators to accept such contracts, which enforce a one-time payment in exchange for their rights.

Given the worldwide popularity of shows and series on platforms like Netflix, Amazon, Disney etc., and their replay value, the audiovisual market represents an important revenue stream for creators. Soundtracks alone are part and parcel of series and often attract a similar amount of popularity, massively boosting sales, streams and the worldwide fanbase of their authors.

Read below to find out how video on demand (VOD) platforms and broadcasters are circumventing EU law and what can be done about it.

Policies

Authors’ societies & the collective management model

Authors’ societies are hugely beneficial to both authors (creators), users (platforms and services), and the broader public.

Beyond benefiting these different groups, authors’ societies also support the broader cultural ecosystem by funding and promoting cultural and creative initiatives.

Below are five key benefits to authors’ societies and the collective management model.

Policies

The Copyright Directive

In April 2019, the Directive on Copyright in the Digital Single Market was formally adopted, a change that will positively transform authors’ rights throughout the EU. Each member state now has until 7 June 2021 to transpose the Directive into their respective national law.

This reform is an opportunity to address pressing issues for authors in the Digital Single Market and will promote the growth of Europe’s creative and cultural industries (CCIs) – a major driver of Europe’s economy.

One of the biggest achievements of this new piece of legislation was to address the
‘Transfer of Value’ problem, a priority issue for all European creators.

Below are some of the Directive’s key areas that will affect creators and those who profit from their work.