GEMA OVER! The Agreement between YouTube and GEMA

Millions of users of YouTube in Germany can breathe a sigh of relief. GEMA – the German state organization for collective management of copyrights of creators, the equivalent of Polish ZAIKS, and YouTube announced an agreement after seven years of dispute. Ending the dispute between GEMA and YouTube is good news both for  recipients of content on YouTube, as well as for artists. For users of YouTube the agreement means unlimited access to the content on YouTube and farewell to the hated message: “Unfortunately, this video is not available in Germany, because it may contain music for which GEMA has not granted the respective music rights (…)” In turn, this means opening a new (!) source of income for artists and a significant channel for promoting their own work, and that they will finally be able to reach out to their fans via YouTube.

What did the dispute concern?

The license agreement between Google and GEMA expired in 2009, and both parties, although they were interested in the continuation thereof, had not reached an agreement on the amount of fees (GEMA proposal: Google will pay 0.00375 euro (0,005 dollar) from each displayed video) of which YouTube is to transfer to GEMA. In addition, GEMA wanted to impose an obligation on Google to pre-moderate the content on YouTube, including the obligation to remove any infringing content. The result of the lack of consensus between the parties was the blockade of videos on YouTube for users logging in with a German IP. But what is  worse, the issue of the amount of royalties started a court battle between the parties. We wrote about the details of the dispute earlier in the ‘GEMA OVER?’ post on our blog. Another development in the dispute between Google and the German performance rights organization

This video is available in Germany

On November 1st, 2016, YouTube announced the agreement with GEMA indicating that: “It’s a great day for music in Germany. YouTube and GEMA entered into a breakthrough agreement, which means more music is available on YouTube in Germany. This is a victory for music artists around the world, enabling them to reach new fans (…)”* GEMA also issued its statement on the matter, stressing that the license agreement between GEMA and YouTube allows more than 70,000 authors, composers and music publishers represented by GEMA to receive the appropriate reward for the use of their musical works protected by copyright. **

Why so late?  

Unfortunately, none of the statements provides details regarding the terms of the agreement. The statements of the representatives of GEMA shows, however, that the contract between the parties assumes percentage (not flat-rate) participation in revenues from ads played before specific videos on YouTube. What’s more, for the period since 2009 the parties agreed on the type of setup fee, which is to be distributed among the artists according to the GEMA’s schedule.

Information on the end of a dispute between YouTube and GEMA should be regarded as surprising, as recent media reports concerned further litigation, rather than any negotiations between the parties. The seven year dispute between GEMA and YouTube was not only a nuisance to YouTube users, but it also meant huge losses for artists – financial and image related. As pointed by Edgar Berger, the CEO of Sony Music: “Blocked videos on YouTube cost us millions,” “There is no reason to take offense on the Internet.” The Internet is a blessing for us.”

Due to the lack of details regarding the agreement, it is difficult to assess whether its content is more beneficial for YouTube or for GEMA. Any analysis of the motivation of the parties can, however, say that the agreement was necessary to protect the interests of both parties. In the case of GEMA the last opportunity to appeal against unfavorable judgments was the German Federal Court of Justice. This solution hampered GEMA and the group of artists represented by it for the subsequent years of dispute, created additional costs and financial losses. YouTube also depended on the conclusion of an agreement due to the increasing competition from Spotify and Apple Music. In light of the above, however, we can say GAME (GEMA) OVER and wish YouTube users in Germany nice, unlimited use of digital music!

* Statement available at: https://youtube.googleblog.com/2016/11/ytmehrmusik-more-music-from-artists-you.html

** https://www.gema.de/aktuelles/gema_unterzeichnet_vertrag_mit_youtube_meilenstein_fuer_eine_faire_verguetung_der_musikurheber_im_d/