More Financial Scandals Involving A Collecting Society: Remind Me Again Why They Are Credible Representatives Of Artists?

from the maybe,-just-maybe,-they-are-not dept

If you've been reading Techdirt for any time you'll know that copyright collecting societies have a pretty poor record when it comes to supporting the artists they are supposed to serve. Sometimes, that is just a question of incompetence, but often it veers over into something worse, as happened in Spain, Peru and India. TorrentFreak has some interesting news about an audit of the Greek collection society (AEPI). Initially, AEPI was reluctant to hand over the relevant documents to allow the audit to take place, but here's what has just emerged:

The final report, obtained by Greek publication TVXS, reveals a capital deficit of around 20 million euros, which according to the publication means AEPI cannot meet its obligations.

Despite that notable shortfall, key members of AEPI's management team have been getting paid rather handsomely:

AEPI's CEO alone received an annual salary of 625,565 euros in 2011, more than 52,000 euros per month. This figure has prompted outrage in local media.

Strangely, though, the actual artists that AEPI is meant to represent aren't doing quite so well:

According to the audit, AEPI’s IT system tasked with handling royalty payments was incapable of producing a report to compare royalties collected with royalties being paid out. But artists were certainly being short-changed on a grand scale.

"By Dec. 31st 2014, the undistributed royalties to members and rightsholders amounted to 42.5 million euros, and have still not been awarded to members," the Greek newspaper EfSyn notes.

A further post on the TorrentFreak site, this time concerning the former head of anti-piracy at the British Phonographic Industry (BPI), shows that there are problems with money in other parts of the copyright industry:

"BPI can confirm that a former employee, David Wood, was dismissed for gross misconduct in December 2015," a BPI spokesperson told TF.

"BPI has referred the matter to the Metropolitan Police who are investigating. As investigations are ongoing, it would not be appropriate to comment in any more detail at this stage.”

TorrentFreak sources indicate that very large sums of money are involved in the dispute, running well into six figures. Precise details have proven impossible to verify (the BPI declined to comment) but we understand the numbers involved are "significant".

Given that this kind of thing has been happening all around the world for years, you really have to wonder why these organizations are still allowed to put themselves forward as the legitimate representatives of the artists they serve so poorly.

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Filed Under: artists, collection society, copyright, corruption, pro, scandal
Companies: aepi, bpi

German Court Tells YouTube To Change 'Content Blocked' Notice After GEMA Complains About Its Hurt Feelings

from the oh,-so-you're-a-'crying-on-the-inside'-sort-of-thug dept

German YouTube users get to see a whole lot of the following rather than actual videos, thanks to the world's most aggressive PRO (performance rights organization).

GEMA, which has been engaged in litigation against YouTube for several years now in hopes of "negotiating" higher fees, has just secured a ridiculous decision in its favor from a German court that specifically targets the wording used in the "sorry 'bout that, Germans" message.

Time and again, users are informed that videos are blocked due to GEMA not granting the necessary music rights. As a result, GEMA has become very unpopular indeed.

Trying to remedy the situation, GEMA applied for an injunction to force YouTube to change the messages, claiming that they misrepresent the situation and damage GEMA’s reputation. YouTube alone is responsible for blocking the videos, claiming otherwise is simply false, GEMA argued.

Yesterday the District Court of Munich agreed with the music group and issued an injunction to force YouTube to comply, stating that the notices “denigrate” GEMA with a “totally distorted representation of the legal dispute between the parties.” Changing the message to state that videos are not available due to a lack of a licensing agreement between YouTube and GEMA would be more appropriate, the Court said.

Poor sweet, sensitive GEMA. It can't handle German users being told that the PRO has yet to grant the rights. Instead, it wants to make it look as though it's entirely YouTube's fault. It wants to pretend it hasn't spent a majority of the last half-decade battling and suing YouTube, the end result of which has been massive amounts of videos being blocked in Germany.

GEMA's complaint is every bit as ridiculous as that of an artist in a story we covered back in 2012, who claimed that YouTube's "content removed" notices somehow made the artists looks like the "bad guys" by listing the party responsible for the takedown in the message. In that case, this artist was upset that YouTube was doing exactly what he asked it to do: take down infringing content and notify the infringer that the content had been removed.

The same thing applies here. GEMA hasn't granted the rights to use this content, therefore it's blocked in Germany. But that heaps too much of the blame on GEMA's tiny shoulders, a burden GEMA (and now a German court) feels should be transferred to YouTube. This despite the fact that GEMA could have an agreement with YouTube, but because it's asking for $0.17 a stream (as compared to say, PRS, which receives $0.0034 per view), there's very little chance of it ever obtaining one. In the meantime, Germans will continue to see quizzically apologetic faces and court-ordered wording instead of videos. This ultimately has nothing to do with GEMA's faux concern for its stable of artists (don't forget: GEMA is opt-out, not opt-in, like other PROs) and everything to do with its public image.

GEMA's reputation isn't something it can salvage at this point and no amount of wording is going to change the fact that it's its own worst enemy, and pretty much the worst thing that has happened to 95% of its roster (the top 5% or so will continue to rake in cash -- as with every collection agency anywhere). That a PRO with this much power has the audacity to complain to the courts about its self-inflicted wounds shows it still holds very tightly to its outsized sense of entitlement. That a German court would oblige is unfortunate, but not really all that surprising.

No matter what the final wording reads, German artists and fans won't forget who's the real problem here.

Filed Under: gema, germany, licensing, pro
Companies: youtube

Performance Rights Organizations Accused Of 'Retitling' Songs To Collect Royalties Without Paying Artists

from the sad-state-of-affairs dept

In various discussions about the music industry, we're often told that the so-called Performance Rights Organizations (PROs) are "looking out for artists' interests." In practice, that's not always the case. In the US, for example, we've talked about how PROs have harmed up and coming musicians by jacking up prices so high that many venues that used to be the starting place for new musicians no longer allow any music. Similarly, there are plenty of stories showing how they often collect money that should go to smaller artists, but deliver it to big name artists instead, because it's too difficult to track how much they should be paying smaller artists.

A press release from an organization called Music Licensing Directory -- which may be biased, so take this with a grain of salt -- is highlighting that 40% of the PROs it tracks engage in "retitling" tracks for the purpose of licensing. Basically, the accusation is that the PROs change the title, so that they still collect the royalties, but since the songs can't be easily connected back to the original artist, that artist doesn't get paid.

“We have analyzed over 1500 music licensing companies globally, allowing for an accurate assessment of the market place and providing valued insight for artists and the industry.” said Winston Giles, CEO & Founder of The Music Licensing Directory.

The new report highlights that whilst the Music Licensing Industry continues to grow as a multi-billion dollar segment of the global music industry, there remains some unhealthy practices, most notably the prolific practice of retitling. Retitling is where a music licensing company re-registers a song under a different title with a performing rights organization (PRO), allowing for the royalties to be separately tracked when that song is licensed for a specific third party use. This allows the music licensing company to control and earn a significant share of the royalties collected.

Filed Under: licensing, pro

GEMA Vs. YouTube Hits The Three Year Mark As Rate Negotiations Fall Through Again

from the quite-possibly,-GEMA-hates-musicians,-Germans-and-anything-Google-related dept

It looks like the long-running dispute between GEMA, Germany's brutish performance rights organization, and YouTube isn't ending anytime soon. This licensing battle goes back to 2009, when Google's contract with GEMA ended and the German PRO asked for $0.17 per view, a rate Google claimed was "without comparison in the history of online music." (By comparison. YouTube was paying PRS, the UK performance rights group, $0.0034 per view in 2009.) GEMA countered that it had offered to take $0.01 per stream, but wanted YouTube to cough up more usage data in exchange for the cut rate.

Once this initial negotiation broke down, things went from frosty to litigious.

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.

After a couple of lawsuits, GEMA returned to the "negotiating" table, this time with an offer a bit more in line with reality.

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.

This doesn't really resemble a negotiation at this point. GEMA offers, Google counteroffers and all of a sudden, the home team's PTO is going to decide whether GEMA's preferred rate is "appropriate." But that's not all: GEMA is also suing YouTube to the tune (pun really not intended) of €1.6 million for the alleged unlicensed use of 1,000 songs from its catalog.

Not only that, but another German court is in the process of defining YouTube's role on the web, something that could potentially see YouTube remove itself entirely from Germany.

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.

The push here is to remove any sort of "safe harbor" (such as it exists in German law) and hold YouTube entirely responsible for anything uploaded by its users. Framing YouTube as a content provider puts it right in the legal crosshairs, which is where GEMA wants it. Despite the efforts made by YouTube to curtail infringement, GEMA still wants to see it pay more.

Of course, GEMA's doing this "for the artists." And those artists must be thrilled, what with the world's most popular video streaming site serving up this message, rather than actual videos, all too frequently.


And wouldn't you know it, GEMA also has a problem with the message posted by YouTube, which has become visual shorthand for the German YouTube Experience.

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."

This sounds familiar. Those blocking or taking down videos for various violations seem to think that YouTube should keep them free from criticism, too. Considering YouTube has already negotiated licenses with various other PROs, including ASCAP and the infamous PRS, it certainly seems likely that GEMA's contentious relationship with, well, just about everyone, might have something to do with the "failure to license." GEMA can complain about the "impression" this message makes, but if it were solely up to Google, German citizens wouldn't be seeing this message at all. Here's Google's statement:

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.

That's the crux of the situation. The artists, composers, etc. aren't just missing these opportunities -- they're not even being allowed to have these opportunities, thanks to GEMA's insistence on combative, hardline tactics. GEMA hasn't done much for the artists it "represents," but it's doing a great job turning Germany into a cultural island.

Filed Under: germany, licensing, pro
Companies: gema, youtube