Agreement Between BITKOM And GEMA On Online Music
90-second audio samples will be possible in download shops; Licensing of streaming products make new services possible
Following intensive negotiations, the high-tech association BITKOM and the copyright administration society GEMA have reached an agreement for online music providers. The contract regulates the amount of copyright royalties that have to be paid by the operators of Internet music portals. The licensing fees now will be, as a rule, between 6 and 9 cents (after tax) per music work; BITKOM member companies receive a discount. "The agreement creates planning reliability for the providers," announced BITKOM vice president Volker Smid. The chairman of GEMA's Board of Directors, Dr. Harald Heker, said, "Signing the agreement is very satisfying for GEMA members. Now the payments made in the past to escrow accounts can be billed according to the agreement we reached and distributed successively."
The results also provide advantages to the customers of online music providers. In the future, they can listen to longer segments of the songs on the Internet. "90-second samples will be possible in download shops in the future instead of the 30-second samples previously," said Smid. "This way the customer will receive a better impression of the songs before buying them." Dr. Heker emphasizes: "After many years of discussions, finally an amicable solution for an appropriate compensation for online music could be reached."
The new joint contract between BITKOM and GEMA, which becomes legally effective retroactively as of January 1, 2002, also includes the licensing of copyrights for streaming products, in other words, the direct transmission of music works over the Internet. "Individual services, which so far have been successful abroad, will now find similar licensing conditions in Germany, too. Therefore, we assume that in the future there will be even more music services in Germany where users can hear online every song in its entirety for a monthly flat fee," said BITKOM's vice president Smid. "This means online business models in the music branch will be much more attractive to providers and users than before."
As of this writing, music services financed solely by advertisements and music videos are not covered by this contract. BITKOM and GEMA will continue their negotiations in these specific areas. Negotiations are also ongoing for online video products.
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