German Rights Body GEMA Says Strong 2019 Created 'Crisis Airbag' for Members Sidelined by Pandemic

BERLIN — The German copyright collecting society GEMA carried over momentum from the previous year and increased revenues by nearly 5% in 2019.

In total, the rights body generated income amounting to €1.07 billion euros ($1.19 billion), up from €1.02 billion ($1.13 billion) in 2018. Of this amount, €905.6 million ($1.007 billion) was distributed to members and rights owners worldwide. This income was offset by total expenses of €163.7 million ($182 million), up from €159.7 million. The expense ratio was 15.3 percent (2018: 15.7 percent), which means it was below planned level.

"Against the background of current developments, GEMA's very good 2019 financial year will form a 'crisis airbag' for our members," said GEMA CEO Dr. Harald Heker in Berlin this week, referring to the COVID-19 pandemic that has buckled most aspects of the global music industry, namely concerts and physical commerce.

For many GEMA members, the royalty distribution on April 1 and the upcoming one on June 1 provide much-needed financial support.

As in 2018, the increase in total revenues is primarily attributable to the digital segment, where revenues rose by over 72 percent to €181.9 million ($202 million). New contracts concluded with digital service providers were a particularly positive factor. In contrast, income declined in the areas of duplication and remuneration claims.

"GEMA's tenacious commitment to fair remuneration for music authors on the internet is bearing fruit," said Dr. Heker. "Collection from internet and streaming services has now become a significant source of income for music authors. This makes it all the more important that the legislator in Germany now transposes the reform of copyright law adopted by the EU in 2019 into German law. More than ever, composers and lyricists need a reliable legal foundation so that they can participate fully in the digital value creation of their works."

Thanks to robust concert year in 2019, regional offices were able to increase revenues by 4.9% to €407.4 million ($453 million), up from €388.5 million. Meanwhile, income from music usage on television and radio fell slightly by 2.2% to €295.2 million ($328 million) from €301.8 million in the past fiscal year. “This was due to falling advertising revenues from private television stations,” Dr. Heker noted. “The market is moving away from downloads towards streaming, and this is shaping the earnings structure in the online sector.”

The subscription video on-demand segment enjoyed strong growth of 72.4%, largely due to new contracts, earning €181.9 million ($202.2 million), way up from €105.5 million.

Revenues from the duplication sector fell by almost 25% to €61.1 million ($68 million).

In Germany, GEMA represents the copyright of its currently 78,000 members (composers, lyricists and music publishers), as well as over two million rights owners from all over the world. It is one of the largest authors' societies for musical works in the world.