Hard times, especially for German mobile and online muisc start-ups. Accourding to the GEMA, the German authors’ society for music, the ringtone company Jamba did a great job at BITKOM, the German Association for Information Technology,
Telecommunications and New Media: The GEMA framework agreement for all BITKOM members is terminated. Now every company has to negotiate by itself for the specific music rights they need.
A ringtone company in the US has to enter into agreements with every single music publisher to use their songs. And that can lead to the necessity of a thousand agreements, depending on the ringtone-repertoir. Sure, if the company manages it to agree with the few big publishers – it’s easy to find a solution with the rest. But, no sweet without sweat!
In contrast, the ringtone industry in Germany was in a paradisiacal situation, until now:
The GEMA covers for nearly every musician and music publisher in Germany. So, there is only one single party on the one hand. In addition, BITKOM, as an aggregation of the online- and mobile companies in Germany, signed a framework agreement with GEMA, every BITKOM member can use.
But there is no paradise without an apple. The framework agreement pointed out, that some open questions about specific rates and clearing must be solved in the first half of 2007.
Yesterday, on July 2nd 2007 Harald Heker, head of GEMA, pointed out in a press release, that negotiations failed and that the GEMA is terminating the framework agreement with BITKOM on June 30th 2007.
According to GEMA, the apple in the paradise was the ringtone company Jamba, which now belongs to a joint-venture of the US companies VeriSign, Inc. (NASDAQ: VRSN) and News Corporation (NYSE: NWS, NWS.A; ASX: NWS, NWSLV).
Jamba, as an aggressive ringtone-subscription company, was not willing to disclose their subscription figures and agree to a suitable compromise – according to GEMA.
Now, every German provider of ringtones, ringbacktones, music-streams or music-downloads has to negotiate it’ s own contract with GEMA. That’s infuriating especially for startups in the field of mobile-music and online-music.
