Why now is the right time to actively campaign for a fair copyright law.

Music is more than just the most beautiful thing in the world; it is the sixth largest industry in Germany. This means that you can earn a lot of money with music. But are you getting all of it? Copyright law and its monetisation are an important aspect when it comes to this question. It enables you to claim streaming payouts from Deezer and Spotify etc. and payments made through performance rights societies, for example, GEMA if you are played on the radio.

But what exactly is the situation on the digital license market? In the past, money from “user generated content” (UGC) was paid directly by your distributor or label (with a delay of two or three months) to you – but that could soon change. In this article find out why that is the case, who then gets your money and what you can do to counter this.

How it all began:

In April 2019, the EU adopted a law that prompted individual countries, including Germany, to get the ball rolling on a tailored copyright law that protects the copyright holder. So far so good! With the so-called DSM Directive “Digital Single Market”, the EU wanted to make all upload platforms liable for the content they share. Copyright owners spoke of the end of the “value gap”. A never-ending story – poor remuneration, in particular for advertising financed offers, with user-generated content for musicians!

Unfortunately, Germany is currently the only country that wants to go its own way. In the re-worked copyright law (Urheber-Diensteanbieter-Gesetz, or “UrhDaG”), “Draft law for adapting copyright to the requirements of the domestic digital market” that was introduced into the Bundestag in February 2021, remuneration claims from upload platforms like YouTube, TikTok and others should no longer be billed as before by musicians’ or labels’ digital distributors, but by performance rights societies and, in the case of performance protection rights, by GVL.

This would not just have a definite effect on your wallet, but it would also significantly affect your performance protection rights. By adopting this law, a usage-based billing system that has been in place for years, would simply be removed.

What does “UGC” mean?

User-generated content (UGC) refers to media content that is not created by the provider of a media channel, but by the users of a platform. In other words: anyone can upload a video, create a story and add your music to YouTube, Facebook, Instagram or TikTok. You receive remuneration for each use as this is licensed by the platforms. Billing is accurate and transparent and is done by distributors and labels using the years-long established and well-used structures.

The new guidelines are problematic because they go for the content

This is because, although the EU directive for adapting the copyright law originally aimed to oblige digital platforms to ensure transparent and correct billing of creative services, the exact opposite will be the case in the future under the new German draft law. The new, vague formulations in the text of the German law indeed lead to a reversal of the license requirement. Google, YouTube, Facebook & others are advised to try to clarify license rights, but they are not obliged to do so.

This is problematic because in the case of doubt, you as an artist have to actively levy your own royalties in a confusing thicket of convoluted corporate structures.

The core problems at a glance

• Loss of income for musicians from the middle of 2021
• In the future, remuneration, including for performance protection rights/audio media producers’ rights, will only be billed by performance rights societies
• The destruction of established licensing and usage-based billing by competing sales structures
• GVL paid solely by radio broadcast minutes in mainstream broadcasting. (And even in the case of revenue from other sources, for example, proceeds for private copies (ZPÜ) that have nothing to do with radio and would actually have to be paid according to use.)
• Years of work, to create a new, functioning system. Why? Change/restructuring of the distribution plans and agreement on tariffs. Not to mention the technical implementation for data exchange and billing – of course only if the delivered data quality makes usage-based billing possible. To date, we at recordJet have not seen a single correct instance of usage-based billing by GVL.
• Immense administrative expenses, primarily for yet unknown musicians and labels.

The bad bits: direct compensation, trivial use limits and other things.

In addition to the unusual idea of conducting future billing through performing rights societies, the fact that no individual copyright holders took part in the initial consultations on the new copyright law, only members of the performing rights societies and politicians did, left a bad taste. So politics is the biggest problem for musicians. Many politicians seem to be unable to cope with these creative and complex legal areas the music industry has to offer and, needless to say, do not recognise the problems that would arise for music creators and also for distributors and labels. Here are a few of them:

Direct remuneration:

Sounds great, doesn’t it? Direct and remuneration. Does it work? Unfortunately not. It does not mean that your income from platform uses will be paid as quickly as possible, bypassing the distributor, directly to your account. It means that Youtube & others no longer pay distributors based on the usage of the work; instead they have to somehow pay according to a not-yet-negotiated (probably lump sum) tariff – and, it should be noted, without comprehensive entitlement to usage data.

Currently GVL pays their money according to radio broadcast minutes in mainstream radio and TV, and not according to YouTube clicks. But the funds from the social media platforms often go to musicians who get no or relatively few plays on radio or TV. This includes viral hits, small performances or whole genres such as metal, techno or hip hop. Yes, it is just as bitter as it sounds; these artists would consequently receive hardly any money from GVL, even though they are heavily used on the platforms.

On the other hand, digital distributors billing YouTube, Facebook etc. was done in accordance with the agreed usage and payments were made to the musicians according to the agreed rates. Merely building new administrative apparatus would probably take an estimated three to five years until it is halfway up and running. But when it is up and running, there would probably be no remuneration over a period of years for mainstream musicians and music creators.

The amendment to the copyright law will also be relevant to non-German musicians in Germany. Guilty by association – unfortunately! Because as soon as you sell your music in Germany, the same rules apply to you as do to your German musician colleagues. In Germany, remuneration for you would come about through e.g. two performing rights societies, which would lead to protracted and ultimately probably inaccurate billing – including all of the associated disadvantages, such as the “trivial use limit”, for example.

Trivial use limits – or the 15 seconds thing:

A large proportion of uploads should remain usable without contractual license and should not be blockable, or only be blockable with difficulty. For this, the draft law provides, among other things, trivial use limits, or minimal use. There is no basis for this in the original DSM Directive. “Minimal use” occurs when a song is used for a maximum of 15 seconds. The song can be used by anyone, completely legally, as long as the duration of use is less than 15 seconds.

The consequence is that the platform must not block this content and is not responsible for it pending the conclusion of appeal proceedings (requested by the affected the copyright holders). In other words, a snippet of your song should be usable publicly for a (small) collectivised lump sum remuneration by every non-commercial uploader, without permission and without liability.

In addition to unjust remuneration, this also risks abuse. You as an artist must accept that 15 seconds of your songs will be used for tasteless parodies, dissemination of questionable content and in the worst case, for ideological or religious goals which may be contrary to your own opinion. Peter Maffay summed it up brilliantly in his open letter in the Süddeutsche Zeitung:

…It is a matter of ownership and above all the question: “Does what I create with my head and my hands belong to me?” “…If I plant an apple tree, the apples belong to me. If passers-by help themselves to the apples, that would constitute criminal theft, even if it is a low value commodity.

For Maffay, the entire revised German draft law – and the trivial use limit – looks grim:

…If in the past, a small section of a well-known song was used for advertising purposes, this would happen with the consent of the author and, of course, against remuneration. According to the draft law from the Federal Ministry of Justice, this should now work differently online: any user who produces clips should be able to use and even edit – that is to say change – 15 seconds of a song for any purpose and in any context free of charge. What the nice-sounding concept of ‘democratisation of the internet’ actually involves is the partial compulsory purchase of a profession that is not happening in any other EU country. The assumption that influencers and Youtubers have no commercial interests is downright naive. With their clips they generate a personal audience, which they can then monetise through advertising and product placement. Some internet stars earn much more than do the artists whose songs they use for their purposes without asking.

The abuse of this trivial use limit became clear in the 2017 Bundestag elections when some parties used the Toten Hosen’s hit “Tage wie diese” to emotionalise the electorate and just used the most significant line “on days like these, you just wish for infinity”. By the way, the duration of that line: 8 seconds, ergo minimal use. In this example you can see that “stealing” 15 seconds really is not trivial. Quite the contrary – the right 15 seconds could very well be more than enough to capture the essence of a song.

In the future, remixing, mashups and sampling your work is “legally permitted”

In addition to quoting, parodying and caricaturing, the DSM Directive provides a new legally permitted use: pastiche. There is, however, no generally valid definition of this. It is often equated with imitation or homage. However, the German draft law extends the term to include sampling, remixing, mashups and fan art etc. This means that in the future, uploaders will have the option of marking (“Flagging”) the use of your work as a “pastiche” – in other words legally permitted – and thus the upload will stay online until a complaint procedure has concluded.

General definition of pastiche

By being inserted into the existing copyright law (UrhRG), the pastiche definition does more than regulate the upload platforms. According to the new version of the copyright law, copying, distribution and public reproduction of a work for the purposes of pastiche is justified. Unlike the copyright law for upload platforms, the general copyright law does not provide for remuneration/compensation for the copyright holders for such usage.

Red button! Back to basics with notice & takedown

While uploaders have something of a “green button” with so-called “flagging”, there should be a “red button” in the future for copyright owners. With this button, content can be blocked immediately, but only if publication credibly leads to a significant economic disadvantage. If the block was unjustified, the copyright holder shall be liable for damages vis-à-vis the upload platform and the uploader! Otherwise, the copyright holder is only entitled to initiate a complaints procedure which has to be decided within one week. If the publication is unjustified, the copyright holder will receive compensation and the uploader may be blocked for a short period of time.

Help from the Federal Council, but the crime continues

After Peter Maffay gave his opinion in the Süddeutsche Zeitung and other artists and distributors brought attention to the issue, the VUT (Association of Independent Music Companies) crept forward, has not shied away from confrontation and has promoted public discussion. And it has borne fruit! In early 2021, the Federal Council also recognised the problem.

The Federal Council considers the new copyright law to be not “practical”, for no other reason than the long waiting times for distribution to the artists. They don’t just condemn the revised law from Federal Justice Minister Christine Lambrecht; they are calling for significant change. The Federal Council has, among other things, declared in writing:

The Federal Council is concerned that the entitlement to remuneration for the public reproduction of copyrighted works in accordance with Article 5, Paragraph 2, Sentence 2 and Article 12 Paragraph 1 Sentence 2 UrhDaG cannot be asserted by the copyright holders themselves, but only by a performing rights society. Due to rapid developments within the digital world, the Federal Council is concerned about negative economic consequences for creators and copyright holders and in any subsequent legislative procedure asks for the relevant regulations to be opened up.

Yet it seems that the 20-page objection by the Federal Council has not been listened to. The VUT believes the reason for this may be that the narrative of the internet fundamentalists is that the directive (once again) would bring about the end of freedom on the net. Upload filters would quickly block masses of content, there would be censorship and the end of the freedom of expression would come. This narrative has been vehemently and continuously presented by a handful of “digital” and “copyright experts” who are omnipresent in the media and has successfully supplanted the fact that upload filters have always existed.

Furthermore:

…The average politician, without our industry know-how, obviously doesn’t know any of this and therefore in balancing “the definition of pastiche is too far” and “OVERBLOCKING ALARM!!! THE INTERNET IS BROKEN!!!” it is more likely that they will save the internet, rather than our existence.

Unfortunately, the Federal Ministry of Justice and Consumer Protection under Lambrecht (SPD) is simply not listening and all criticism by the VUT and other music creators is ignored.

What you can do to fight this:

The VUT has vociferously lobbied for the law to not be adopted before the beginning of June. They are taking the approach that for musicians the option of billing through a) performing rights societies or b) according to use through partners, like digital distributors, should remain. The corona crisis has shown each and every one of us how important every euro is for many musicians who often fall through the cracks when they need help.

And as for you: There will be an open letter which should be signed by as many musicians and music creators as possible. This letter will be published in the press and sent to all members of the Bundestag. You can actively participate and make your voice heard by signing it. If you want to sign the open letter, write an e-mail to: heidemann@vut.de in which you indicate that you would like to be involved. That’s all you need to do!

We at recordJet support what VUT is doing and hope that with this article we have given you a little insight – into your rights, your options and how important the protection of your work is.