Collecting societies

Function, rights, and funding of collecting societies: GEMA, GVL, VG WORT, and VG Bild-Kunst

 

Status: Dezember 2023

§ 1 What are collecting societies, and which ones play a role in the performing arts?

Function of collecting societies

If artists compose a piece of music, write a novel, or paint a painting, they are the authors of these works. When artists sing for a sound recording, or studios produce sound recordings, they are not the authors but are entitled to related rights in these products. 

Authors and holders of related rights may grant third parties rights of use in their works or performances in exchange for a fee. They may also take action if third parties use their protected works or performances without permission in violation of the Copyright Act. 

Authors and holders of related rights may either exercise their rights themselves – including asserting claims for injunctive relief and damages in the case of unauthorised use – or have these rights administered by a collecting society.  

The administration of rights by collecting societies is advisable in cases where rights holders are unable to manage the licensing of their rights effectively themselves – for example, when it is difficult for them to monitor unauthorised uses of their works or to enforce their financial claims. 

However, assigning rights management to a collecting society also comes with certain limitations for artists. On one hand, artists often lose the ability to decide for themselves how to license the rights they have transferred to a collecting society; on the other hand, collecting societies are generally also not free to choose to whom they grant those rights. They are subject to what is known as a “compulsory licensing obligation” (Section 9 of the German Collecting Societies Act (VGG). This means they are legally required to grant rights of use on reasonable terms to anyone wishing to use works provided they administer the necessary rights.

Example 1

(Concerning the rights to a composition): If a director wishes to play a piece of music on stage as background music and the composer of that piece is a member of GEMA, GEMA is responsible for granting the rights to use the composition. This means that the composer can no longer decide where their piece may be performed because the licensing for the requested use is handled by GEMA. In return, GEMA ensures that the composer is at least paid retroactively for the use of the piece – even if the use was not reported or paid for in advance. 

The most important collecting societies for the performing arts include:

  • the German Society for Musical Performing and Mechanical Reproduction Rights (GEMA) for composers, lyricists, and music publishers
  • the German Organisation for the Management of Neighbouring Rights (GVL) for performing artists (e.g. musicians, singers, producers of sound recordings)
  • the collecting society WORT (VG WORT) for authors and publishers, among others
  • the collecting society Bild-Kunst (VG Bild-Kunst) for visual artists, photographers, and film producers.

Artists can also conclude rights management agreements with multiple collecting societies. For example, if an artist both composes and performs music, they may be a member of both GEMA (for composition) and GVL (for performance). 

Collecting societies in Germany are connected to their foreign partner organisations through representation agreements. This means that theatres can obtain usage rights for works by foreign composers via GEMA, and artists receive remuneration for the use of their music abroad.

How does the exploitation of rights by collecting societies work?

Rights holders (artists, publishers, producers of sound recordings, etc.) are generally not required to have their exploitation rights administered by a collecting society. An exception is the system of extended collective licensing under Sections 51 and 51a of the VGG, although rights holders may object to such arrangements. 

If rights holders wish to be represented, a “rights management agreement” is concluded between them and the relevant collecting society. These agreements specify which rights are administered by the collecting society and which remain with the rights holders (see the sections on individual collecting societies for details).

Which rights do collecting societies administer?

Primary and secondary exploitation

Legal literature distinguishes between primary and secondary exploitation of rights. Some collecting societies administer only secondary exploitation rights. GEMA administers both primary and secondary exploitation rights. GVL administers primarily secondary exploitation rights. 

These terms are not used consistently across all contexts. In the field of music, primary exploitation refers to the first form of use of a work. In the case of a piece of music, this might be the creation of a recording on CD and the release of that recording through the sale of the CD. Secondary exploitation occurs when the published recording is played on the radio or included on a compilation CD. Tertiary exploitation refers to a third use of the secondary exploitation – for example, when a radio broadcast of a music recording is played in the background in a theatre foyer.

Contractual remuneration rights

Collecting societies administer the exploitation of rights under the Copyright Act. Which exploitation rights the collecting societies administer depends on the content of the rights management agreements. For example, composers who grant GEMA rights to a composition do not assign all exploitation rights in that composition to GEMA. GEMA grants rights for certain uses, such as when music is played in the background during a performance (small right). However, GEMA does not hold the rights for the exploitation of music in dramatic works such as musicals (grand right). These rights must be obtained directly from the publisher or the composer.

Statutory remuneration rights and participation rights

Collecting societies also administer statutory remuneration and participation rights.

Statutory remuneration rights under statutory licences

The Copyright Act provides for statutory licences. Under a statutory licence, the use of a work is permitted without the authorisation of the rights holder; however, the rights holder is entitled to receive remuneration for such use.

Example 2

One example of a statutory licence with an associated remuneration right is the permission to make copies for private or other personal use (Section 53 of the Copyright Act), together with the obligation on manufacturers of copying devices and storage media to pay remuneration under Section 54 et seq. of the Copyright Act. Remuneration rights arising from statutory licences may be asserted by collecting societies. For some statutory licences – such as private copying under Section 53 of the Copyright Act – these claims may be asserted only by collecting societies.

Participation rights

Performing artists (musicians, bands, orchestras, choirs) are entitled to 20% of the revenue earned by producers of sound recordings from the reproduction, distribution, and making available of the recording if the transfer or granting of rights by the performing artists was compensated with a lump-sum payment. This participation right may be exercised only through a collecting society.

Funding of collecting societies

The money that collecting societies pay to rights holders comes from various sources. On the one hand, licence fees are incurred when certain types of works (e.g. music via GEMA or visual art via VG Bild-Kunst) are used. Most collecting societies have agreements with companies and industry associations that typically use the types of works they represent, as licensing on a case-by-case basis would be too cumbersome (e.g. VG WORT with libraries or GEMA with YouTube). Another key source of funding for collecting societies is the “copyright levy”. This is a flat-rate levy applied to the purchase, rental, or lease price of devices or storage media (e.g. scanners, printers, computers, and mobile phones) that are used for reproduction or storage for lawful private purposes. For example, copiers are typically used to reproduce books (i.e. to make copies within the meaning of Section 16 of the Copyright Act). As a result, part of the purchase price of a copier is paid to a collecting society (e.g. VG WORT or VG Bild-Kunst), which represents authors or book publishers. 

The copyright levy is paid by all consumers regardless of whether they use the devices for one of the aforementioned purposes. The collecting societies are responsible for administering these levies and then distributing the amounts to the respective rights holders according to a specific calculation method (distribution). The respective calculation methods can be found on the websites of the collecting societies. 

New sources of income are continually being added as well. Since 1 August 2021, the Copyright Services Providers Act (UrhDaG) has held social media platforms such as YouTube, Facebook, and TikTok liable for the content uploaded by their users. To avoid copyright infringement, the platforms must license the uploaded content. This new regulation also changes and expands some of the revenue sources for collecting societies. For example, VG Bild-Kunst is in talks with social media platforms to conclude a “social media image license”. Under this arrangement, the platforms will pay certain amounts to VG Bild-Kunst in exchange for the right to upload the images of all the artists it represents.

§ 2 GEMA

Composers, lyricists and music publishers are members of the GEMA. 

GEMA has extensive powers through its rights management agreement. For example, GEMA administers the (small) right to perform (e.g. playing an unaltered song as part of a stage production; for the grand right, see below), the right to broadcast (e.g. the airing of the stage production on radio or television), and the right to communicate to the public by means of sound and audiovisual recordings (e.g. showing the stage performance via a screen in the theatre foyer) as well as the right to make available to the public (e.g. streaming the stage production film on its own website but also on platforms such as YouTube and Vimeo).

However, GEMA does not administer, for example:

  • adaptations of copyrighted works. If a work is to be adapted, the rights holders must give their consent.
  • The right to combine music with a film (film production rights) is also, in most cases, not granted by GEMA, even though it would technically be authorised to do so (provided the rights holders do not object). In practice, however, GEMA rarely exercises this right and typically refers to the rights holders first. For example, if a choreographer wants to create a dance film, they must first obtain the relevant film production rights for the music from the musicians, the publisher, and the label. But caution is advised: If the film is to be streamed on the internet, GEMA grants the right to do so provided the music falls under the small right (see also the following article). This therefore requires both the licence for the film production rights, which is obtained from the composer/publisher, and the streaming rights, which are obtained from GEMA.
  • Rights for dramatic performances (“grand right”) (see below) must be obtained directly from the authors or the publishers representing them.  

Distinction between grand right and small right in performances

The terms “grand right” and “small right” have developed from practice. They provide information about whether music rights and their associated lyrics are licensed by GEMA (in which case it is considered the “small right”) or only by the authors or publishers themselves (in which case it is considered the “grand right”). 

The “small right” includes:

  • the reproduction of a performance limited to the music
  • the performance of a musical work, also known as a concert performance (i.e. in the form of a concert)
  • music played merely in the background This includes playing music in the background in a theatre – but also on stage – when it is integrated into the performance unchanged without dramatically accompanying the action (e.g. as a soundscape). 

This “small right” is administered by GEMA and does not need to be obtained directly from the authors or rights holders.

  • The “grand right” refers to the dramatic performance (within the meaning of Section 19(2) of the Copyright Act) of a dramatic-musical work, where the music is integrated with the visual action and forms an integral part of the performance rather than merely accompanying it. This includes the staged performance of operas, musicals, or dramatic ballets, and, depending on the case, even spoken theatre. In these cases, no licensing is provided by GEMA. 

In contrast to GEMA, publishers are not subject to a compulsory licensing obligation and are not required to grant rights. They may choose whether or not to agree to the use of the work in each individual case. They can set the price themselves, and this can sometimes be quite expensive.

The distinction between grand right and small right can be very difficult in individual cases because not every performance of music on stage qualifies as a “dramatic” performance within the meaning of the law; it depends on the specific manner in which the music is presented in each case. An interesting case on this was decided by the Düsseldorf Regional Court (LG Düsseldorf, judgement of 12 June 2019 – 12 O 263/18). In this case, it was decided that the staging of the play “Idiot”, based on the novel by Fyodor Dostoevsky, constituted a dramatic performance because, among other factors, the music was “designed in coordination with the director of the production and tailored precisely to specific scenes”: When considering the staged performance of the play, it becomes clear that the music is particularly adapted to it, highlighting specific parts of the plot – whether by contrasting with them and ending abruptly yet precisely at the beginning of a line of dialogue or by supporting the atmosphere of particular scenes and reflecting the moods conveyed through the actors’ performances. In doing so, the dramaturgy of the spoken word and the music combine to form a single entity.

For more information on the rights transferred, visit the respective website. 

§ 3 GVL

The GVL represents, among other things, the rights of performing artists, producers of sound recordings, organisers, and music video producers. This also includes instrumental musicians, singers, actors, dancers, performers, stage directors, and artistic producers. 

For typical primary exploitation rights, such as the recording of a musical work, artists can transfer their rights by contract to a record label or a theatre. Unlike GEMA, GVL does not administer the exploitation of these rights. In the case of secondary exploitation such as playing a previously released vocal recording on the radio, no rights transfer is required or possible from the artists because the Copyright Act does not grant an exclusive right for this secondary exploitation. This means that anyone (e.g. radio stations) may broadcast the released recording without further consent from the artists. However, the law stipulates that a fee must be paid to the artists in such cases. The payment of this fee is often handled through GVL. 

Thus, if a singer performs a piece on stage, it is legally filmed, and the recording is published as a digital performance on the theatre’s website, GVL manages the payment processing if the piece is later shown on television. 

In this example, the singer was able to choose whether to grant rights for being filmed (physical exploitation) and rights for the publication of the resulting recordings on the website of the theatre (non-physical (primary) exploitation). If the singer has agreed to both, they no longer hold exclusive rights to the broadcast of the recording on television. The broadcast is now possible without their consent but must be compensated (the singer’s remuneration claim). 

Further information on the rights transferred can be found on the website of the GVL. 

§ 4 VG WORT

VG WORT represents, among others, authors and publishers in managing their rights to published texts. 

Authors and publishers specify in the rights management agreement which rights they wish to have administered by VG WORT and for which countries. 

Rights managed by VG WORT through the rights management agreement include the right to public performance via sound or audiovisual recordings (e.g. CDs, DVDs). 

VG WORT is also generally responsible for (television) broadcasts of texts from published works or released spoken word recordings. 
However, VG WORT is not responsible for all cases of public performance. Cases in which it is not responsible are the public reproduction by means of video or sound recordings in stage houses (as opposed to cinemas, for example) or the incorporation of excerpts of a work into another publicly performed work. In these cases, permission must be obtained directly from the rights holders. These exceptions apply to many scenarios commonly found in the performing arts. For example, if excerpts from a novel are to be used in a stage production, direct contact must be made with the authors or the publisher. 

VG WORT has transferred its rights to published literary works that have been lawfully adapted (e.g. poems incorporated into songs) to GEMA for fiduciary management. Payment therefore needs to be made to GEMA only once and not again to VG WORT. However, this applies only if it concerns the “small right”. For example, if excerpts from a novel or another existing text are integrated into a musical work that is then recorded and played, initially GEMA is paid. It then passes a portion of that payment to VG WORT. 

In certain cases, VG WORT also administers the right to public recitation (not performance) of published works. Even in these cases, the rights holders retain the authority to organise the recitation themselves and grant or deny permission. 

Further information on the transferred rights can be found in the rights management agreement of VG WORT.

§ 5 VG Bild-Kunst

VG Bild-Kunst represents authors from the visual arts across a wide range of industries. Since the needs of these industries differ, VG Bild-Kunst is organised into three professional groups: 

  1. visual artists (e.g., painters, sculptors, and architects)
  2. photographers, photojournalists, graphic designers, and others
  3. directors, cameramen, costume designers, producers of independent productions, and others 

In general terms, VG Bild-Kunst is responsible for the areas of art, images, and film in their various forms.

For individuals working across different creative fields, membership in multiple professional groups may also be considered. Each professional group has its own rights management agreement with varying rights assignments and distribution rules, although there are many similarities. 

For its members in the first two professional groups (art and images), VG Bild-Kunst administers the statutory remuneration rights for all works. The same applies to members of the third professional group (film producers). For these members, VG Bild-Kunst also administers their statutory remuneration rights for all film works. Additionally, members of the first professional group (art) transfer usage rights for their works. The usage rights granted include the right of reproduction as well as the online right. Thus, rights can be obtained through VG Bild-Kunst for works in this professional group only if they are to be reproduced or shown on the internet. For works in the other professional groups, the rights holders must be contacted directly for the aforementioned types of use. 

For the first two professional groups (art and images), the statutory resale right under Section 26 of the Copyright Act (resale rights) is also administered. Unlike with other types of works, visual artists often have this “resale right”, which entitles them to a share of the proceeds when their works are resold in the art trade. 

The rights that VG Bild-Kunst may grant in detail can be found on its website.