C3S vs. GEMA

With C3S, composers and lyricists are free to decide whether they want their exploitation rights represented classically or by a "Creative Commons" license. As C3S co-founder and managing director Wolfgang Senges explains, the aim is to give artists more flexibility over how their work is represented.

"The artist is free to choose whether it's a completely free CC license, which means the work can be used in any context without prior consent," he said, "But he could also specify that the work can be used for free in a private context but if commercially, then for a fee. Furthermore he could also go for an all-rights-reserved option as per the GEMA agreement." Such freedom of choice when it comes to licensing currently doesn’t exist with GEMA.

Decision making at C3S meetings is also regulated differently; while composers all have equal voting rights, publishers only fulfill an advisory role. GEMA in contrast operates a caste system whereby around 3500 composers, lyricists and publishers, having achieved a certain level of distribution, are categorized as "standard members" with full voting rights. On a different tier, around 65,000 "extraordinary members" can collectively delegate a small number of authorized voters.

The pros and cons

Despite the frontal attack, GEMA is keen to adopt an amenable tone. Jazz musician and composer Klaus Doldinger, a long-standing member of the group's advisory board, is always pleased to see colleagues engage and organize. Yet as a musician, he is critical about free licenses such as those offered by C3S, as they allow artists, under certain circumstances, to obstruct potential revenue.

"It hasn't really been thought through what kind of consequences this will have," said Doldinger, "If I allow a work to be used without any remuneration, then its revenue potential is gone forever, and that's fundamentally a mistake."

In contrast, singer/songwriter Christina Lux welcomes the freedom of choice offered by the C3S licensing deal: "In general I think an artist should be able to freely decide what he or she gives away. If I create a work and say that can be used free, I want to be able to do that." Although a registered GEMA member, she has mixed feelings about her relationship with the agency. Critical of the complex and opaque accountancy regulations, Lux is often irritated by GEMA's heavy-handed assumptions. For every public performance a promoter has to meticulously prove that no GEMA registered music is played to avoid performance fees.

The battle with Youtube

This legally binding reversal of proof guarantees GEMA an income but makes the organization unpopular. It’s a dilemma that also affects C3S. Founder Wolfang Senges himself admits that even if two competing collecting societies exist in the future, it's likely that only minor aspects of the business model are likely to change. "We'd have to come up with something so we can establish an appropriate assumption, perhaps together with the GEMA," he explained.

What is clear is that new regulations shouldn't be so harshly implemented that anyone who uses registered material without paying instantly has criminal proceedings opened against them. Mutual dialogue is important instead. Another conflict rankling music fans and hurting GEMA's image are the ongoing tough negotiations with Google over registered music uploaded to YouTube. Many users blame GEMA for the fact that countless YouTube videos are blocked in Germany. Yet C3S would also have to collect fees for its artists if their music appears online and thus runs the risk of making itself equally unpopular.

Slow progress

At present C3S is seeking funding. The agency has already received 200,000 euros ($270,300) from the state of North Rhine-Westphalia as part of an innovation grant scheme. The sum has to be match-funded by the end of 2013 however. An online crowdfunding campaign has also seen C3S add some 100,000 euros ($135,200) to the coffers.

Still missing are around 70,000 euros ($94,600) of initial capital, required for developing C3S's technical and organizational infrastructure in 2014. Filing an application with the federal patent office to officially register the company as a collecting society won't be possible until at least the third quarter of 2015. According to founder Wolfgang Senges, after filing, the application approval could take from anywhere from six months to a year.

The power struggle continues

The showdown between GEMA and C3S to attract new members is unlikely to take place before 2016. Klaus Doldinger points out that the conflicting licensing models will rule out dual membership. He doesn't see any serious competition in C3S however, pointing out that free licensing is only interesting to a handful of musicians. "The only cause for concern would be if significant numbers of members left GEMA to join C3S, but that’s unlikely to happen. I’m not worried," said Doldinger.

Despite being sympathetic to their intentions, musician Christina Lux is skeptical about whether she’d make the switch from GEMA to C3S. The annual year-end pay out from GEMA is an important source of income for her. As a full member, she can even expect a small pension from the organization. But for the new generation of musicians she thinks an alternative collecting society is important as they have a more flexible approach to self-promotion online and therefore need new licensing models. Lux is curious to see how the C3S approach develops; "First things first. The priority for them now is to get things up and running and show how this model works. It’s going to be very interesting. I'm certainly going to keep an eye on it."