"Contract offers must be checked carefully!"
GEMA (German Society for Musical Performing and Mechanical Reproduction Rights) set new remuneration rates for music playback in fitness and health classes on July 1, 2015. Existing contracts were terminated. The new remuneration rates were or will be determined for each studio based on a questionnaire about membership fees, participant numbers and the number of course hours offered per month.
Dr. Pamela Meyer-Siebrasse advises companies from various sectors on the "topic" of GEMA for the Bielefeld law firm Dr. Geisler, Dr. Franke und Kollegen - including many fitness and health studios.
F&G asked the expert about the areas in which the industry has focused its advice and whether the new contracts for studios have now been fairly determined.
F&G: Dr. Meyer-Siebrasse, approximately how many requests for advice on the new GEMA contracts and the associated questionnaire have you received since the end of June?
Dr. Pamela Meyer-Siebrasse: So far, we have opened files for a good 100 studios and conducted the contract negotiations with GEMA, or these are still ongoing. About another 100 studios as well as some stakeholders have sought advice from me by telephone.
F&G: What was the focus of the studios' need for information?
Dr. Pamela Meyer-Siebrasse: The focus of the advice was and is on the question of which membership fee is to be applied when calculating the remuneration for music in courses.
If a studio does not offer a separate course fee, the all-inclusive fee for a 12-month subscription is to be applied in accordance with the tariff. Only services that can be opted out may be disregarded, e.g. a drinks subscription that can be opted out. Alternatively, a studio can have its average fee applied. GEMA would like to see evidence of this in the form of business management documents.
There is also a great need for advice on GEMA-free music - here it is primarily a question of providing evidence etc. - and the question of which courses this music is suitable for.
Finally, many studios were able to make the contracts somewhat more favorable by pointing out that the conclusion of an annual contract brings a discount of two months' remuneration.
The notification to GEMA that a membership in the BVGSD or other associations exists was often not included by the respective clerks in the new contract offers and the resulting discount of 20% was not granted. In many cases, I sent a corresponding membership certificate to GEMA again and asked for new contract offers that included the discount.
F&G: What could have gone wrong without the professional support of your law firm?
Dr. Pamela Meyer-Siebrasse: The biggest problems were experienced by studios that were initially not advised by us or that, contrary to our recommendation, only stated a module price of a few euros for the membership fee. GEMA has not accepted this in any of the cases I have seen so far. GEMA either contacted the studios after receiving the questionnaires and asked them to explain the membership fee structure or "determined" this on its own initiative and used the highest membership fee (all inclusive) to calculate its remuneration on the basis of the information provided on the studios' websites - without asking them beforehand. This has led to incredibly high amounts in the contracts offered.
In most cases, GEMA also checked the courses that had been specified by the studios. In cases where the studios had not indicated all the course hours that were listed on the course schedule - usually also published on the Internet - GEMA often asked whether the other courses were offered without music or with GEMA-free music. In some cases with GEMA-free music, corresponding proof of GEMA freedom was requested. In some cases, however, GEMA included the additional course hours in the contract offer on its own authority, which could result in enormous remuneration amounts.
F&G: What could happen to the studios in the worst case scenario?
Dr. Pamela Meyer-Siebrasse: The worst thing that could happen to the studios, and still can happen, is that the information is changed. GEMA has changed and continues to change the information provided by the studios - sometimes on its own initiative and without consulting the studios about the background to the information.
Many studios are unable to recognize the changes made by GEMA in their contract offers and may sign contracts that are significantly higher than the actual level to be concluded. The contract offers must be examined carefully so that corrections can be agreed with GEMA if necessary.
Source: F&G
Published on: 24 November 2015