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Business News (more headlines) 02-17-2004

Germany: Record Industry Threatens Existence Of Composers And Lyricists

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GEMA Chief Executive Officer and President Prof. Dr. Reinhold Kreile comments on the press information released by the Phono Associations on February 3, 2004 ("Changes to licensing conditions needed")

"The attempt by the German record industry to reduce the current royalty rate for licensing audio carriers from 9.009 % of the Published Price for Dealers (PPD) to 5.6 % is outrageous. The reasons now being cited by the General Manager of the German Phono Associations, Gerd Gebhardt, to justify this rate cutting at the expense of the creative composers and lyricists are deceiving the public.

Gebhardt accuses the music authors of living remote from reality "on a safe island in the middle of a stormy sea", merely because they are demanding a reasonable share of the proceeds from audio-carrier sales. In actual fact though, the music authors have already for years been suffering from the effects of the drastic slump in sales in the audio-carrier market because their share is tied to these sales; now the record industry intends to aggravate this difficult situation of the music authors even more and pass on its sales losses of the past four years to the backs of the creative authors by cutting their remuneration by 40 %: that is - quite deliberately - threatening their very existence.

In a situation, where the phonographic industry should be focusing all its entrepreneurial intelligence on seeking forward-looking solutions to overcome the crisis in the audio carrier market, it comes up with the bright idea of depriving the creative composers and lyricists of their fair reward, in order to compensate for its own sales losses of past years.

The music authors, whose creativity forms the very basis for commercial success in the music market, expect the representatives of the music industry to think up solutions for the future like the speedy implementation of sustainable business models in the online sector, but not strategies for reducing the remuneration of the creative authors and minimising the industry's costs that trample on the copyrights.

The composers, lyricists and music publishers united in GEMA will not allow group strategies planned for years ahead to destroy the commercial existence of the music authors and so too the diversity of our country's music culture that is promoted so well by small and medium-sized music enterprises."

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