Collecting Societies Again

The press office of the Bundesgerichtshof (BGH) informs us that the copyright senate of the BGH has issued a judgment on the calculation of collecting society tariffs (BGH, 27 October 2011 - I ZR 25/10, press release available here).

In respect of indoor events, it is the established practice of German music collecting society GEMA to calculate the royalties it collects based on the size of the room where the music is played. To GEMA at least, it seemed logical enough to apply the same to outdoor events such as street fairs and Christmas markets. Accordingly, it took the size of the entire venue as reference point, from the first to the last stall or from the first to the last wall enclosing the space where the event took place (it's Friday, time to rhyme...).

As such things go, the organisers of a number of such outdoor events disagreed with GEMA's calculation methods. In their view, only the space where the sound from the stage can actually be heard should be taken into account. From that space, one should deduct the areas where visitors could not go, i.e. the stalls, the areas where they could not stay for more than a fleeting amount of time, i.e. public transport areas, and the areas where the music from the stage was overlaid with other music, i.e. music played at individual stalls.

Both the court at first instance and the court of appeal decided that the GEMA was entitled to determine royalties according to the size of the entire venue. The BGH confirmed these decisions. It pointed out that it is typical for outdoor events such as street fairs and Christmas markets that the audience in front of or in good listening distance to the stage constantly changes and new listeners replace the old. Consequently, the overall number of people listening to the music is substantially larger than the number of people the space where the music can be heard clearly could hold at any one time. The court added that the music played on stage usually characterises the entire event and that it would be unreasonable to ask GEMA to attend every single outdoor event in the country and measure the space where the music from the stage is clearly audible, and the space within that range where the audience cannot or must not stay or where other music overlays the music emanating from the stage. For reasons of practicality, then, GEMA's method of calculation was deemed appropriate.

I can't help remarking that a constantly changing audience - whether on a market or in a club - means that many people listen to little bit of music, whereas a constant audience - whether at an indoor or an open air concert - means that fewer people listen to more music. If 1,000 people listen to 10% of the music, isn't the end result the same as if 100 people listened to 100% of the music?

Also, I'm not exactly a science whiz, but shouldn't the laws of physics enable you to calculate the area where the music is audible if the organiser lets you know how loud he's going to play it? Throw in a plan of the site - which must exist because German authorities would not allow the organisers to put up stalls willy-nilly - and you can calculate the area covered by stalls as well as any areas where visitors cannot or must not go. Which leaves the musical overlay issue. While personally I find involuntarily listening to random mash-ups of songs that weren't so great in the first place deeply annoying, it appears to be something the organisers of such events seem to encourage for some reason. Otherwise surely they could just play music on the big stage and make putting up a stall conditional upon not playing your own music. So in my view, there is no good reason for deducting the areas of overlay.

We shall all have to wait for the written judgment to be released in order to find out why the BGH thinks the solution I just came up with is less than brilliant. In the meantime, I look forward to any comments or alternative approaches.