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“A rescue umbrella”: New funding offers biz financial boost

As the coronavirus does its best to ensure venues remain shuttered for as long as possible, a range of organisations are stepping in to ease the financial pressures faced by live entertainment businesses worldwide.

In Europe’s largest live music market, Germany, the government has dedicated €50 billion to its creative and cultural industries. The financial aid consists of grants for small companies and the self-employed to cover overhead costs such as renting venues and studio space, and loans for business premises and leasing instalments.

A further €10bn will be provided to facilitate access to social security for self-employed workers for a six-month period, including unemployment insurance and expenses for housing.

Culture minister Monika Grütters calls the aid package a “rescue umbrella for the cultural, creative and media sector”. All cultural institutions in Germany remain closed until 19 April.

“The cultural sector, in particular, is characterised by a high proportion of self-employed people who now have problems with their livelihoods,” says Grütters. “These multilevel protection measures show that the Federal government is determined to do everything possible to counter the devastating consequences of the Covid-19 pandemic in the cultural and creative fields. We won’t let anyone down.”

The funding is part of a wider €750m aid package, approved by the German parliament on Friday, to protect the country’s economy from the effects of coronavirus.

“A high proportion of self-employed people now have problems with their livelihoods”

Other aid set to benefit the creative industries includes short-term work benefits, tax liquidity aids and €550 billion worth of loans, available from state business development bank KfW, with no upper limit set on credit offerings.

The government in Switzerland has also recently announced a targeted package for the cultural sector, totalling CHF280m (€264.6m). The funding has been welcomed by Swiss promoters’ association SMPA and the wider cultural and events sector.

The financial support comes after the Swiss government unveiled a CHF20bn (€18.8bn) emergency loan programme for companies affected by the coronavirus outbreak at the end of last week. After a quick initial uptake in loans, the government is already in talks to increase the available funds.

In the Netherlands, the government is working with industry representatives to potentially bring in legislation to allow event organisers to refund ticketholders with vouchers to spend on future events, rather than cash refunds.

Dutch promoters’ association VVEM recently sent a letter to the government estimating the damage done to the industry by Covid-19 could be as much as €1.5bn over the summer months, and asking for more concrete support with regards to finance and cooperation from local governments.

Rights societies have also been playing their part, with the German music licensing society (GEMA)’s €40m crisis fund for song writers and the UK’s PRS for Music offering grants of up to £1,000 to each of its members.

“We know we need to get money into the pockets of our members quickly and efficiently”

Recent support for the sector in Australia has come from Apra Amcos (Australasian Performing Right Association and Australasian Mechanical Copyright Owners Society), which is bringing forward its live performance royalty payout from November to May.

Members will receive a full year’s worth of royalties using data from last year’s reports.

“The Covid-19 crisis has hit every segment of Australia and New Zealand’s music sector,” comments Apra Amcos chief executive, Dean Ormston.

“From our songwriter, composer and publisher members to the venues, events and festivals and the managers, crew and SMEs of the industry, the impact of necessary government regulations has been immediate and devastating.

“We know we need to get money into the pockets of our members quickly and efficiently.”

The news comes as Australia’s three biggest live companies, Live Nation Australasia, TEG and Frontier Touring/Chugg Entertainment, form a music promoters’ taskforce to call for government aid for small- and medium-sized businesses during the coronavirus shutdown.

“As industry leaders we want to ensure the survival of the many small and medium-sized businesses that support our industry, so that we can continue to make a significant contribution to the Australian economy when we eventually emerge from this crisis,” reads a letter from the taskforce.

“As industry leaders we want to ensure the survival of the many small and medium-sized businesses that support our industry”

Performing rights organisations in France have contributed to the National Centre for Music’s €11.5m emergency fund for the entertainment sector, with Sacem, Adami and Spedidam, each adding €500,000 to the centre’s initial €10m funding package.

Industry body Prodiss had previously deemed the government’s targeted funding for the music and performing arts sectors – which totals €15m – “completely divorced from reality”, although it welcomes the government’s wider €45bn aid package for businesses.

The French government has also dedicated €22 million to support the “intermittents du spectacle”, or freelancers working in the entertainment industry.

Funding for the UK’s cultural sectors has come from a range of places, including significant funding from Arts Council England, which has dedicated a £160 million package for cultural organisations, freelancers and individual artists, £5m from the Help Musicians’ coronavirus financial hardship fund, plus a £500,000 boost from the Royal Society of Musicians of Great Britain, and £1m from the Musicians’ Union’s coronavirus fund.

New Zealand music industry charity MusicHelps has launched MusicHelpsLive, an appeal to support those facing hardship due to the Covid-19 outbreak. The charity aims to raise NZ$2m (€1m) for workers in the live industry.

 


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Gema, promoters agree on increased live music tariff

German performance rights organisation (PRO) Gema has agreed a new concert tariff rate with promoters’ associations, bringing to a close three years of negotiations.

Effective 1 January 2018, tariffs will be levied on net, as opposed to gross, ticket sales, with other services included in the ticket price – such as, for example, fees for camping at festivals – also included for the first time.

The new rate will be 5.75% of net receipts for events under 2,000 people (it is currently 5% on gross receipts), 7.6% for 2,000–15,000-capacity shows (currently 7.2%) and 8% for events with a capacity of 15,000+ (currently 7.65%).

Gema tariff rates, 2018

The changes follow a round of negotiations between Gema (Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte, Society for Musical Performance and Mechanical Reproduction Rights), which has more than 70,000 members, and the BDV and VDKD, which between them represent the majority of Germany’s concert promoters.

Gema board member Georg Oeller says the new tariff structure represents an “important step forward for the work of Gema. Particularly in the rapidly evolving market of ticket sales, including secondary ticketing, [these new rates are] of great importance for the evaluation of appropriate remuneration for musicians.”

In the UK, a similarly long period of negotiations is approaching its end, as PRS for Music moves towards replacing the current flat rate of 3% on gross box-office receipts.

 


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Gema collections top €1bn for the first time

Gema, Germany’s performance rights organisation (PRO) and collection society, last year collected more than €1 billion for the first time, its annual accounts reveal.

A total of €1.02bn was collected in 2016 on behalf of rightsholders, with the 15% year-on-year increase mainly attributable to a deal struck in November between Gema and YouTube, which largely ended the Gema-backed blocking of YouTube videos featuring major-label music.

However, royalty collections from public performances also remained “consistently high”, growing to €371.1m (up slightly from €365.5m in 2015) and once again delivering the lion’s share of collections. “Live music,” reads the 2016 report, “has continued to develop very strongly.”

So stable, in fact, that its continued eclipsing of the recorded market risks putting the future of recorded music in jeopardy, says the PRO, unless recording artists can secure “sustainable compensation from online streaming”. Also important is cracking down “on online piracy, which will deliver a permanent increase in related revenue”.

“Gema has never been as successful in financial terms as it was in 2016”

“Gema has never been as successful in financial terms as it was in 2016,” comments CEO Harald Heker. “An increase of nearly 15% compared to the previous year led to the one-billion mark being crossed for the first time. Such levels of licence collections ensure that composers and lyricists, as well as their publishers, receive a fair remuneration for the analogue and digital exploitation of creative performances.”

Heker warns, however, that government has a part to play if rightsholders ever expect to be remunerated fairly by streaming platforms. “In the fast-growing streaming sector, authors still do not participate adequately in the economic gains and successes of the providers,” he says.

“With the distribution of works protected by copyright, [streaming services] yield a high turnover, yet without adequately remunerating authors. Politicians are more than ever called upon to create a fair legal framework.”

Gema (Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte, Society for Musical Performing and Mechanical Reproduction Rights) is one of the world’s largest collection societies, representing 70,000 members in Germany and more than two million globally. It is one of several PROs known to be offering controversial tariff ‘rebates’ to promoters, which have been criticised by many rightsholders and arguably contributed to the growth of direct licensing.

 


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Promoter discounts questioned at PRS meetings

A meeting involving the CEO of German collection society GEMA descended into a surprise debate over “widespread” promoter discounts given by some European societies.

GEMA boss Harald Heker was a guest of honour at one of PRS For Music’s regular writer representative meetings in London, on 14 December, when prominent live music executives confronted him about how his society, and others in Europe, can justify giving substantial discounts, of 20% and more to certain promoters.

“This is money that is being taken out of the show settlements as PRS income, and given back to promoters in the form of a rebate,” says agent Carl Leighton-Pope who raised the topic at the meeting. “We need some clarity about how much money is being left on the table. Mr Heker was very informative, but none of our questions were answered properly.”

The point was made that many agents and managers were unaware that such deductions from show settlements appear to be the norm in many European countries. “The issue of promoter discounts was first brought to our attention in 1992 by U2’s lawyer Amanda Harcourt, so this is nothing new,” says artist manager Paul Crockford, who was also in attendance. “But a lot of people are unaware of how widespread this is. For instance, there is a 20% discount enshrined in German law, but GEMA gives certain promoters a further 20% discount on top of that and then charges a 15% admin fee itself, so by the time PRS sees any money, 55% might already have been deducted. And it’s not just Germany – it’s Holland, Belgium, Austria and Switzerland as well, and many more.”

Crockford has been pushing for PRS For Music to take a more proactive role in finding a solution to the discounts controversy for some time and IQ understands that PRS representatives will attend a January meeting with GEMA in Munich to discuss the situation.