GigaOm reports that Spotify launched in Germany this past week without backing of GEMA, the German Society of Administration of Copyrights. The organization represents the copyrights of more than 64,000 members, as well as over 2 million copyright owners all over the world. Negotiations between GEMA and Spotify are still ongoing, with the final negotiations said to take place later this month. Spotify has always placed weight on the by-the-books legality of their service, which is why it is interesting they went ahead with the launch.
GEMA doesn't come across as an organization inherently against new forms of content distribution. At the end of January the organization signed a contract with Deezer, a competing web-based streaming service. The press release seemed to even downplay the Deezer agreement and posture for Spotify saying, "[the agreement] clearly leads the way for foreign services like Deezer to launch its services in a strong and mature market such as Germany."
But ticking off this particular group of rights-holders can have consequences. GigaOm reports:
To be fair, this isn’t the first time that a music service launched in Germany without settling all the details with GEMA. Many years ago, Universal Music launched its own download service — dubbed Popfile — in the country without any contract with the rights holders group. But being at odds with GEMA can also lead to lots of trouble: Negotiations between the group and YouTube over licenses for music videos broke down two years ago, and numerous music videos have been blocked in Germany ever since.
Spotify has released an statement saying “Spotify offers a legal service in Germany. We are in ongoing discussions with GEMA to formalise a long-term agreement. We are paying composers and lyricists in Germany, just as we pay composers and lyricists in all other countries in which we operate.”