Distribution in Music on Demand (Streaming & Download)
Music at your fingertips: Music on demand
Just a few years back, it was hardly thinkable to have almost any music available in one’s pocket. Music distribution in digital form has increased rapidly and revolutionised the music world. Be it hip hop, pop, classical music or jazz, never before has there been such a wide range just a click away. And the trend continues.
How distribution in the music on demand sector works, we will show you here.
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For more fairness and transparency on the streaming market
In the online sector and especially when it comes to streaming, there is a lack of fairness and transparency for creators. The digital market for creative contents must therefore be better tailored to the needs of the creatives and enable them to earn their economic livelihoods. As a consequence, we advocate for a better participation of the music creators in the income of major online platforms. So that our members get paid what they deserve.
Music on demand (MOD) – in simple terms
Music on demand means the possibility of downloading music from an internet provider or service (download) or listening directly to it via streaming.
Please note: When it comes to music on demand (MOD), the focus is clearly on music only. It thus distinguishes itself from our categories video on demand (VOD) and mixed online platforms (GOP). In both VOD and GOP, image resp. video play a more significant role.
Music on demand at a glance
This is how the categories are divided up:
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In the music on demand streamingcategories (MOD S and MOD S VR), GEMA pays out royalties from streaming services such as Spotify, Deezer or Apple Music.
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In the music on demand downloadcategories (MOD D and MOD D VR), GEMA pays out royalties from music download providers such as iTunes or Amazon Music.
How we know which works have been used:
Download and streaming providers such as Spotify or iTunes supply us with information which works have been accessed and how often.
This is how we distribute the money collected:
We distribute income in the course of a so-called direct distribution. First, we deduct administration costs from the collected revenues. In the MOD D and MOD S categories we deduct an additional 1 %, which we reallocate for social and cultural purposes. After that, the distribution takes place 1:1 across the works used. In this process, the income from each provider is distributed separately.
This is how the distribution works in detail
From the licence agreement to the royalty distribution:
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We devise tariffs and enter into licence agreements with download and streaming providers.
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Each of the providers separately reports uses from all European countries. Then, this information is matched with the works in our database.
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If the matching process is successful, we can pay out the royalties to the participating
GEMA members.
Online uses that take place outside of Europe are licensed by our sister organisations. From them, we receive the revenues we distribute in our international income categories A and A VR.
Your royalties consist of:
The amount of royalties per stream can vary, as it depends on two factors:
- How extensively users stream and
- How much subscription or advertising revenue is generated per country in a month or a quarter.
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In the case of ad-supported (free) streaming in Germany, royalties are usually in the hundredths of a cent per work and stream.
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For streaming in subscription models (Germany), payouts per work and stream are in the tenths of a cent range.
Music on demand (Download)
The amount of royalties per download is well defined and depends on the sales price. In smaller and economically less strong countries, revenues and therefore royalties are often considerably lower.
Please note: A minimum number of streams is required
For each country, streaming model (e.g. free or premium) and period (month or quarter), your works must be streamed or downloaded at least often enough to generate a few cents for a work-based or click-based distribution. Otherwise, these uses are compensated via supplements in the MOD categories.
Important dates and deadlines for you
Declare works in time:
To enable a smooth distribution, you must register all of your works with us. Therefore, please register your works with their release at the latest. Why is this so important? Because big streaming and download providers report to GEMA on a monthly basis and GEMA can only invoice your work uses if they are registered in our works database.
To register your work, simply use our Online Portal. Once there, please submit the performers and International Standard Recording Code (ISRC). Your record label or your online music distributor can provide you with the code. This is the only way we can easily allocate your work to the music uses.
Annual distribution dates:
In the categories Music on demand we make distributions twice annually, on 1 April and
1 October.
NEW from 2024: We will increase the distribution frequency in Music Streaming (MOD S, MOD S VR) divisions from half-yearly to quarterly. In future, royalties will be distributed on 1 January,
1 April, 1 July and 1 October of each year.
Claim periods:
You have three months to make a claim following each respective distribution date.
Please note: The claim periods also apply to the quarterly distribution in MOD S and MOD S VR divisions starting 1 January, 2024.
To learn how this works and what you need to know in order to proceed, see our claims page.
