GEMA Buys Majority Stake in Music Recognition Company SoundAware 

GEMA, the German collective management organization (CMO), announced Monday (July 24) that it has acquired a majority stake in the SoundAware Group, a Dutch company that provides music recognition services to collecting societies (including those in the Netherlands and Belgium) as well as market research and media companies. SoundAware will continue to operate independently from Hilversum, Netherlands.

Music recognition is a vital part of what collecting societies do since they need to accurately distribute the revenue they collect among rightsholders. As technology makes it easier to do this more accurately, some CMOs have invested in various technology, whether that means contracting for services or investing in developing technology.  

“By investing in a music identification pioneer, we are adding an important key competence to our portfolio: digital music identification,” GEMA CEO Dr. Harald Heker said in the announcement. “The investment in a future-oriented technology is a decisive step for GEMA on the way to becoming a powerful digital collecting society.” (GEMA has announced that Heker will step down at the end of September, to be succeeded by Dr. Tobias Holzmüller, who is currently the CMO’s chief legal counsel.) 

For decades, almost all CMOs had de facto monopolies within their home countries. But European Union legislation has forced many global societies to compete with one another to represent rights they can then license online, although they maintain their offline monopolies in their home markets. (This is not the case in the United States, although U.S. songwriters can choose to affiliate with foreign societies to represent either all their rights or only rights in certain markets.)  

Much of this competition involves money: Who can get the best rates or, in some cases, find the most uses of compositions in order to collect royalties on them. One element of that is accurately identifying songs, a far thornier technical challenge than identifying recordings.  

“We are convinced that the potential of our monitoring technology is far from exhausted,” Harold de Groot, founder of SoundAware, said in the announcement. “With GEMA as a strong partner, we want to develop new digital services for the music industry based on this technology and distribute them internationally.”