Music Earns Money in Georgia despite Online Piracy

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The FINANCIAL — It’s not long since Georgian restaurants and radio stations started paying a license fee for playing foreign and local music.


The Georgian Copyright Association claims that the money collected from commercial organizations is transferred to foreign authors, as well as money being paid from foreign companies to Georgians. Though this raises questions with some local radio stations, who believe that the license fee is too high and that there is no evidence of the money being delivered all the way to the respective composers.  

“Since September 2011 GMC Group has paid around 1,300 GEL to the Copyright Association for music programmes. Club Kalakuri pays more than 700 GEL monthly, restaurant Dzveli Sakhli – more than 400 GEL, and restaurant chain Shemoikhede Genatsvale on Lagidze Street – more than 200 GEL to the Copyright Association,” Elza Kavelashvili, Lawyer at GMC, told The FINANCIAL.


Giga Kobaladze, Chairman of the Georgian Copyright Association, GCA, stated that the sum has been transferred to composers: Vajha Azarashvili, Matsatso Sebiskveradze, Liliko Nemsadze, Rusa Morchiladze, Iliko Sukhishvili, Kakha Tsabadze, heirs of Giorgi Lagidze and Vakhtang Chabukiani, heiress of Petre Gruzinski, Lika Mgeladze.


Popular singer Irma Sokhadze told The FINANCIAL she received the first an only salary from the GCA one year ago.


“I received GEL 224 from the very first month after new management of the Association was appointed. Some of my songs were broadcasted by Georgian Public Broadcaster recently but I was not compensated. I was informed that Georgian Public Broadcaster does not cooperate with the copyright association”.

Irakli Dateshidze, Director of Radio Dardimandi said that he is not happy with the license fees.
“The fee is too high in relation to our income. Those radio companies which have small budgets will suffer greatly. I do not know how transparent the spending of the collected money will be; what sum will actually be given to the authors,” Dateshidze complained. 

Radio Dardimandi has been on air since May 1, 2011.

“GCA transferred around 105,000 GEL to copyright holders during seven months of 2011. Out of the total volume around 32,000 GEL was transferred to foreign authors,” said Kobaladze.

“The offer which we received from the Copyright Association is not acceptable for me. At first I was told that individual meetings would be held but later all radio companies were sent the same price lists. It is not fair that all radio companies are charged equally. The fee is not high enough. But its calculation needs to be revised,” said Nino Kvariani, Director at Radio Center Plus (Radio Palitra).

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“The sum which we distribute among copyright holders is transparent. Distrust was a big problem. In total there are around 1,300-1,400 copyright holders whom we pay a sum to. Out of them only 600 are our members. We gave all our members the opportunity to control all their finances online. We created special software on our website. Our members can log in via a unique code. This whole system is very transparent. In this way we have managed to avoid any doubts regarding the finances,” explained Kobaladze, from the Copyright Association. 

“Having doubts about the transparency of finances is logical. We have to pay for playing music by foreign artists, but how they receive the sum is unknown. I welcome the initiative but the mechanism should be improved,” Kvariani added.   

Nikoloz Tsertsvadze, Director of Georgian Public Radio, thinks that this mechanism should have been regulated a long time ago.

“There are lots of record studios and authors whose rights have been ignored. This will encourage the rehabilitation of showbiz in Georgia. The same system exists in every country.  Commercial radios want to air music without charges and accordingly they object to this decision. A new album costs a lot of money. If someone simply copies it and later earns lots of money from that it is not fair. If steps are not be made to solve this problem, then neither authors nor performers will be motivated,” Tsertsvadze told.

He said that if he had a record studio he really would not like to work under such illegality.

Temo Kacharava, Director General at Radio Beat FM, believes the charges are too low.

“Creating an individual format was a huge problem in Georgian FM radio stations. I would be grateful if this problem were settled. We created an individual radio format which was later copied by other radio companies. That is the reason why we welcome the recent decision of the Association,” Kacharava explained. 

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“I will keep the exact sum that we will be paying monthly for the licenses confidential, but the figures will be over 500 GEL or sometimes less, depending on the playlist,” Kacharava said.

The law on Copyright and Neighbouring Rights existed in Georgia from 1999. The status of GCA is defined in this law. “Up to May 11, 2011 because of several subjective and objective reasons the Association did not handle its function effectively. In May 2011 the management team of the Copyright Association was replaced. We decided to manage it in accordance with modern standards. We implemented the principle of collective management, which works successfully in the civilized world,” Kobaladze said.

“There are over 30 radio stations in Tbilisi. We had dealings with and settled agreements with around 17 radio companies. They are broadcasting with our licenses now as a result. They are paying a stated fee which we later distribute among the authors. We plan to assimilate all the rest of the radio stations in a maximum one-month period. Only 27 licenses have been issued by our association before May 2011 and since May 11, 2011 to December 31, 2011 – 279. We have been covering all the different segments of customers”.

Radio companies are paying charges every month. They are obligated to provide the Association with playlists once every six months.

Those in the HORECA sector are charged approximately 186 GEL monthly. They have to pay an additional fee if they offer live music and karaoke.

““We are partners and negotiate with 154 countries’ copyright associations. We carry bilateral obligations at both ends. In the Georgian territory we are protecting more than 3 million copyright holders’ rights in this way”. 

According to him, money earned by copyright use abroad is transferred to Georgian authors from the USA, Japan, Russia and other European Countries.

“Georgian folk music and choreography is very popular in Japan. The honoraria which we transfer to foreign holders are less than what we get from them. In Georgia the copyright tariffs are three times lower than in the USA and Europe,” Kobaladze said.



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