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What are Collective Management Organizations?

What are Collective Management Organizations?

We’ve been starting our series of articles to get back to basics on the Music Industry Essentials. Since we are dealing with music rights management daily, some questions might pop-up quite often. Today, we are answering a few of them, including "what on earth is a performance rights organization?” or “what are collective management organizations ?"

What Are Collective Management Organizations

Collective management organization (CMO) is a broad term that differs from country to country. Generally speaking, it’s an organization that deals with collecting rights from the associated copyright holders. A CMO has some other responsibilities as well. It’s able to act on behalf of its clients and enforce copyrighting rights. They can also monitor the use of the copyright granted, collect license fees and distribute royalties.

To clarify any misunderstandings, let’s go with two simple examples. In the first case, you’re a club owner and you want to play a song by a specific artist in your club. What you’ll need to do is get in touch with them or their designated collective management organization, if they have one. The next step is asking for suitable rights for copyright permission from the owner and pay if needed. That’s it.

In the second scenario, you’re an owner of a song and someone requests rights to play it somewhere publicly. You have two options, manage all the copyrighting rights permissions yourself or join a collective management organization that will do all the work for you. The CMO is usually the way to go if you have other things to deal with. 

Depending on where you come from, there may or may not be collective management organizations. If there aren’t you may find them under other names. In the US, the most common organizations dealing with rights are performance rights organizations (PRO).

What Are Performance Rights Organizations

PRO, otherwise known as performing rights organization, is an organization that works with songwriters and publishers to collect royalties from public performances. This includes showcasing on radio stations, TV, clubs, and other venues. The money goes only to the songwriters, lyricists, composers, and publishers. In case the performing artist is also a songwriter, then they’re also eligible for royalties.

Other than that, their functions remain similar to CMOs. They are also issuing licenses, monitoring issued licenses, enforcing any rights if needed to and collecting and distributing royalties. In rare cases, some also act as mechanical rights organizations (MRO) which means they collect mechanical royalties too. Mechanical royalties are royalties earned when someone makes a physical or digital copy of the owner’s song.

There are quite a few on the market, but BMI, ASCAP, SESAC, and SACEM are amongst the more popular ones.

  • BMI (short for Broadcast Music, Inc.) is a performance rights organization with headquarters in New York. Opened its doors in 1939, BMI’s repertoire now involves over 1.1 million songwriters and 17 million compositions. The songwriters, composers, and publishers on BMI come from all around the globe and represent artists such as Taylor Swift, Lady Gaga, and Lil Wayne. Today, BMI is the biggest performing right organization in the United States.
  • ASCAP (or American Society of Composers, Authors and Publishers) is a New York-based PRO that currently has over 800,000 songwriters, composers, and music publishers. It started working in the distant 1914 and nowadays licenses more than 16 million songs. Some of the artists ASCAP represents are Big Sean, Madonna, Mary J Blige, and Lionel Richie.
  • SESAC (Society of European Stage Authors and Composers) is a PRO, and ever since the acquisition of Harry Fox Agency in 2015, it’s also an MRO. At the moment, it’s licensing over 1 million songs on behalf of 30,000 songwriters, composers, and music publishers. You’ll find names such as Bob Dylan, Adele, R.E.M., and Paul Shaffer under SESAC.
  • SACEM (or Société des auteurs, compositeurs et éditeurs de musique) is a French CMO located in Neuilly-sur-Seine, France. It’s operating since the distant 1851 and now has over 175,000 global creators with a repertoire of 150 million works. David Guetta, Catherine Ringer, and Camille are some of the famous artists under SACEM.

CMOs and PROs Today

Since we cleared what is a performance rights organization, it’s of utmost importance to differentiate between a PRO and a CMO. 

The former is a subtype of the latter. CMOs cover licensing performance rights and mechanical rights and collecting royalties based on them. PROs only deal with performance rights and do not include mechanical rights as part of their working field. So, in case you’re wondering who will help with mechanical royalties if you’re only a member of a PRO, then you’ll need to join a MRO. 

In a fast-paced world where technology rules over everything, it’s important to carefully manage your work. Thanks to CMOs, PROs, and MROs you are never going to worry about the hassle of licensing and collecting royalties. It’s also good to mention that all the companies who deal with rights work differently, and thus choosing the one that suits you will lead to the most productive outcomes.

Managing rights can be a pretty hectic task, and get very time-consuming. Especially if you don’t have the right tools and reflexes. We get into the relations to build with CMOs in our newsletter this week (only one email a week). And if you’re willing to discover what Reprtoir can do for you with our Royalty Accounting Solution, book yourself a call with us!

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