Collection societies
MCPS, PRS and PPL

Collecting music royalties

The fees due to music rights owners for public performances, broadcasts and copies of their work are collected by a number of organisations.

Here’s a diagram to recap on licenses, fees, royalties and payments.

This diagram doesn’t show licenses granted directly by record labels and publishers (e.g. master-use and sync licenses). Also, an artist can be their own label and publisher so these roles are not necessarily separate.

Royalty collection societies

These are the main UK music rights organisations—other organisations operate in other countries.

Fees marked as a percentage (%) are deducted by the collecting society as a commission on the royalties.

Fees charged for licenses vary. The MCPS royalty on CDs is currently 8.5% of PPD, the published price to dealers (wholesale price) or 6.5% of retail before VAT. Downloads and ringtones are charged at a different rate.

Royalty collection facts and figures

Here’s some information about membership, earnings and licenses from the royalty collection societies’ 2004 figures (apart from VPL which doesn’t make up-to-date figures readily available).

Collecting royalties for copying recordings

Mechanical royalties for duplicated recordings are collected, and paid to the owners of the song or music copyright. The amount charged for each duplication license is based on the value of the CD, DVD, download or other copies (see A note about the meaning of mechanicals).

The publishing royalty collection society for recordings and other mechanical copies in the UK is the Mechanical Copyright Protection Society, MCPS. They operate a number of licenses to collect royalties on commercially duplicated recordings and to allow large payers to settle by account. There’s also a license for duplicating your own copyrights royalty-free.

PPL collects royalties on behalf of the recording owners for recordings copied by businesses using music. These are generally intermediate copies (e.g. VT programming) for various kinds of performance rather than copies for sale. PPL call this dubbing.

Collecting royalties for public performances

Performance royalties are collected by performing rights organisations (PROs) and paid to performers or owners of public performance rights. The amount charged for each performance license is based on the size of the venue, broadcast advertising revenue, or some other indication of value. There are two performance royalty collection societies in the UK.

Performing rights organisations (PROs)

Performance rights are granted to venues, premises and broadcasters under blanket licenses. This means there are common terms and conditions for rights owners and license users.

Commercial music users pay license fees based on air-time or some other indicator agreed between collection societies and trade bodies. They don’t usually pay for the specific material they use. Details of artists, writers and performers (usage returns or cue sheets) are only kept by major venues or broadcasters. For example, restaurants using music pay annual licenses, and payments to writers and performers are based on statistics from the mainstream and sampling from particular sectors.

Performance royalty calculations

The distribution of royalty payments from collection societies to performance rights owners cannot be perfect. License fees from commercial music users are collected, pooled and shared among labels, publishers, writers and performers. The share-out formula is bound to underpay some and overpay others.

In the future there may be a comprehensive tracking system for all electronic media but some manual data collection will always be necessary. Fully electronic payment would reduce the cost of royalty administration and make a fairer distribution possible.

Black box—unclaimed royalties

Some collection societies also have a “black box” of unclaimed royalties which may be kept or given to other organisations (e.g. Musicians’ Union). This money is owed to writers, performers and labels who are named on royalty paperwork but can’t be traced. Unclaimed PPL royalties can be searched at PPL performers’ money (Royalties Reunited).

(Record labels and publishers also keep black box royalties for “lost” artists. There are details on the bigger company sites.)

Performing a self-written set

PRS Gigs and Clubs Scheme

Smaller music venues are rarely monitored by PRS so their license fees tend to be distributed to other writers. If you play smaller venues and write your own material you can use the PRS Gigs and Clubs Scheme to claim your royalties. Although the PRS page is for members only it’s quite easy to work out whether you’ll benefit from joining.

Small music venues pay a few thousand pounds a year in PRS license fees, and each evening is normally worth about £5 for the writers whose material is used (larger venues pay more). There is a one-off fee of £100 to join PRS as a writer member, so if you clock up 20 evenings or more with material you write you’ll cover your costs.

Like most other PRS transactions it’s complicated and some stamina will be needed to see it through, but it can be done and for many gigging musicians it can provide useful income. To claim your royalties you need to join PRS, register your compositions and notify your set-lists. (You will need to know venue addresses, postcodes, dates and codes for the material.)

The PRS Live Royalties MySpace page has contact information for claiming other live events and festival appearances.

If you don’t claim your royalties they will be paid to Robbie Williams.

PRS collection overheads

Where bigger artists perform their own material live the royalty collection process can be a problem.

1. The venue would deduct an amount to cover their PRS license.
2. PRS would collect the license fee and deduct their commission.
3. PRS would calculate the performers’ share of the license fee.
4. PRS would pay the publishers and performers the song royalties.
5. The publishers would pay the writer’s share on to the performers.
6. The royalties would be paid up to a year late, minus commission.

To reduce these overheads there are sometimes special payment arrangements for live performances by the writers at big venues.

Joining a royalty collection society

Individual collection society web sites give details of membership fees and how to join.

Some societies insist you qualify by having commercial material available, but don’t be put off if you genuinely have material in the pipeline. It’s their job to represent rights owners in the real world and their rules don’t override that responsibility. They can recover publishing royalties for a short period before your membership as long as your work was properly notified at the time.

The general rule is that a label should join PPL before releasing material. Performers’ PPL can then be held for any performers who can’t be traced (see Black box royalties) until they get a PID. Publishing royalties may also be distributed retrospectively depending on the circumstances and the delay in claiming.

Notifying royalty collection societies

Collection societies have to be told the names and details of members’ recordings and compositions. This information is combined with usage returns (cue sheets, set lists, etc.) from music licensees to calculate the royalties due.

These are the main notifications, permissions and licenses. Commercial users (and certain others) must get permission from the relevant societies, the label and the publisher unless the material is available under a blanket license.

An independent artist who writes, performs and records all their material:

• would not join MCPS to collect mechanical royalties unless the recordings were licensed for duplication independently by a third party;
• may join PRS to collect the publisher’s and writer’s performance royalties from venues and media;
• may join PPL to collect recording owner and performer royalties from venues and media.

If you’re acting as a record label you should join PPL before you release any recordings.

When you release a record you also need to notify the societies of your interest in potential royalties and also provide information so that other contributors can be paid. For example:

• MCPS must be notified if you copy recordings of works owned by other writers or publishers (you’ll have to pay for these);
• PRS must be notified of any recorded works for which you claim performance royalties as a writer or publisher;
• PPL must be notified of any recordings for which you claim performance royalties as a recording owner (the label must be a member to allow claims for its recordings or performers);
• PPL must be notified of any recordings for which you claim performance royalties as a performer (track IDs and Performer Identification Numbers);
• PPL must be notified of any recordings where others claim performance royalties (track IDs and Performer Identification Numbers).

The BPI CatCo and AIM aimlabeldata systems handle PPL and OCC notifications electronically.

The main form for MCPS/PRS is the Joint Notification (Works) Form, JNWF, and you can also register your works before or after publication online.

If your CD uses any external writer, publisher, record label and performer rights, you’ll need to notify collection societies and pay royalties as agreed under your clearances for the different works, recordings and performances. You may also need to keep some paperwork as proof (e.g. for PPL).

Do I need to join a collection society?

Membership isn’t always necessary and can be a problem in some situations.

There are three main things to consider when deciding which, if any, collection societies to join. Do you expect to earn royalties? Do you need them collected? Is it worth collecting them?

The same applies to any other musical compositions, and any other public performances, not just the examples here. Publishing and performance royalties may also be due from sheet music, video and film soundtracks, and other uses.

Reasons not to join a collection society

Even if you expect to earn royalties, there are reasons not to join one or more of the societies. For example:

• PPL charges DJs for keeping members’ tracks on their computers and MP3 players, whereas non-members tracks could be free;
• The PPL digital copy license could be applied to anyone copying tracks, not just DJs, there are no written rules limiting this license;
• MCPS and PRS charge web sites for streaming their members’ tracks;
• The MCPS and PRS online license could be applied to your own web site and non-music revenue, there are no written rules limiting this license;
• PRS doesn’t allow material to opted out, so they will always charge for its use and you must sign up for their blanket terms and conditions;
• blanket license terms may not give you the control over your material that you want;
• you may not want to be associated with heavy-handed enforcement of copyright by trade bodies;
• you may choose to join different societies in different territories.

Collection societies work well for conventional writers and performers who have:

• regular appearances in big venues and national media;
• mainstream licensing or distribution;
• high volume third party duplication or performances.

Indie artists are likely to want their material circulated and performed more freely in clubs and online, and often depend on users who can’t afford heavyweight licenses. In some cases, especially online, they rely on non-commercial distribution where licenses will never be viable. These artists might put off joining a collection society until the benefits outweigh the disadvantages.

Collection societies in the rest of the world

There are different models for royalty collection in different countries. In some countries mechanical and performing rights are administered jointly. SACEM (France), SABAM (Belgium), GEMA (Germany) and JASRAC (Japan) work that way.

The same rights are often administered separately by several societies in a particular country (although each member would only join one society in each territory). SESAC, BMI and ASCAP are all performing rights organisations in the USA.

Music rights are based on national law but the EU recognises the problem of too many middle men, and too little competition. Efforts are underway to integrate EU licensing and unified schemes have been introduced for some digital media (e.g. broadcasting). But generally speaking a rights owner still has to deal with a society in each country (directly or indirectly) and users have to license music on a country by country basis.

International music royalty collection

Members of UK societies have some choice about whether they are represented throughout the world or only specified territories. They can then choose other societies in countries where they are not represented from the UK.

Normally each:

• writer can only be represented by one society in each territory;
• recording can only be represented by one society in each territory;
• composition can only be represented by one publisher in each territory.

Different countries have different:

• royalty distribution frequency—annual, quarterly, etc.;
• degrees of compliance with International agreements;
• national licensing agencies in various combinations;
• licenses for musical applications (based on International agreements);
• fees for music licenses and different deductions by local agencies;
• tax arrangements for local and foreign agents.

Some countries (Spain and Japan for example) have withheld a percentage of royalties paid to foreign agents.

A society member in a foreign country can collect worldwide royalties through:

• their local collection societies;
• their local labels and publishers;
• foreign sub-offices of their labels and publishers;
• sub-publishers and licensees in foreign countries.

There is no single “best way” to arrange global royalty collection. Each case depends on how a particular artist, label or publisher is represented worldwide. It often pays to audit foreign royalty collection even when a society or sub-publisher is supposed to be doing the job.

The main national collection societies

Here are some of the main royalty societies in the rest of the world (India, China, Indonesia and Brazil are also significant markets but not so well administered). There is some overlap between the roles in different countries so these definitions are approximate. There is also different national law, for example countries with media or player levies allocate societies to distribute them.

Country	Performing rights	Mechanical rights	Phonographic or neighbouring rights
Australia	APRA	AMCOS	PPCA
Belgium	SABAM	SABAM	URADEX
Canada	SOCAN	CMRRA, SODRAC, AVLA	NRCC/SCGDV
Denmark	KODA	NCB	GRAMEX
Finland	TEOSTO	NCB	GRAMEX
France	SACEM, SACD	SACEM	ADAMI
Germany	GEMA	GEMA	GVL
Holland	BUMA, CEDAR	STEMRA	SENA, NORMA
Iceland	STEF	NCB	SHF
Ireland	IMRO	PPI	RAAP
Italy	SIAE	SCF	IMAIE
Japan	JASRAC	JASRAC	Geidankyo/CPRA RIAJ
Norway	TONO	NCB	GRAMO
Portugal	SPA		GDA
South Africa	SAMRO	SARRAL	—
Spain	SGAE		AIE
Sweden	STIM	NCB	SAMI
Switzerland	SUISA	SUISA	SWISSPERFORM
UK	PRS	MCPS	PPL
USA	ASCAP, BMI, SESAC	HFA (Harry Fox Agency)	Sound Exchange (online only) AARC

Some of the national societies are members of different international organisations and groups, for example:

• AEPO-ARTIS is a group of performers’ rights societies.
• BIEM is a reciprocal group of mechanical collection societies.
• NCB is a group of mechanical collection societies in Nordic and Baltic countries.
• IFFRO is an international reproduction rights group that represents some mechanicals.

I don’t know a single list of all the royalty collecting societies in the world but these sites are useful: Dan Meyer and David Knopfler. Some of these societies and other organisations have useful links pages too.

The music organisations links page has more UK and international bodies.