Ultimate Guide to Collection Organisations: CMO, PRO, MRO, NRO, RAE and Publishing Administrator

Are you lost in a sea of acronyms when it comes to understanding music publishing? Don't worry, I’m here to provide you with a clear and concise breakdown of the key organizations responsible for licensing, monitoring, and collecting royalties on behalf of rights holders and songwriters. Let's dive right in!

Understanding Collection Organisations and Societies

A "collection organization" or "collection society" refers to the entities responsible for collecting and distributing royalties to songwriters and rights holders. That is everyone who worked and performed the song (singers, rappers, composers, lyricists etc).

Remember, these royalties are generated from the composition copyright and master recording copyright of the song. Learn more about copyrights and their royalties here (Ultimate Guide to Understanding Song Copyrights and Royalties)

There are several different organizations around the world which collect different types of royalties. That means the artist must be registered with all of these organizations and register their songs on every release. Here you tell the organizations of all the songwriters of the song and their respective ownership of the copyright by stating their percentage of Writer’s Share and Publisher’s Share.

Let's list all of the organization types and their purpose.

Collective Management Organizations (CMO)

Collective Management Organization (CMO), plays a crucial role in collecting both performance and mechanical royalties. Unlike PRO collecting performance royalties only and MRO collecting mechanical royalties only. To be recognized as a CMO, an organization must meet five criteria:

1. Owned and operated by the creators they represent

2. Open to all creators in the represented rights category

3. Non-discriminatory in business practices

4. Represent a broad range of exploitations/usages

5. Authorized by law to operate as a CMO

Examples of CMOs are PRS for Music in the United Kingdom, ABRAMUS in Brazil, GEMA in Germany, SACEM in France and SUISA in Switzerland.

Performing Rights Organization (PRO)

Performing Rights Organization (PRO) has the role of tracking and collecting performance royalties only. These royalties are generated whenever your music is publicly performed or streamed online.

Major PROs in North America include ASCAP, BMI, SESAC, and SOCAN, while outside America there is PRS in the United Kingdom (under PRS for Music), KODA in Denmark, IPRS in India and the list goes on.

Mechanical Rights Organizations (MRO)

If your Performing Rights Organization handles only performance royalties, then Mechanical Rights Organization (MRO) handles mechanical royalties only. These royalties are generated from physical or digital reproductions such as production of CD/vinyl and digital downloads.

Well known MROs in the United States are Harry Fox Agency (HFA) and The Mechanical Licensing Collective (The MLC). Other countries have different MRO such as MCPS in the United Kingdom (under PRS for Music) and AMCOS in Australia.

Neighboring Rights Organizations (NRO)

Neighboring Rights Organization (NRO) collects neighboring royalties which are generated from neighboring rights. Neighboring rights royalties' income is derived from terrestrial (broadcast) sources, online platforms (like Pandora), satellite radio (such as SirusXM), cable TV channels, establishments incorporating ambient music (such as restaurants, hotels, and stores), live performance venues, and a range of digital media platforms.

Couple of examples of NROs are Phonographic Performance Limited (PPL) in the United Kingdom and ERATO in Greece.

SoundExchange

While the United States does not acknowledge neighboring rights, it does pay the performers on digital platforms such as Pandora or SiriusXM. These payments are referred to as digital performance royalties, and they are accrued from non-interactive digital radio streaming services like Pandora and iHeartRadio. SoundExchange collects and distributes digital performance royalties to the rightful artists and rights owners.

Rights Administrator Entity (RAE)

Rights Administrator Entity (RAE) are entities that collect both performance and mechanical royalties but do not meet the five CMO criteria. An example of RAE is Music Reports (MRI).

The Role of Publishing Administrator

Managing global copyright licensing and royalty collection can be overwhelming. With numerous collection societies across different territories, songwriters might struggle to register their music and collect royalties individually. This is where Publishing Administrator step in. Publishing Administrator handle the administrative tasks of affiliating with various collection societies, ensuring that you're covered for both performance and mechanical royalties.

Key Takeaways

1. Various organizations exist for collecting different types of royalties. Collective Management, Performance, Mechanical, and Neighboring Organization, Rights Administrator Entity, and Publishing Administrator.

2. A Collective Management Organization (CMO) tracks and distributes both performance and mechanical royalties. To qualify as a CMO, it must meet five criteria.

3. A Performance Rights Organization (PRO) tracks performance royalties only

4. A Mechanical Rights Organization (MRO) tracks mechanical royalties only

5. A Neighboring Rights Organization (MRO) tracks neighboring royalties only

6. Publishing administrators simplify the process by affiliating with multiple collection organizations and societies around the world on behalf of songwriters

7. Rights Administrator Entity (RAE) track and pay out performance and mechanical royalties just like CMO but they are not classified as CMO because they do not meet the five criteria.

Understanding the roles of these organizations helps ensure you receive the royalties you deserve for your musical creations. Don't let the maze of acronyms discourage you. Come back to this post if you need to refresh your memory.