A Newcomer’s Guide to the Music Business by Tito Adesanya

Author:Tito Adesanya
Language: eng
Format: epub
Publisher: Triple 7 Publishing

Chapter 9

Performing Rights Agencies

Any copyright holder whose songs are being sold, reproduced, broadcast, publicly played or publicly performed is entitled to royalties for the use of their music. Entities called performing rights agencies help collect the payments owed on behalf of copyright holders; they then dispense these payments to the copyright holders, while claiming a small commission fee for their services.

Different agencies exist in different countries, all operating in licensing music, collecting royalties and administering money to their members. In the UK, the two main agencies for songwriters, composers and publishers are the Performing Rights Society (PRS), and the Mechanical-Copyright Protection Society (MCPS). The two companies merged in 1997, but although now amalgamated, they still perform separate duties for their members.

The Mechanical-Copyright Protection Society pay royalties to composers, songwriters and music publishers who are members, whenever their copyrighted music is reproduced or sold. This includes the reproduction or sale of the music alone - such as CDs, downloads or ringtones - and also the reproduction or sale of products that use the music as a part of their soundtrack – for example, DVDs, computer games or karaoke products.

The royalty trail starts with the fact that any party who wishes to reproduce or sell music that is written, composed or published by an MCPS member must first obtain a mechanical license from the MCPS. For example, if someone wanted to record their own cover version of Sam Smith’s ‘Stay With Me’, and they intended to sell their own version, they would first require a mechanical license from the MCPS, because the song is registered with the agency. If they then pressed up 20,000 CDs of their version, they would have to pay a fee for the reproduction of the music (currently 8.5% of the dealer price per CD in the UK) - even if they don’t sell a single copy of their CD.

So let’s just say the licensee was going to sell each of the 20,000 CDs they have pressed up to retailers like HMV, Asda and Tesco for 50p - 20,000 CDs x 50p is £10,000, and 8.5% of £10,000 is £850. So whether the licensee sells 1 copy, or 20,000 copies of their version, the MCPS would collect £850 from them, and use this fee to pay the owners of the composition.

If the party that rerecorded Sam Smith’s song also went on to sell digital copies on iTunes, then iTunes would pay the MCPS the mechanical royalties owed from these digital sales (8% of the gross revenue per download in the UK), and the MCPS would pay the owners of the composition this fee as well. It must be remembered that, before the MCPS distribute its members’ royalties, they will first subtract a little commission fee for their services.

By and large, that is the operations of the MCPS taken care of, so let’s now move on and examine the other arm of the MCPS - PRS for music. PRS differs from the MCPS in that it licenses and collects

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