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MCPS seeks pitches to run its operations, could end long-term alliance with PRS
By Chris Cooke | Published on Tuesday 5 April 2016
The Mechanical Copyright Protection Society – or MCPS to its closest friends – is inviting third parties to pitch to administer certain aspects of the collecting society’s business, including all back-office operations. Which is interesting, because the result of this process could be a significant revamp of the organisation’s long standing alliance with fellow song rights organisation PRS, or the Performing Right Society to its best pals.
The music publishing sector routinely licenses the mechanical rights in songs separately from the performing rights, and in some countries – like the UK – separate societies were set up to separately handle the collective licensing of the two elements of the song copyright. MCPS is mechanicals, PRS the performing rights.
However, in countries where this set up exists, it is common for the two societies – both of which will have a lot of publisher members and repertoire in common – to work closely together. Even more so since the rise of digital, because download stores and streaming platforms exploit both the mechanical and performing rights at the same time, meaning an ever increasing number of licensees need combined licences.
In the UK, the formal MCPS-PRS Alliance kicked off in 1997, and ultimately resulted in the creation of PRS For Music, a joint venture business that did the deal making, database management and royalty distribution on behalf of both societies. But in 2013, as part of moves to restructure its financial liabilities, MCPS sold its share in the PRS For Music venture to PRS, thus becoming a client of rather than a shareholder in the organisation that actually does the deals, data and distribution.
The current deal between MCPS and PRS For Music seemingly concludes at the end of the year, hence the decision now to consider other options. When it comes to the deal making, it seems like MCPS could actually take some of that back in-house, though the society – which is subsidiary of the Music Publishers Association – is keen to stress that it has no ambitions to build its own “pipes and machines”, which is to say it will continue to outsource the heavy lifting and tedious administration, it’s just that work doesn’t have to go to the PRS.
Expressions of interest have already been made regarding taking on some of MCPS’s heavy lifting, though – realistically – a relatively small number of companies would be sufficiently equipped to take on such task. The most obvious contenders are the privately owned collecting societies like AMRA and SESAC.
The former has had a significant facelift since being acquired by Kobalt last year, of course, though – despite its new owner being keen to stress that AMRA is entirely independent from its parent company – some key MCPS members will see Kobalt as a significant competitor, and may be uneasy about its collecting society administrating their rights.
SESAC, although traditionally a performing rather than mechanical rights organisation, did buy the Harry Fox Agency, America’s main mechanical rights set-up, last year. And while HFA is arguably at least partly to blame for the monumental fuck-up around mechanical royalties in the streaming domain Stateside, word has it that SESAC has been doing a pretty good job of overhauling the mechanical rights agency since taking it over.
All that said, it could well be that the outcome of this review process is that PRS For Music remains the primary service provider to MCPS. Though the latter might hope that the threat of losing the UK mechanicals business will force the former to up its game. PRS, meanwhile, might hope that, with initiatives like the big pan-European ICE venture, it is already upping its game. It will be interesting to see if MCPS’s publisher members agree.
The review could also initiate the further evolution of IMPEL, the sister organisation to MCPS which specifically represents the digital rights of a consortium of indie publishers.
Whereas MCPS has traditionally allowed PRS to represent its mechanical rights when dealing with digital services, the big five publishers – so Sony/ATV, Universal, Warner/Chappell, BMG and Kobalt – do it the other way round, in that PRS allows them to represent the performing rights the society controls when negotiating digital agreements.
You sense that IMPEL – which has the makings of a “Merlin for publishing” – could seek to do more deal making itself in the future, and this review could facilitate that process.
For the time being, MPA and MCPS chief Jane Dyball is keeping her options open, saying that now is the time to review the mechanical society’s options in an ever-changing marketplace to assess the best ways to deliver value to her publisher members, while also seeking to make the licensing process as easy as possible for licensees, especially if and when simpler licensing processes can open up previously under-exploited revenue streams for song owners.
Dyball said yesterday: “Having weathered some fairly difficult years and fast-tracked achievement of our most recent business plan, MCPS is now at a major turning point in its history. We are a company with a £140 million annual turnover but which has decided that we are not in the business of building pipes and machines”.
Which means, Dyball continues, “it is essential that we find the best back-office solution via a competitive tender so that we can be more responsive to the needs of our members and our customers. This will allow the management team to focus our attention on growing our revenues. The board has a firm belief that the mechanical right is an essential right for every music-related business. By licensing at appropriate value, and making it easy for licensees to buy our members’ rights, we are convinced that growth is not only possible but inevitable”.
The ‘request for proposals’ period will run until 30 Jun, and those interested in proposing should contact tom.fletcher@mpagroup.com.
