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SoundExchange buys Canadian mechanical rights society

By | Published on Tuesday 16 May 2017


The American record industry’s collecting society SoundExchange yesterday announced it had acquired Canadian mechanical rights society CMRRA in what the former is calling “a dramatic development for the global music industry”. And who doesn’t like a bit of drama?

SoundExchange is the closest the US record industry has to an organisation like PPL in the UK, collecting royalties for artists and record labels when their performing rights are exploited. Though American copyright law only provides a digital performing right for sound recordings – rather than the wider general performing right found elsewhere – meaning SoundExchange only collects royalties from online and satellite radio services.

CMRRA, meanwhile, represents the mechanical rights in songs on behalf of Canadian music publishers, making it akin to the UK’s MCPS. It claims to “represent the vast majority of musical works licensed in Canada and has assembled a large and comprehensive database that associates musical works to sound recordings”.

Whatever you think about the claims of “drama”, it is definitely an interesting deal. Aside from the fact that it allies two societies based in different countries, it also brings into common ownership agencies respectively representing the two different sets of music rights – ie the recording rights and the song rights – albeit the performing rights in the former and the mechanical rights in the latter.

SoundExchange says that the deal will provide it with “a unique opportunity to offer a broad and comprehensive range of services to rights holders in both sound recordings and music publishing and music users alike across North America”. While the two organisations plan to continue operating autonomously from each other, yesterday’s deal will, it says, allow the two organisations to “integrate and streamline the administration and distribution of sound recording and music publishing royalties”.

Commenting on the acquisition, SoundExchange CEO Michael Huppe said: “We are proud to join forces with CMRRA. We have a simple, yet ambitious goal: to maximise the value of music for all creators – for musical works and recordings alike – wherever their work is used. The acquisition of CMRRA helps us increase efficiencies while also extending service to the publishing sector. This exciting partnership builds on CMRRA’s great relationships with music publishers and licensees, its long record of accomplishment and its stellar reputation”.

Meanwhile the current Chair of the CMRRA board, Sony/ATV’s Gary Furniss, added: “The board initiated its search for a strategic partner for CMRRA nearly a year ago. The board was committed to finding a firm with the right mix of music industry know-how and a culture of digital entrepreneurship. SoundExchange fit the bill. Additionally, the opportunity for data collaboration will inevitably increase the speed, efficiency and accuracy of royalty payments for everyone”.

The SoundExchange/CMRRA deal follows other moves to bring together collecting societies representing different kinds of music rights, though those have mainly been about allying organisations that represent the two different elements of the song copyright, ie the performing rights (when songs are performed or communicated) and the mechanical rights (when songs are reproduced and distributed).

In 2015, American performing rights organisation SESAC bought US mechanical rights company The Harry Fox Agency. Meanwhile back in Canada, last month the country’s performing rights society SOCAN announced it was in “active and positive merger discussions” with the other Canadian mechanical rights society SODRAC, which is more focused on the Francophone repertoire. Yesterday SOCAN said it wished CMRRA “only the best with its new owner”.

In the UK, of course, performing rights society PRS and mechanical rights society MCPS have long worked hand-in-hand, via an alliance, then a joint venture, and more recently with MCPS being a client of PRS. Though that arrangement is currently under review.