Defining Pay Sources: The Difference Between a PRO and  CMO

Let me guess: As you’ve been educating yourself on the ins and outs of music publishing and how to position yourself to collect all of your royalties, you’ve probably been a little fatigued by all the acronyms. We get it: Between PROs, IPIs, and ISRCs, they really can seem never-ending. So let us provide some clarity on a few very important organizations responsible for licensing, monitoring and collecting royalties on behalf of rights holders and songwriters, aka you. 

Let’s continue with the assumption that you know only a little about the various pay sources or collection societies around the world -- that way we can introduce you to all of them in the same way. 

What exactly is a Pay Source?

At their core, pay sources, which include various collection societies, digital streaming providers (DSPs), and other types of organization, pay royalties earned for the use of a song to the songwriters or rights holders of that song. ‘Pay Source’ is a general term we use to reference all of the acronyms and organizations we’ll be explaining, and, in fact, there are quite a few names they go by.

Defining PROs and CMOs

One that you may have heard of before is a Performing Rights Organization, or PRO. A PRO focuses, generally, on the tracking and collection of performance royalties, or royalties earned whenever your song is publicly performed or streamed. PROs do not license and collect mechanical royalties, or royalties earned when your song is reproduced (think CDs, DVDs, and records) and/or streamed. In North America, the major PROs include ASCAP, BMI, GMR, SESAC, and SOCAN. Examples of PROs outside of the US include AKM (Austria), KODA (Denmark), and PRS (UK).

What is a PRO2 (1)

 

But here’s something important to understand: A PRO is just a type of CMO. 

Okay, so what exactly is a CMO? “CMO” stands for Collective Management Organization, collection societies that enable copyright owners and administrators to efficiently and cost-effectively collect royalties generated by many types of use. This means that instead of only tracking and collecting performance royalties like a PRO would, these collect mechanical royalties as well. To be classed as a CMO, an organization must fulfill 5 criteria:

  • Owned & controlled by the creators it represents
  • Open to all creators in rights category represented
  • Conduct its business in a non-discriminatory manner
  • Represent a broad range of exploitations/usages
  • Authorized by law to operate as a CMO where applicable

A few examples of CMOs include ABRAMUS (Brazil), GEMA (Germany), SACEM (France), and SUISA (Switzerland). 

What is a CMO 19201080

 

Let’s make this a bit more complicated, shall we? There are also companies and organizations that don’t fit under the CMO bracket but that still collect both performance and mechanical royalties. We like to refer to these as Rights Administrator Entities (RAE). Examples of RAEs would include ICE and MusicReports (MRI). 

Pay Source Map...and many more.

You might then be asking yourself, if I’m with a PRO, who is collecting my performance royalties, then who is responsible for my mechanical royalties? 

Good question. If your collection society doesn’t actively collect your mechanical royalties, then a Mechanical Rights Organization (MRO) would take on that responsibility. These organizations exclusively administer mechanical licenses and assist in the collection of your mechanical royalties. A few examples of MROs include AMCOS (Australia), CAPASSO (South Africa), Harry Fox Agency (US), and MCPS (UK). 

That’s a lot of information. Do I have to know these all?

The landscape of copyright licensing and royalty collection is vast and complex; there are many pay sources across hundreds of countries, all working under their own copyright laws. The different types of global organizations we’ve mentioned better help the process of effectively connecting copyright holders to their royalties.

But having so many organizations can also make an already-complicated situation even more confusing, if you’re not paying attention. It’s a common misconception among songwriters that once they’re members of a collection society, that they’re fully covered for the collection of all of their publishing royalties, performance AND mechanical. Unfortunately, that’s not always true, as you’ve probably already gathered. For one thing, in many territories—including North America—there are no unified performance-and-mechanical collection societies, or CMOs. For another, the worldwide CMOs may not be linked to one another.

Think of it this way: There are currently 195 countries in the world, and many may have at least one, if not several pay sources. If your music is being used in any of those territories, you’d need to register your songs (and yourself as a songwriter!) with each of those pay sources or collection societies to be sure you’re collecting all the royalties you’re due.

Knowing that there are so many pay sources is the first step. Then imagine how much time and energy it would take for you to affiliate as a member and register your songs to each and every one of them. That’s why so many songwriters and music creators are turning to publishers or publishing administrators, like Songtrust, for help.

Because of Songtrust’s worldwide reach, we’re able to register your work for you all over the globe, not just in North America and Europe. And because it’s becoming increasingly common for music to be played and shared worldwide, these are vital royalties you absolutely cannot be missing out on.

If you have any questions about how CMOs, PROs, and any other types of pay sources, don’t hesitate to ask for guidance. We’re here to help.

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