Defining Pay Sources: CMO vs PRO

Between PROs, IPIs, and ISRCs, you’re probably feeling a little fatigued by all the acronyms in music publishing at this point. The following article should help provide some clarity on the key organizations responsible for licensing, monitoring and collecting royalties on behalf of rights holders and songwriters. Let’s dig in…

What Is a Pay Source?

A “pay source” refers to the collection societies, Digital Service Providers (DSPs), and various organizations responsible for paying royalties to songwriters and rights holders.

What Is a PRO in Music? 

One pay source you’ve probably heard of before is Performing Rights Organizations, or PROs. Their main purpose is tracking and collecting the performance royalties that are earned whenever your song is publicly performed or streamed. PROs do not license and collect the mechanical royalties that are earned when your song is reproduced physically or digitally. 

Major PROs in North America include ASCAP, BMI, SESAC, and SOCAN. Examples of PROs outside of the U.S. include AKM (Austria), KODA (Denmark), and PRS (UK). 

What Is a CMO in Music?

CMO stands for Collective Management Organization, a collection society that enables copyright owners and administrators to collect royalties generated by several types of use. Unlike PROs, which track and collect only performance royalties, CMOs collect both performance and mechanical royalties.

To be classed as a CMO, an organization must fulfill five criteria:

• Owned and operated 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). 

There are also companies and organizations that don’t fit under the CMO bracket (as they do not fulfill the criteria above) but still collect both performance and mechanical royalties. We refer to these as Rights Administrator Entities (RAE). A few examples of RAEs are ICE and Music Reports (MRI). 

Who Is Responsible for Collecting My Mechanical Royalties?

If I’m with a PRO who is only collecting my performance royalties, then who is responsible for my mechanical royalties? Good question. If you are with a PRO, that means you need to look to a Mechanical Rights Organization, or MRO, like The Mechanical License Collective (The MLC). These organizations administer mechanical licenses and assist in the collection of mechanical royalties. (If you’re affiliated with a CMO, they collect both your performance and mechanical royalties already.) 

A few other examples of MROs include AMCOS (Australia), CAPASSO (South Africa), the Harry Fox Agency (US), and MCPS (UK). 

Why Do I Need a Publisher if I Have a Pro or CMO?

Think of it this way: There are currently 195 countries in the world, and many 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.

The landscape of copyright licensing and royalty collection is vast and complex, too. Many pay sources are spread across hundreds of countries, who work under their own copyright laws. The different types of global organizations we’ve mentioned help copyright holders collect the royalties they’ve earned and deserve.

But having so many organizations can make a complicated situation even more confusing. It’s a common misconception among songwriters that once they’re members of a collection society, they’re fully covered for the collection of all their publishing royalties — performance and mechanical. 

But that’s not always true. 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.

Knowing 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 turn to publishers, or publishing administrators like Songtrust, for help.

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