Friday, February 10, 2012

Canada’s rights societies start 'integration' talks

By Emmanuel Legrand

Canada’s three authors' rights societies -- CMRRA, SOCAN, and SODRAC – have announced on Feb. 9 plans to explore greater integration of their operations, a move that could eventually lead to the creation of one single authors’ society dealing with music repertoire for the country.

We are not there yet, as the diplomatic terms used for the occasion only mention that the three societies are at the stage of “exploring opportunities” in order to create more efficiency for their members (authors, composers and publishers). It is understood that the three societies will commission a feasibility study to determine in which ways their operations could be combined, with which benefits to their members, and at what cost.

According to a Canadian publisher, who is aware of the discussions that have been going on for a few months, the idea underneath the move is to cut costs at a time when mechanical and performing rights are under severe pressure, but also to make it easier to license content for digital usage. 

If implemented, the plan could lead to the replication of structures that already exist in many countries, especially in Europe, where mechanical and performing societies are integrated (MCPS with PRS for Music in the UK, or SDRM with SACEM in France). "We're not there yet," says a source close to the deal. "We are a long way before making a decision on what to do." The source adds that the objective is to make savings, reduce overhead and "do a better job for our members".

A publisher tells me that  that one of the options discussed would see data centralised within SOCAN on behalf of all three societies and with SOCAN charging admin costs to CMRRA and SODRAC. "At this stage, all options are explored," says the publisher.

The discussions will involve three societies that are facing different challenges. SOCAN, the Society of Composers, Authors and Music Publishers of Canada, is the biggest of the three societies, with revenues in excess of CA$275 million in 2010. SOCAN’s new CEO, Frenchman Eric Baptiste [disclosure: I worked with Baptiste when he was director general of Paris-based CISAC], has been looking at ways to increase efficiencies and create a society totally in synch with the requirements of the digital age.

CMRRA, the Canadian Musical Reproduction Rights Agency, collects mechanical rights on behalf of publishers and has seen its revenues eroded by the drop in physical sales, even if digital revenues have picked up in the past two years, mostly thanks to Apple's iTunes Music Store doing better than anticipated. CMRRA president, David Basskin, is very much focused on services to clients and could finds cost and service benefits for his members through a closer partnership with sister societies.

Meanwhile, SODRAC – the Society for Reproduction Rights of Authors, Composers and Publishers in Canada – is in charge of licensing and collecting the reproduction rights not only for music repertoire but also for visual arts. SODRAC’s general manager Alain Lauzon has been facing declining revenues and difficult market conditions in Quebec. The integration of SODRAC could be complicated by the fact that it represents not only music repertoire but also visual artists.

CMRRA and SODRAC are private and do not publish their yearly figures. In 2002, CMRRA and SODRAC created a joint venture, CSI, to offer digital services a one-stop-shop for mechanical licenses covering most of the world's repertoire.

The Canadian situation will most certainly be scrutinised South of the border, where there are three performing societies (BMI, ASCAP and SESAC) and one mechanical society (Harry Fox Agency, owned and managed by music publishers). The drop in mechanical income in the US could lead HFA to look for similar partnerships with sister organisations.

[The press release can be found here]

[Typed while listening to 'Creep On Creepin' On' by Timber Timbre who, quite appropriately, are Canadian, and definitely worth checking out.]

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