Rights Without Borders

Last week we followed a single stream from a listener in Hamburg to a songwriter's bank account, and found it splitting into multiple royalty chains before it had travelled anywhere at all. There was one element we touched upon, but only at a high level: why the same song, streamed in the same place, can be processed through entirely different machinery depending on who wrote it.

Photo by Annie Spratt

A song, for licensing purposes, effectively carries a sort of ‘nationality’. Not the writer's passport, and not the listener's location- something stranger and more consequential than either that determines who is allowed to license the work, and how much of each stream ends up travelling down which royalty pipe.

It is probably the most misunderstood thing in music publishing, including by people who work in it- so it’s worth taking time to take it apart.

Two Traditions

The world's societies split into two broad traditions, and the distinction that matters is not where they’re based, but what they control.

In much of continental Europe and beyond there is the BIEM world- 59 societies who typically administer both performing and mechanical rights for their members. The critical detail is that they do so by assignment, rather than mandate. The society effectively owns the mechanical rights in the repertoire given them by the writer, and will typically not give permission for another party to administer them.

A publisher who wants those rights licensed elsewhere therefore cannot simply appoint someone- they have to withdraw rights. That is possible at some major European societies (SACEM, SUISA, BUMA STEMRA and SIAE all operate opt-out mechanisms), but it is a formal process, bound by notice periods, often only effective at the end of a calendar year, and sometimes even subject to board approval. It is not impossible- but it is (deliberately) slow.

Then there is ‘qualifying' repertoire, more commonly called Anglo-American. Here the mechanical rights are merely administered by the society from the writer, allowing control by their publisher- which is precisely why they can be easily pulled out and licensed directly. It is exactly what the majors did to secure bespoke DSP deals: withdraw their qualifying repertoire and negotiate service by service, and in doing so opened a licensing advantage that the rest of the market spent a decade catching up with. It’s worth noting that savvy independent publishers also saw the writing on the wall, clubbed together and did similar- as in the case of IMPEL, who withdrew from MCPS and chose to license via SACEM.

Anglo-American Is Not a Geography

‘Anglo-American' sounds like it means US and the UK writers only- but it is wider than this. It is a repertoire class defined by the writer's PRO membership- repertoire represented by the likes of ABRAMUS, ACUM, APRA, ASCAP, BMI, GMR, IMRO, MESAM, PRS, SAMRO, SESAC and SOCAN. Brazil, Israel, Australia, New Zealand, Ireland, Turkey, South Africa and Canada are all inside it.

The key to remember is this ‘class’ travels with the song. A PRS writer's work remains qualifying repertoire when it is streamed in Stockholm. A STIM writer's work remains BIEM when it is streamed in London. The listener's location does not change the class; the writer's society does.

Which is why two songs on the same playlist, streamed by the same person, in the same second, can be licensed by different entities under different terms and arrive months apart. In fact… the same song, streamed by the same person in the same second can be licensed by different entities under different terms, because a BIEM-affiliated writer can co-write with an A-A affiliated writer.

My favourite example of this is ABBA (... yes, I’m a bit of a fan). Björn is a PRS/A-A writer, Benny is a STIM/BIEM writer. Both are signed to UMPG, but each of their portions are licensed and paid through entirely different mechanisms (and, in all likelihood, equating to different amounts). ABBA, streamed in Germany, will pay Björn via SACEM, but Benny via GEMA. As we saw last week, the cleanliness of their repertoire metadata is more critical at different societies for each of them- despite writing the entire ABBA cannon together.

Where That Leaves the US and the UK

Both of the core ‘Anglo' territories have also been rewired in the last decade.

In the US, the Music Modernization Act rewrote the landscape somewhat: digital mechanicals now flow through the blanket licence administered by The MLC, while performing rights continue through ASCAP, BMI, SESAC et al. In the UK, performing rights sit with PRS and mechanicals with MCPS, jointly administered for digital under PRS for Music Alliance, with ICE doing the processing behind the scenes.

Meanwhile digital mechanical licensing in Europe has largely detached from the local-society model altogether. DSPs increasingly don't license territory by territory- they license repertoire, through hubs holding multi-territorial rights across a defined catalog. These arrive in roughly three flavours: joint society ventures (ICE, MINT), major-publisher arrangements (Universal with SACEM, Sony's SOLAR- itself processed through ICE), Indie-cohorts (such as IMPEL mentioned above, or ICE’s Core Collective) and publisher-owned societies (AMRA).

So, royalties for a German listener's stream don't simply go to the German society by right. The mechanical element flows to whichever hub holds the multi-territorial rights for that specific repertoire, while the performing element can still route through the local society under traditional reciprocal arrangements. As above, re: Benny and Björn.

Three Determinants, One Song

Put together, three separate factors decide what happens to your stream. The writer's society determines the repertoire class. The publisher determines the chain it travels down. The market where the stream occurred determines the rates and the split.

A reminder from last week- A UK stream of a UK writer's song splits roughly 25% to the writer's performing share, 25% to the publisher's performing share and 50% to the mechanical. The same writer, the same song, streamed in France splits 12.5% WSoP, 12.5% PPoP, 75% Mechanical. Same three minutes of music- materially different arithmetic.

None of which is visible from inside your own catalog system. Your database will tell you what you own, but it likely won’t tell you which of these routes the money is taking, which entity is doing the matching along the way, and hence which registrations actually need to be right.

Why It Matters Commercially

If you don't know your repertoire's class, you don't know who licenses it. If you don't know who licenses it, you don't know which hub is matching it. If you don't know which hub is matching it, you cannot know whether your data is right in the key places that determines whether you get paid or not.

Catalog owners routinely spend real money cleaning registrations at societies that handle a small fraction of their income, while the hub processing the bulk of it holds a version of their repertoire that is running under the radar. This is the predictable result of a fragmented industry where the route money takes is genuinely hard to see.

A song's nationality is not written on it. It is inherited from the writer, exercised by the publisher, and priced by the market- and knowing all three is the difference between meaningfully fixing data and just moving it around a spreadsheet for minimal return.

For those working across territories: how much of your repertoire's actual licensing route could you map today, without asking anyone?