A Collective Management Organisation (CMO) is a type of licensing body that grants rights on behalf of multiple rightholders through a single licence (or blanket licence) against a single payment. Generally speaking, rightholders will join a CMO as members and instruct it to license their rights on their behalf. The CMO charges a fee for the licence, from which it deducts an administrative charge before redistributing the remainder as royalties to the relevant rightholder. CMOs are typically not for profit organisations and are owned and controlled by their members, the rightholders.
The rationale behind the existence of CMOs is the same in all sectors. When it is impracticable or impossible for rightholders to manage their rights individually (imagine, with the boom of the internet and different platforms internationally, it can become overwhelming for one artist to manage who reproduces its music, where, how many times…), collective management is a feasible solution.
The European Union adopted in February 2014 the Directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014L0026
The CRM Directive aims to fulfil the following objectives:
- to modernise and improve CMO governance, financial management, and transparency; in particular, ensuring rightholders have more say in the decision-making process and receive royalty payments that are accurate and on time;
- to promote a level playing field for multi-territorial licensing of online music;
- to help create innovative and dynamic licensing structures that encourage the development of legitimate online music services.
You can find here an official list of all CMOs by Member State: https://ec.europa.eu/digital-single-market/en/news/publication-collective-management-organisations-competent%20authorities-collective-rights-management-directive
So, what can they do? In principle, a CMO can only manage the rights of those rightholders who have given it a mandate. Rights acquisition from authors and other rightholders is based on a mandate which can take many different forms, depending on the country. It is not mandatory to be part of a CMO. However, and taking Spain as an example, it is usual practice to automatically subscribe to the SGAE which will then automatically manage your rights and collect royalties.
The main function of a CMO is rights management, that is, to license the use of protected works on behalf of rightholders. Through licensing, CMOs offer legal access to copyright-protected works and make it easy for users to get the necessary permission from one single source. Rights management includes the following tasks:
- monitoring where, when, and by whom works are being used;
- negotiating tariffs and other conditions with users or their representatives;
- granting licences in return for appropriate remuneration and under sound conditions;
- collecting remuneration;
- distributing remuneration to rightholders.
Taking into account all the above, although a songwriter might allow you to use their song, this does not mean that such use will come for free, since CMOs are the ones managing the economic part of the rights and collecting royalties for such use. Said authorisation will protect you from any infringement claim, but will not prevent CMOs from collecting royalties. The only way to avoid this is to use copyright-free music, either because it is no longer protected by copyright or because the songs are shared under a Creative Commons licence and the author is not a member of any CMO.
We hope that you liked this month's article. If you have any additional questions, as usual, please do not hesitate to contact us.