The Professionals: MCPS
The Mechanical Copyright Protection Society
The second of an occasional series in which David Mellor takes a look at the organisations that help musicians and composers earn an honest crust in this hard world. This month: the Mechanical Copyright Protection Society.
Second in an occasional series in which David Mellor takes a look at the organisations that help musicians and composers earn an honest crust in this hard world. Anyone who earns money from recordings of their music has reason to thank the MCPS and sister organisation the Mechanical Rights Society. If you haven't thanked them personally yet, this is why you should...
In my previous article about the Performing Right Society (Sound On Sound March 1987) I explained in some detail the concept of copyright. To recap briefly, in any original creative work - such as a piece of music, a book or a magazine article - there exists a copyright which belongs to the author of the work from the moment of its creation. There is no need to apply for copyright or register it in any way except in order to protect your tune from being nicked, which is a rather different matter. In the case of a piece of music, you control from the outset the rights to produce the work in any material form, to publish the work, to perform the work in public, to have the work included in a cable programme or to make any adaptation of the work.
The right to control recordings of a piece of music is known as the Mechanical Right. If this seems a little 'Olde Worlde' it is because it first came into being in the Copyright Act of 1911. Perhaps some of you will remember that record players were completely mechanical devices then - electrical recording not coming along until 1920!
Copyright and mechanical rights may sound complicated but think of them as a car which you own. You say who can and cannot drive it, and you can choose to hire it out or sell it. Although copyright is not a tangible thing, it is just as real - particularly in a Court of Law if anyone should try to infringe it.
You could, if you wanted to, just sit on your rights and prevent anyone from performing or recording your work at all, but you would not make much money this way. For most of us this is a fairly important consideration! To exploit your composition, unless you want to 'go it alone' and do everything yourself, the best thing to do is to have your work published and assign both the performing and mechanical rights in the work to a publisher. This means that you are free to go on to create new works while the publisher has the slog of exploiting the ones you have composed already. He will want a piece of the action, of course, and this will vary from one third to one half of the total earnings, as far as most composers are concerned.
There are two main sources of income:
1. Payments for performances of the work, whether live or recorded.
2. Payments for recordings made of the work.
As I dealt with performance payments thoroughly in the last article (March 87), I would direct you to the Sound On Sound Back Issues Department if you have not read it.
Payments for recordings are in respect of the mechanical rights which you have assigned to the publisher. It is worth stressing at this point that there need be no recording made for mechanical rights to exist. They existed from the moment the work was complete. If a recording is made, then further rights will come into operation which I shall explain in a future article.
There are several ways money may be made from mechanical rights:
1. Making records, tapes or compact discs and selling them.
2. Having a work included in a film or TV production.
3. Use as background music in commercials.
4. Having a recording of the work used in theatrical production.
5. Having the work included in an audio-visual presentation.
I could go on but it is simpler to say that if your work is recorded in any way, shape or form, or a copy of that recording is made, then you or your publisher will be entitled to a payment.
Now you know what mechanical rights are, and that money can be made from them, it is time to find out how it is all done. As you can imagine, it is not a simple matter to collect money in respect of every record sold in this country or every copy of a recording made, but systems have evolved over the last seventy or so years which serve composers and publishers extremely well.
As I mentioned, the Copyright Act of 1911 established a number of rights, the mechanical right among them. The Mechanical Copyright Licences Company (sometimes abbreviated to MECOLICO) had already been set up in 1910 in anticipation of the Act, its purpose being to collect and distribute the mechanical royalties generated by the few early record companies. The Copyright Protection Society came about soon after this and a merger of the two in 1924 resulted in the Mechanical Copyright Protection Society (MCPS) as we know it.
There were other societies concerned with mechanical rights, particularly in film and radio, but the MCPS became a dominant force culminating in the absorption of BRITICO, the mechanical rights organisation representing many European societies, in the early 1980s. Since 1954, the Mechanical Rights Society (MRS) has handled matters of copyright policy and the negotiation of licensing agreements, the MCPS looking after the administration of these. In 1976 the Music Publishers Association took over the MCPS in whose hands it remains.
Way back in the dark days of 1911, when record companies and music publishers were thin on the ground, it was deemed necessary in the Copyright Act of that same year to make provision for the infant record companies to be able to have free access to publishers' works. I am sure you can see that this would be in breach of one of the provisions of copyright as we know it - namely that a composer should have the right to control recordings made of his works - but this was made a special case.
The way the system works is as follows. A composer (or his publisher) has the right to control the first recording. After that the Compulsory Licence comes into effect. This means that there can now be a free-for-all and anyone can have a go, as soon as the first one has been made commercially available. Most people would probably not think about it and just go ahead and make the recording, but this is a provision of good old British law.
The only thing to remember is that a royalty of 6.25% is payable on the retail price of the record (excluding VAT) at which it is normally sold, and this amount is then divided between the owners of all the copyright works on the record. A minimum royalty of 0.313 pence is payable in the case of a record which contains a large number of tracks. This rate was fixed in the Copyright Act of 1956.
This system has been in existence for so long now that most people accept it as fair and just. Most people that is except the music publishers! It could be said that the system is unfair, because copyright owners are able to control all other uses of their works. They can say "Yes, you can use my music in your film" or "No, I disagree with your film's subject matter so you can't use it." They can also say "Yes, you can use my music, but it is such good music that you will have to pay me a lot of money for it." These rights belong to the composer or publisher, but when a work has been recorded once, thereafter the publisher has no say over who can put a new version on record, unless it is a drastic rearrangement or parody. This is clearly unfair.
Most people in the music business can see that there is a lot of sense in this argument and the abolition of the Compulsory Licence has been mentioned in a recent government white paper on copyright. Its abolition would mean that anyone who wanted to make a cover version of any copyrighted song would have to apply for a licence to do so, and negotiate a fee or royalty. It would also mean that if Raving Sid and the Nasties wanted to record a song like 'Raindrops Keep Falling On My Head' then the song's publisher might well not let them.
When you have recorded your collection of cover versions and are about to go to the pressing stage, it is time for a little form filling. Details of each song's title, composer and publisher must be entered onto a form known as the Statutory Notice and sent to the MCPS. Other pieces of information such as your record's title and catalogue number must be included along with the number of copies to be made and the name of the pressing plant.
From this notice, and a knowledge of the planned retail price of the record, the MCPS can calculate the total royalty payable. Smaller record companies may find themselves in a position where they have to find all of the royalty payment up front before having sold any discs. Larger companies can agree to pay according to the number of sales made each quarter-year. It used to be that to show that the proper royalty payment had been made, the MCPS issued stamps - one to be stuck on each disc. Fortunately, it can usually be agreed that the record company will include the letters 'MCPS/BIEM' on the label together with the names of all copyright holders instead. The MCPS also control the importation of records from outside the EEC into this country, stamps being issued to show that the necessary clearances have been made and royalties paid.
That almost covers the business of commercial records apart from one point. Who checks that record companies are actually paying up as they should? What is to stop an unscrupulous company from pressing 5000 copies of a record containing your song, and only owning up to 2000? And who would be the loser? - You!
Fortunately, the MCPS maintains an Audit Services Department whose function (and legal right) it is to check up on anyone in the business of manufacturing records. Every so often MCPS staff or a commissioned firm of accountants will knock on the door of EMI, CBS, Virgin and every other British record company to check their books. Although accounting errors are sometimes found, fiddles are rarely uncovered and the MCPS certainly have the experience to find any that exist. Who is to say though that if they did not check, someone might not try to pull a fast one?
I think that just about covers the making and selling of records. The other main money-earner is the licensing of use of these recordings, an area where retail sale is not involved.
Most recorded music falls into two categories:
1. Commercial recordings, where copies are sold to the public.
2. Library music, where recordings are made for incorporation in other productions.
There is a third category which is that of unreleased recordings, of which most composers have their own library!
When you buy an album, you have effectively bought a licence for a particular use, ie. listening in the home. This is what the 6.25% royalty is for. Any other use of the music must be agreed and paid for. Most composers and publishers, whose works are issued commercially, would very much like to see them exploited on TV and in films.
As it is their right to control such usage, any film producer wanting to use such a recording must seek a licence.
To make matters simple, the MCPS run a Licensing Department whose function it is to authorise the use of members' works and to collect the appropriate fee. It is up to the composer and publisher, of course, to allow or disallow the use of a particular work for a particular purpose and to set a price on the work for the use the film producer desires. The MCPS simply act as a go-between. They have a suggested scale of charges and can generally make life much simpler for producer and publisher. Naturally, they deduct a commission on monies collected for this service; there are wages to be paid and buildings to maintain after all.
There exist blanket agreements for the use of music in TV programmes with both the BBC and ITV companies (although Channel 4 is not covered). This means that they pay a set sum each year for the privilege of incorporating recorded music into their shows. This money is shared out among the composer and publisher members of the MCPS according to the amount of logged usage. Other programme producers, including independent producers who supply the BBC and ITV, must obtain clearances for every piece of music used. As in the case of the Performing Right Society, programmes are monitored to check for unauthorised use of copyright material, the two societies (MCPS and PRS) co-operating to an extent to achieve a better coverage.
Library music is a rather different matter. This is music written and recorded for use in other productions and is not available for sale to the public. There are several music publishers who run music libraries. What happens is that they have music specially written and recorded for their library, acquiring from the composers all mechanical rights for the entire world. Every year, a group of library music publishers gets together and sets rates for all different types of usage. These rates are published in a leaflet issued by the MCPS. The result of this is that any producer can use any piece of library music for any purpose, as long as he pays the appropriate fee. He does not have to seek clearance in advance - he just goes and does it. The advantages are obvious.
What is it worth in pounds and pence? I can hear everyone asking. To give you a clear idea, here are some examples:
To obtain a licence to use 30 seconds worth of library music in a production made for normal broadcast television, to be shown anywhere in the world, costs £46.00. Don't forget to add the dubbing fee (£4.00 per track per production) for copying the music from the library disc, and the MCPS service charge of £5.00 per licence. Plus VAT, of course. It does not sound like much, and it is only payable once, on taking out the licence. There would also be performance royalties to boost the income though.
A far better source of income is advertising. You're not surprised, are you?!
To use 30 seconds of library music in a TV commercial to be shown by any ITV company in the UK plus Channel 4 and TV-am costs £650 plus those little extras mentioned earlier. That's more like it! However, as I said before, this fee is paid only once so if the company running the ad want it to appear on our screen for the next ten years you will not see any more money unless the ad is altered in some way, in which case a further fee would be payable. Once again there would be performance royalties due from repeat showings.
I think it is evident that there is more money in the licensing of commercial recordings rather than library ones, particularly if I tell you that it is common to license commercial recordings for a certain period of time, or a set numbers of showings. Clearly, if a TV advertisement is planned to run for a year, any music used ought to attract a higher licence fee than if the campaign only ran for six weeks. In the case of cable and satellite TV, which are both still in their infancy, a copyright owner may not want to license for an unlimited period of time simply because in the future, when more people can receive the transmissions, licences will be worth more money. Funny how it always comes back to money. Whatever happened to art?
Other licences available from the MCPS include those for audio-visual productions such as those used by companies for in-store product promotions, sales training, etc, and also for radio commercials.
There are many audio-visual facilities houses who undertake this kind of work. Most of them keep a collection of library discs for such use. The MCPS asks all such library music holders to sign an agreement which outlines the procedures involved in the recording and declaration of copyright music. The facilities house will keep a record of all dubbings made from library discs that occur on their premises and returns are made to the MCPS.
Although the MCPS is not as big, nor does it have the financial turnover of the Performing Right Society, it still collects and distributes a sizeable sum of money each year. For example, in 1986 just over £15million was distributed to composer and publisher members. Unlike the PRS, it does not ask for an assignment of rights of the members, it functions more like an optional collection agency. If an individual member wanted to collect royalties directly, say from a record company, then they would be quite at liberty to do so; the MCPS would collect and distribute royalties and licence fees from all other sources.
The MCPS represents the interests of over 6000 composer members and 4500 publisher members based in the UK and abroad. Needless to say, they are all beavering away and new musical works are being registered and entered into the society's computer at a rate of over 100 a day! The total number of works so far is two million and rising.
The staff of around 180 obviously have their work cut out. The MCPS also maintains links with organisations performing similar functions all over the world and, of course, there are royalties to be exchanged in both directions. The only question left is...
Do you compose music? Is the music you create issued on commercial records or tapes? Is your music ever recorded by someone else for any commercial purpose?
If this sounds like you then maybe you should join. The first thing to remember is that unless your work is earning money then the MCPS do not stand much of a chance of collecting anything, so that is the first criterion.
The other thing is that if your publisher is an MCPS member then your earnings from mechanical royalties will probably be channelled through their accounts, so you do not need to join yourself.
I hope I have given a flavour of what mechanical rights are all about and of how the MCPS works. My thanks to Alisdair Blazaar of the Customer Services Department of the MCPS. If you need to know more then please contact them at the address given below. Look out for future articles in this series where you will find out that there are some more 'rights' that I have not gone into yet.