The Role Of Copyright Societies & CMOs In The Music Business: Do They Ensure Fair Payments?

In the ever-evolving landscape of the music business, copyright societies and collective management organizations (CMOs) play a crucial role in ensuring that artists, songwriters, and rights holders receive their fair share of royalties. Organizations like IPRS (India), PRS (UK), ASCAP/BMI (US), and others are responsible for collecting and distributing performance royalties from radio, streaming platforms, live venues, and television broadcasts. However, their transparency and efficiency remain a topic of debate, particularly among independent artists who struggle with delayed or unclear payments.

How Do CMOs Work?

CMOs act as intermediaries between rights holders and users of music. They license compositions to broadcasters, digital platforms, and public spaces, collecting fees and distributing them as royalties. Theoretically, this system ensures efficient rights management, preventing unauthorized use while maximizing earnings for creators.

However, the efficiency and transparency of this process vary globally, leading to increasing scrutiny.

Are CMOs Transparent Enough in Royalty Distribution?

One of the biggest criticisms against CMOs is the lack of transparency in royalty distribution. Artists and songwriters often face challenges such as:

• Delayed Payments – Royalties collected may take months or even years to reach the rightful owners.
• Opaque Distribution Models – Some organizations fail to provide clear breakdowns of revenue distribution, leaving artists uncertain about how their earnings are calculated.
• Favoring Major Rights Holders – Larger labels and established artists often receive payments first, while independent artists struggle to claim their rightful shares.

Case Study: PRS vs. UK Artists

In 2023, PRS for Music (UK) faced backlash after many independent musicians complained about missing payments from streaming services. The lack of granular data made it difficult for artists to track their earnings, fueling concerns over whether the distribution model was favoring major rights holders.

The Indian Scenario: IPRS’s Recent Overhaul

In India, the Indian Performing Right Society (IPRS) has made significant strides toward modernizing royalty distribution. With the rise of digital streaming, IPRS recently introduced automated tracking systems to ensure fairer payouts. However, concerns persist over historical unpaid royalties, with many regional and independent artists struggling to claim their fair share.

The Battle Between Independent Artists and CMOs

For independent artists, the role of CMOs is often a double-edged sword. While these organizations provide a legal framework to collect royalties, they also pose challenges:

1. Unregistered Artists Lose Out

Many indie musicians are unaware of the necessity to register with CMOs, leading to lost royalties. In India, IPRS has taken steps to increase awareness, but the process remains bureaucratic.

2. Streaming Revenue Disputes

CMOs have been criticized for underpaying artists for streaming revenue. In the US, ASCAP and BMI faced legal battles over royalty rates, with artists advocating for a higher payout percentage from streaming platforms like Spotify and Apple Music.

3. Independent Alternatives to CMOs

To counter the inefficiencies, independent musicians have turned to direct-to-fan platforms and blockchain-based royalty tracking systems. Services like Songtrust and Audiam allow artists to collect royalties without going through traditional CMOs.

Way Forward: Can CMOs Evolve to Support All Artists?

To build a fairer ecosystem, CMOs must adopt greater transparency, faster payouts, and improved digital tracking. Some solutions include:

• Real-time royalty tracking through blockchain.
• Improved payout structures that favor independent artists.
• Clearer communication on how royalties are calculated and distributed.

As the music industry shifts towards a streaming-first economy, CMOs must embrace technology and fairness to retain their relevance. Whether they will rise to the occasion remains to be seen.