Could PRS lose MCPS business after 19 years together?

They’ve been joined at the hip for nearly two decades, but the UK’s Mechanical Copyright Protection Society (MCPS) could now cut ties with PRS For Music – costing the latter a client with a nine-figure annual business.

The MCPS, which licenses mechanical copyrights on behalf of over 26,000 publisher and composer members, has today begun inviting third parties to pitch for the contract to administer its business.

MCPS distributed £140.2m in royalties in 2014, according to filings at Companies House.

However, it had to pay a substantial £14.96m in administration costs to PRS in the year, plus a further £2.285m under the duo’s ‘Alliance Stability Agreement’.

In total, that resulted in an annual payment to PRS of £17.25m.

The question now, with the pair’s current agreement presumably coming to an end this year: is this deal competitive enough for PRS to secure MCPS’s business in the future?

Although PRS will be considered the front runner to retain MCPS’s business, rival admin services who may bid could include the likes of Kobalt’s AMRA and US society SESAC, as well as continental societies and tech companies.

(Conspiracy theorists in the music publishing world will no doubt be ruminating on the possibility that Google might even make an approach – and, at this stage, there’s technically no reason why not.)

Jane D pic“We are a company with a £140m annual turnover but which has decided we are not in the business of building pipes and machines… We require a major reboot in terms of how we operate.”

Jane Dyball, MCPS/MPA

In addition to MCPS, rights looks after by IMPEL – Independent Music Publishers e-Licensing – are also up for grabs.

IMPEL negotiates digital deals on behalf of its near-50 publisher members – including Imagem, Music Sales, Beggars Music and Fintage House – with players such as Spotify, YouTube and Apple Music.

Jane Dyball, CEO of the MPA Group of Companies, parent of MCPS, said: “Having weathered some fairly difficult years and fast-tracked achievement of our most recent business plan, MCPS is now at a major turning point in its history.

“We are a company with a £140m annual turnover but which has decided that we are not in the business of building pipes and machines.”

MCPS and PRS first joined forces in 1997, when they formed The MCPS-PRS Alliance.

MCPS then became an autonomous company in mid-2013, but signed over administration of its operation to PRS as a key facet of its parting agreement.

That deal is now coming to a close.

Added Dyball: “In a fast-moving data-driven environment, it is essential that we find the best back-office solution via a competitive tender so that we can be more responsive to the needs of our members and our customers.

“This will allow the management team to focus our attention on growing our revenues. The Board has a firm belief that the mechanical right is an essential right for every music-related business.

“By licensing at appropriate value, and making it easy for licensees to buy our members’ rights, we are convinced that growth is not only possible but inevitable.

“However, this requires a major reboot in terms of how we operate. This is the underlying purpose of the RfP [Request for Proposals].”

Any business enquiries about the MCPS RfP should be directed to Tom Fletcher: tom.fletcher@mpagroup.com.

Established in 1924, and owned by the Music Publishers Association, MCPS has over 20,000 writer members and over 6,000 publisher members.

It offers blanket licences, licensing schemes and individual licences on behalf of its members.Music Business Worldwide

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