US recorded music licensing org SoundExchange announced today that it has acquired the Canadian Musical Reproduction Rights Agency Ltd. (CMRRA), a licensing collective representing the vast majority of songs recorded, sold and broadcast in Canada.
The move is a dramatic development for the global music industry and represents SoundExchange's first expansion into the collective management of music publishing rights.
The transaction will allow the expanded organization to service an enormous cross section of Anglo-American sound recordings and music publishing repertoire and expand the US rights’ agency’s menu of services to client members.
Hailed as a “breakthrough transaction,” it marks the first time that a U.S. collective for sound recordings and the music publishing sector have come together under common management. The amalgamation offers efficiencies such as an integrated and streamlined administration for licensing and royalty distributions to affiliate members.
"We are proud to join forces with CMRRA,” SoundExchange President and CEO Michael Huppe said in a statement earlier today.
Continuing: “We have a simple, yet ambitious goal: to maximize the value of music for all creators – for musical works and recordings alike – wherever their work is used. The acquisition of CMRRA helps us increase efficiencies while also extending service to the publishing sector.”
CMRRA, founded in 1975, will continue to operate out of its Toronto headquarters and continue to work independently for now with a view to exploring collaborative sharing of core services.
CMRRA President Caroline Rioux and her senior management team will remain with the operation, reporting to the board of directors of SXWorks, a new subsidiary of SoundExchange. Huppe will lead SXWorks as Chair of the company.
"The board initiated its search for a strategic partner for CMRRA nearly a year ago," said Gary Furniss, chair of the current CMRRA Board and president of Sony/ATV Music Publishing Canada. "The board was committed to finding a firm with the right mix of music industry know-how and a culture of digital entrepreneurship. SoundExchange fit the bill. Additionally, the opportunity for data collaboration will inevitably increase the speed, efficiency and accuracy of royalty payments for everyone."
"We were looking for a partner that shares our vision and philosophy of service to the music publishing community," Rioux said. "With SoundExchange, we will not only continue to deliver on our mission to maximize the value of the reproduction right in Canada and meet our clients' needs to quality and low service fees, we will also be able to develop new services domestically and beyond."
SoundExchange administers sound recording public performance rights for more than 3,000 digital radio services covered under U.S. statutory licenses and administers many royalties for direct agreements on behalf of rights owners and digital service providers. The company paid nearly $884 million in royalties to artists and rights owners in 2016.
CMRRA represents the vast majority of musical works licensed in Canada and has assembled a large and comprehensive database that associates musical works to sound recordings. The agency provides services for numerous markets including streaming services, physical products, satellite and terrestrial broadcast mechanicals.
Details of the transaction are confidential.