- Understanding Performing Rights Organizations and Which One is Right for You
Understanding Performing Rights Organizations and Which One is Right for You
Under U.S. law, copyright holders are entitled to compensation for the use of their works. For songwriters, composers, and music publishers this means they are owed payment when their songs are copied, distributed, synced with video content, and performed and played publicly. Songwriters and music publishers should affiliate themselves with the correct organizations to ensure that the copyrights in their songs are being monitored and licensed, and that they are receiving royalty payments for uses of their music.
For a song, the songwriter and music publisher of the composition are entitled to payment anytime:
- A digital copy of the song is purchased (for example via iTunes).
- A CD (and, now that analog formats are making a comeback, a vinyl record, or a cassette) containing the song is made.
- The song is included in a film, tv show, commercial, YouTube video or video game.
- A webcaster (think Pandora and Satellite Radio) plays the song.
- A radio station plays the song.
- The song is played or streamed in a public place.
- The song is performed by musicians in a public place.
To ensure you’re collecting on all of your royalties in all of the situations mentioned above, songwriters and publisher will need to engage with a number of music industry players. For the purposes of this article, we are going to focus on the last two situations just mentioned. The following is specifically intended to help U.S. based songwriters and music publishers ensure they receive royalty payments for public performances of their music.
Copyright and the Right of Public Performance
U.S. law grants six exclusive rights to the holders of a copyright, one of which is the right to authorize the performance of the work in public. For songwriters and music publishers, this means they hold the ability to license their songs to be played publicly.
First, we need to clarify a few terms as they are legally defined in copyright. When we say “public” we are referring to any place where music is played for a large gathering of people for profit (think bars, restaurants, shopping malls, concert venues, bowling allies, airports, amusement parks, casinos, or any other business open to the general public). Additionally, when we say “played” or “performed”, we are mainly talking about a band performing a song (whether it’s a cover or an original) or a venue playing a sound recording of a song from a CD, a hard drive, or streamed through a service like Spotify. Separate rules apply in situations where songs are played through webcasting services, radio station, cable or satellite TV service, or a jukebox or TouchTunes-type device.
It is also important to note that the party responsible for performing the music, and therefore responsible for paying the licensing fee, is typically the venue that is holding the performance and making money from the performance. So, if a cover band was hired by a bar to play for a night, the bar would be responsible for paying the fees, not the band.
So, how do songwriters and music publisher collect licensing fees when their compositions are performed publicly? Public performance rights are typically managed by a specialized rights management company called a performing rights organization.
What is a Performing Rights Organization?
A performing rights organization or “PRO” is a firm that collects licensing fees from those who publicly perform music, and redistributes the money to the songwriters, composers and music publishers that the PRO represents. Hundreds of thousands of songwriters and music publishers sign up with PROs to authorize the firms to manage the music creators’ public performance rights in their songs. PROs therefore maintain catalogues or repertories of massive amounts of music. The PROs offer licenses to businesses and venues to grant them the ability to perform or play all of the songs in the PROs catalogues. These licenses are referred to as “blanket licenses” because they are broad in that they give the business the legal right to play any song represented by the PRO, not just individual tunes. PROs then monitor what songs are played and how frequently the songs are played. Periodically throughout the year, usually once a quarter, based on how many times a songwriter or publishers song was played, the PRO will issue the music creator a royalty check, compensating them for all of their performances within the previous period.
What PROs are Out There?
There are three main PROs in the United States: ASCAP, BMI, and SESAC. All three organizations perform the same exact function. However, they operate in slightly different ways.
SESAC, the smallest PRO, is the only one of the three that is for-profit and requires an invitation. The company is headquartered in Nashville, with offices in New York City and Los Angeles. Unlike ASCAP and BMI, to become an affiliate of SESAC you must be asked by the organization. Typically, only well-known and commercially successful artists are invited to join SESAC. The terms of SESAC affiliation agreements can vary widely. Additionally, because songwriters and publishers targeted by the organization are already making relatively significant amounts of money from their music, large advances are usually paid to the artists and publishers up front. If you have the option to sign up with SESAC, you should pay close attention to how your compensation may change by switching from a different PRO.
Since SESAC usually only works with the more established players in the music industry, the real option for most songwriters and individual music publishers, who are just starting out or haven’t made it big yet, is between ASCAP and BMI. SESAC represents only a small portion of songwriter and publisher in the U.S.; just 10%. Most writers and publishers are signed with ASACP and BMI who gladly accept any and all applicants.
ASCAP - short for the American Society of Composers, Authors, and Publishers – is headquartered in NYC with offices in LA, Miami, Nashville, Atlanta, and Puerto Rico. ASCAP is the oldest of the three organizations, founded in 1914. In 2020, ASCAP royalties available for distribution to its U.S. songwriters, composers, and publishers from ASCAP-licensed and administered performances totaled $891 million. As of 2020, ASCAP estimated a total of 800,000 members.
BMI – which stands for Broadcast Music, Inc. – is also headquartered in New York City, with major offices in LA, Nashville, Austin, Puerto Rico and Washington, D.C. BMI was founded after ASCAP, in 1939, and is the largest of the PROs. Between June 2019 and June of 2020, BMI distributed and administered $1.233 billion to its songwriters, composers, and publishers (both domestically and internationally). The total number of BMI creators and copyright owners is currently around 1.1 million.
Which PRO is Best for Me?
If you are the point where you are considering joining, or ready to join, a PRO, take a minute to consider the following and jot down some notes:
- How often do you plan on gigging and playing your own songs? Or, are you more of a writer and would rather have others play and record your music?
- Are you working with a music publisher? Do you plan on continuing to work with a publisher or form your own publishing company?
- Do you live near, or plan to move to, one of the cities where the PROs have an office?
- Which PRO do your favorite artist belong to? (Joining a PRO can also be a strong networking opportunity for you. Each of the PROs list which artists are members or affiliates.)
- Where are you at in your songwriting or music publishing career? Are you just starting out? Are you at a tipping point where you plan to see more income from your music? Are you already receiving steady income from your songs?
Each of the PROs offer benefits, perks, and discounts. All PROs offer various workshops to help songwriters and composers improve in their craft. The organizations typically make space available in their offices for music creators to write and record music (the gear is often provided). Understanding what is most important to you or fits best with your career plans will help guide your decision.
If you are an independent writer, self-published songwriter, or independent music publisher BMI is likely the better choice.
- Opportunities to perform – BMI Stages showcases all over the country. Weekly, monthly, quarterly or annually, these series highlight both bold new voices and established hit-makers
- Events - BMI books stages and performance slots at premier festivals and conferences throughout the year, including SXSW, Lollapalooza, Bonnaroo, Austin City Limits Music Festival, and more
- Education - BMI panels offer insight from insiders throughout the year.
- Workshops – BMI holds songwriting and composing workshops
- Featured Songwriters: Demi Lovato, Lil Wayne, Lady Gaga, Taylor Swift, Eminem, Ed Sheeran, Sam Cooke, Willie Nelson Red Hot Chili Peppers & John Williams
- Writer – 2 year agreement – Free for songwriters.
- Publisher – 5 year agreement - one-time application fee of $150 to register a publishing company that is owned by an individual, and $250 for a publishing company that is a partnership, corporation (including sole stockholder corporations) and/or limited liability company.
- BMI Writer: https://www.bmi.com/forms/affiliation/bmi_writer_agreement_W800.pdf
- BMI Publisher Kit: https://www.bmi.com/forms/affiliation/bmi_publisher_agreement.pdf
- Distribution Schedule
If you tend to gig, tour, and play shows more than write songs for others you may find the perks of joining ASCAP more appealing.
- Travel Discounts - Hotel and rental car discounts
- Healthcare - Discounts on services including Doc On the Go (telemedicine provider) and BetterHelp (professional counseling services)
- Professional services – Discounts on web design services such as Bandzoogle
- Workshops - Songwriting camps for pop, country, and Christian music, as well as workshops for composers, theatre music, and film scoring (https://www.ascap.com/help/career-development/workshops)
- Education - Music business classes
- Featured Songwriters: Mariah Carey, The Weekend, Dua Lipa, Lil Baby, Lionel Richie, Hans Zimmer, Jackson Browne & Madonna
- Distribution Schedule
John Moustis is Commercial Counsel at RSA Security where he supports the company's legal function by negotiating commercial contracts, handling employment matters, and monitoring the company's intellectual property portfolio, among other responsibilities. John has many ties to the arts community including as a guitarist and singer in Chicago-based cover bands The Bread Machine and The Slices, and as a previous intern for the Performing Rights Organization SESAC.