Choosing who decides to collect your money for you can be one of the most important business decisions of any career. When a publisher or writer decides to commercially record a song they will have to join a performing rights society in order to (1) keep track of who is going to use that music (2) monitor how many times the song is used (3) negotiate licenses /permissions and fees with those who use to song (4) collect royalties from those who are using the song (5) disperse those royalties to writers and publishers.
The three main Performing Rights Organizations (“PRO’s” or “societies” as we will call them) in the United States are ASCAP – American Society of Composers Authors and Publishers, BMI – Broadcast Music Incorporated, and SESAC – formerly the Society of European Stage Author and Composers. According to The Musicians Business And Legal Guide by Mark Halloran, “The vast majority of U.S. Copyrighted songs are in the repertory of either ASCAP (a total of over 3,500,000 songs) or BMI (with more than 3,000,000 songs and compositions).” [1]
A publisher or writer must understand the fundamentals of copyright concepts before learning how PRO’s work and their relationship with publishers. A music copyright owner has the rights to “perform” the song or license the “performance” of that song to any medium; whether it be a live performance at a venue, pre-recorded radio broadcast, television performance or online web-casts. We can call all song-users, broadcasters, or venue owners “outlets” as they connect those performances with the audience. In order for those “outlets” to sell or broadcast a copyrighted performance, they have to license the song from the publisher. It is possible for outlet owner to contact a publisher directly to license a song, but what is more common is that an outlet will purchase the rights to use many songs as a bulk order. By paying a fee to each of the performing rights societies, the outlets can be confident in playing or selling almost any commercially released work without worrying about receiving lawsuits from angry publishers.
This is where ACSAP, BMI, and SESAC reach their forte. Each of these PRO’s have their own package deal called a “blanket license” that gives an outlet permission to use any song within their catalog- and the money collected goes to pay the composers and publishers. For example if KROQ 106.7FM in Los Angeles wants to play big commercial hits, most likely those hit songs will be part of either ASCAP, BMI or SESAC’s catalog. KROQ’s licensing administrator can pay each of these PRO’s a quarterly fee, which will join the account to be paid to the writers and publishers.
Not all outlets want to pay for a blanket license. Many news stations and talk formatted shows with limited music transitions opt for per-program type broadcast licenses. The Music Business Handbook and Career Guide by David Baskerville Ph.D states: “In 1993, for instance, a lower federal court ruled that ASCAP must offer commercial television stations per-program licenses with surcharges for processing that approximate blanket licenses in cost.”[2]
Each PRO has their own way of monitoring public performances with the intent of accurately calculating each writer’s share on every song that gets used. In All You Need To Know About The Music Business, Donald S. Passman explains these different monitoring systems for radio airplay: “BMI requires its licensee radio stations to keep logs of all the musical compositions they play. This is done on a rotating basis, from station to station, and each station has to log for about three days (twenty four hours per day) each year. BMI then projects from these logs to the whole country. ASCAP does it differently. It hires an independent statistical firm to listen to selected radio stations on a rotating, unannounced basis, writing down the compositions played. Based on this, it then makes the same extrapolations to the whole country.”[3] Passman also mentions the emergence and growing popularity of Billboard’s Broadcast Data Systems (BDS) a digitalized tracking system that stores the songs that are played, dates and times. SESAC uses BDS along with the Billboard chart listings (depending on genre and possibility of cross-over hits) to monitor their radio play; sometimes different rates for songs and albums in the top 20 positions or during their pre-chart status.
Each of the PRO’s use similar methods for monitoring local, network, and syndicated television uses as well. Since most television broadcasters keep “cue sheets” from the production of each program, the PRO’s use them to track the music being used along with taping some 30,000 plus hours of television for surveying – to make sure that the cue sheets are accurate.
David Baskerville Ph.D, writer of Music Business Handbook And Career Guide describes the PRO’s monitoring of live performances: “None of the rights groups directly surveys performances in venues such as clubs, hotels, skating rinks or dance schools, because the cost of gathering such data would exceed the amounts that could be collected. Rather, the money generated by licensing such venues is generally distributed to members based on radio and television plays as a proxy.” [4]
It is also important for a publisher to know that PRO’s do not license dramatic works. Halloran describes the term “dramatic” works to include “plays (both musicals and dramas), dramatic scripts for radio, television, ballets and operas. A musical composition (a song) itself is a nondramatic work.”[5] Dramatic rights or “Grand rights” such as the permission to perform a play are usually licensed directly from the writer or publisher where as a radio station can play a recorded song from that play and be covered under a PRO catalog.
According to Baskerville, the PRO’s operating costs for monitoring, and administration change depending on the likeliness of music users who actually follow copyright laws, changing licensing rates, and the efficiency of collection from both domestic outlets and foreign collecting agencies. Baskerville claims that ASCAP and BMI are non-profit organizations that retain “under 20% of their gross receipts for overhead, then distribute the rest to their members and affiliates. SESAC, a for-profit business, is privately held and does not publish its operating expenses or the amount of collections that it retains for profit, but SESAC maintains that its royalties are competitive with ASCAP and BMI”[6]
The PRO’s keep websites displaying their catalog to make it easier for prospective licensors to contact licensee publishers. Creating an account with a performing rights organization has become the premier way to begin a career as a publisher even before registering copyrights in Washington.
Foreign performing rights societies have a slightly different purpose over seas than they do in America. Entire international regions might have PRO’s that act as a publisher (since a publishers job is to collect the royalties and disperse after all) and deal with writers directly. The evidence for this shows when looking at writer splits for mechanical uses, you might see something like:
EMI Music Corp 25% obo John Doe - UMPG Music 25% obo Ted Rock - SIAE 50%
In this situation SIAE, the PRO is acting as a publisher that might then distribute the royalties to small publishers with in its territory, however usually foreign PRO’s are required to make deals with U.S. societies if they intend to collect royalties for products released in the U.S.
If a publisher decides not to register with a PRO, it must be ready to conduct each and every license on its own, and do it’s own global monitoring to make sure outlets do not use the music illegally. If a publisher’s primary income comes from negotiated licenses, cutting out the middleman such as a PRO could save some money, but could also risk uncontrollable infringement cases without a strong legal affairs group to back up the lawsuits.
Performing Rights Societies are a necessary option for all composers and publishers who want to be successful. Their services and affiliations provide thousands of artists with steady income thus facilitating the foundation of intellectual property owners and music users.
[1] Holloran, Marc Esq. The Musicians Business And Legal Guide. Upper Saddle River, NJ: 1996 Pg 113
[2] Baskerville, David The Music Business Handbook and Career Guide. Thousand Oaks: 2006
[3] Passman, Donald S. All You Need To Know About The Music Business New York, NY: 2003.
[4] Baskerville, David The Music Business Handbook and Career Guide. Thousand Oaks: 2006
[5] Holloran, Marc Esq. The Musicians Business And Legal Guide. Upper Saddle River, NJ: 1996
[6] Baskerville, David. Music Business Handbook and Career Guide
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