Biz: Performing Rights Organization Comparison
written by Aidan Rush
It would be foolish for any songwriter who’s ever had his or her material publicly performed (regardless of the audience size) to not register with a Performing Rights Organization (PRO), yet so many artists let that revenue opportunity fall by the wayside, deciding to put it off until they’re “bigger.” What these artists are failing to realize is that even if their only fans are mom and dad, any time that song is played in any public setting with commercial intent, the songwriter is owed royalties. These royalties are collected and distributed by entities called Performing Rights Organizations, who only take a small administrative fee off the top of the royalties bands are owed for their services.
Though the service they all provide is the same, this Biz article is being written to inform musicians of the differences between the three major PROs (ASCAP, BMI, and SESAC), and what you should look out for when registering. If we failed to cover anything, let us know in the comments!
Indie-music.com has a very short and comprehensive review of the service PROs provide, which goes as follows:
PROs collect the royalties due to artists for public performance of their copyrighted works. This includes radio and TV performance, use in other forms of media, and public performance (live or on a jukebox). The copyright owner is entitled to varying royalties from each performance of his music. The PROs track, license, and collect fees, and distribute royalties. They collect royalties for and represent songwriters, lyricists, composers, and publishers.
It’s very important to note that PROs only license performance rights, and do not deal with dramatic performances like those seen on Broadway. They do not license mechanical rights, master rights, synchronization rights, or grand rights. They also don’t cover internet radio services like Pandora, satellite radio services like SIRIUS and XM, or digital cable music services like Music Choice and Muzak. That realm is monitored by SoundExchange, and you can read our Biz article about them here.
To join a PRO you must either be a songwriter or a publisher. Membership requirements vary across all three organizations, but most importantly they just want proof that your music has been publicly performed or published. Some (but not all) require annual membership fees that vary in price for writers and publishers. SESAC charges no fees, but they are much more selective in the applicants they accept. The SESAC selection process usually consists of some type of screening and an interview. It is impossible to belong to more than one PRO at a time, so make your decision wisely.
It’s difficult to outline all three PROs' chief differences in one article, but we’re going to try. If at all possible, it’s best to meet with representatives from each and talk to other musicians to figure out which organization is best for you.
ASCAP: A one time, non-refundable nominal processing fee of $35 is required to apply for ASCAP membership for writers and publishers, but there are no recurring annual fees.
Things you will need when applying:
Writers: Your social security number, and information about a work you wrote or co-wrote (e.g. title, name of the performer or artist, date it was released or performed).
Publishers: Choices for your publishing company name, information about your company (taxpayer identification number, when and where it was established, stakeholders; or Social Security Number), and information about a work you published (e.g. title, name of the performer or artist, date it was released or performed).
BMI: No fees are required of composers and songwriters.
SESAC: There are no fees or dues if you are offered an affiliation with SESAC. As mentioned above, SESAC is more selective than the other two PROs, but claim that they’re smaller and more personal because of it.
ASCAP: For both writers and publishers, contracts exist on a year-to-year basis, and are terminable in any given year. They also automatically renew from year to year if not terminated by the artist.
BMI: For writers, the standard agreement lasts 2 Years. For publishers, that number is 5 years. It’s important that to know that the contracts will automatically renew themselves if not terminated with certain windows designated for resignation.
SESAC: Writer and publisher contracts exist in 3 year spans, and similar to BMI, renew automatically. This PRO must be notified of any resignation no more than 6 months or less than 3 months in advance of the contract’s renewal.
Each PRO has its own formula for royalty collection. As you can imagine, they’re all complex, and the final royalty owed to bands when it’s all said and done will vary based on a number of factors. We’ve inserted ASCAP’s royalty payment graphic below to demonstrate the types of things these companies take into account, but it’s best to visit the royalty calculation pages of each site independently. All links can be found below.
ASCAP: Their website does a great job of explaining royalty calculation through an image:
Radio Royalty Breakdown:
No PRO royalty calculation technique is alike, so it’s hard to say which formula will net the most income. It’s also important to note that these PROs usually only collect for songs played at least 60 seconds and are the only sound broadcast during the time of the performance.ASCAP:
ASCAP's radio payments are based both on a census survey (exact count) from MediaGuide as well as on a sample survey.BMI:
BMI uses information provided by its commercial radio station licensees to determine performances. All licensed stations are requested to log performances for a three day period each year, with different stations logging each day of the year. This sample is then factored to create a statistically reliable projection of all feature performances on all commercial music format radio stations throughout the country. In addition to the sample, BMI includes data provided by proprietary pattern-recognition technology, which identifies performances from any source containing audio, achieving extraordinary accuracy, even in high-noise environments, after detecting audio for as little as one to two seconds.SESAC:
SESAC uses state of the art pattern recognition technology supplied by BDS to track performances of its repertory on more than 1,600 commercial FM and AM radio stations in the U.S. Monitoring on these stations occurs on a census basis thus enabling SESAC to collect over 14 million hours of radio air time annually. Currently SESAC only makes payment for feature performances on radio. A feature performance is a vocal or instrumental work that is the principal focus of audience attention, Feature performances receive 100% of the applicable credit value. Songs achieving certain performance levels on radio may also qualify for bonus payments. Bonus payments may vary by radio format and by quarter in which the performances occur.
These companies also extend bonuses to songs that reach a certain play count threshold on radio. For BMI, the Hit Song Bonus kicks in once your song is played 95,000 times in one quarter. Their Standards Bonus is activated once your song has been played 2.5 million times since being released and at least 15,000 times during a quarter.
These are documents submitted to PROs by TV/Film production companies that detail the use of certain songs in the television episode or movie. The cue sheet will contain such information as use type (feature, background music, vocals, instrumental, etc.), and duration that the PRO will use to determine how much royalty money to pay the artist. These sheets also include information about the writer and publisher for the composition.
Benefits:Each PRO has its unique slew of benefits for members, which can be found in the links below. Most have to do with discounts for various music services. It would appear to us that ASCAP has a more comprehensive list that’s broken down categorically.
ASCAP, BMI, and SESAC all pay on a quarterly basis. The majority of big name artists are happy with their chosen PRO, whatever it may be. Smaller artists, though spread out equally among organizations, all highly recommend that artists in search of a PRO make sure they have a point person working at the company they chose whom they can rely on to be there for their questions when needed. Otherwise, it’s difficult to be heard when fighting with bigger stars for employees’ time. If you have any input to give on the issue, let us know in the comments!