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Performing Rights and the PROs: ASCAP, BMI and SESAC Comparison

This article was originally published on Songwriting and Music Business dot com on March 26, 2013 and has been updated on April 4, 2024.




 

         Before we get into what performing rights are, and explain the purpose of PROs (performing rights organizations), we should briefly set the stage to see where these things fit into the over all scheme of the songwriter’s role in music publishing.

 

         When you write a song, you are really creating intellectual property in the form of a copyright.  Copyright protection gives you, the creator/writer, certain exclusive rights. 

 

         Exclusive means that only you have these rights and no one else.

 

         The exclusive rights granted the owner of a copyright are: 1) to reproduce the work (make a copy, recording or print), 2) to make a derivative work (a spoof like Weird Al or Cletus T Judd or a modernized version using elements of the old song), 3) to distribute the work (give it away or sell it), 4) to perform the work publicly, 5) to synch the work with moving visuals, 6) to digitally stream the work, and in the case of visual artists and lyrics 7) to publicly display the work.

 

         As you can see, pretty much any way you can think of to use the music, there is a right associated with doing that and it belongs to the copyright owner.

 

         The performance royalty so often discussed in songwriting circles comes directly from this 4th right, “to perform the work publicly.”

 

         This public performance can take many varied forms.  Obviously, any time you pick up a guitar & play your song at a gig, that’s a public performance.  But what about if you’re in a crowded restaurant & someone’s cell phone starts blaring a 50 Cent ringtone?  Does that count as a public performance? 

 

         In order to understand this lucrative aspect of songwriting, let’s start at the beginning.  What constitutes a public performance & how do you get paid for it?

 

         A performance is defined by U.S. Copyright Law as follows: “to “perform” a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.”

 

         In plain English, a performance is when you play your song for people, whether live, on TV, over the radio, internet or in a movie.  Pretty much any time you can hear music in public and you’re paying money to be there, it counts as a public performance.

 

         A performance royalty, or payment, results whenever the copyrighted work is publicly performed. 

 

         “How is this so?” you may ask.  “I don’t pay when I turn on the radio.  How can there be a royalty for something that’s free?”

 

         Enter the PROs, the performing rights organizations. 

 

         Before 1897, copyright protection in the United States was limited to printed music only.  Classical composer, Giacomo Puccini is credited as being the catalyst inspiring the establishment of ASCAP in 1914, the first performing rights organization in the US. 

 

         Puccini had seen the collective power of the performing rights organization in France, and realized that the U.S. should have a similar system of collecting the theoretical royalties owed to composers.

 

         Currently, the U.S. is home to three main separate performing rights agencies, PROs (pronounced “pee-are-ohs”) as they are called in the US industry.

 

These are BMI (Broadcast Music Incorporated), ASCAP (American Society of Composers, Authors and Publishers), and SESAC (which used to be an acronym for Society of European Stage Authors & Composers, but now “is simply the name of the company,” according to the website.)

 

         These agencies all have the same purpose: to collect performance royalties on behalf of songwriters & publishers and they all have their own methods of achieving this goal. 

 

         Before we get into the differences among these agencies, let’s explore how they are similar: 

 

         All PROs require exclusivity, that a writer only sign with one agency during a particular period of time.  This policy ensures that copyright owners do not collect double or triple compensation for the same performance. 

 

         You can leave your PRO & affiliate with a different one at certain predetermined times every few years depending on which one you’re with. 

 

         Each PRO has different sign up & resignation procedures & they are usually fairly stringent. 

 

         When you affiliate with a PRO, be sure to keep a good record of your sign up date & any codes you are given upon signing.  You will need these in the event you become disgruntled and wish to change your affiliation at a later date.

 

         Another thing all PROs have in common is that they require the publisher to affiliate with the same PRO as the writer on any compositions in the catalogue. There are certain exceptions to this rule, but the PROs encourage joint registration.  For this reason, all big publishers have company names registered with all three PROs. 

 

         Magic Mustang, the publishing entity owned by Broken Bow Records, for example goes by the names: Magic Mustang Songs (BMI), This is Hit (ASCAP) & Legends of Magic Mustang (SESAC).  These are all owned and operated by the same parent company, but because they hire staff writers who belong to all three PROs, the publisher houses their publishing share of the copyright in the same PRO catalogue as the writer’s share whenever possible.  [update – these catalogs are now owned by BMG.]

 

         Sony, too, has three different publishing company names - more actually, if you count all the European & Asian territories in which they do business and all their sub-publishing companies.

 

         Ok, so we know that you can only be in one PRO at a time & that your publisher is there with you.  What are you doing there? 

 

         You are assigning your right to collect the royalties generated by public performance of your songs to the PRO.  Now it’s their job to make sure you get paid for the performance of your copyright. 

 

         How do they do this?  All of the PROs issue blanket licenses to venues, restaurants, movie theaters, laundry mats, dentist offices, and any other businesses they hear about who have been playing music for their paying customers. 

 

         What’s a blanket license? 

 

         It’s just what it sounds like, it’s a license that allows the customer to play any and all the songs belonging to the writers & publishers represented by that PRO.  You can imagine how hard it would be for each individual copyright owner to go around collecting money for the public performance of his song.  It would be virtually impossible. [Note – it’s very hard, but we did an experiment for 2 years in census based direct public performance licensing at our venue and it is possible.]

 

         The PROs take the money they collect from all these music-playing businesses & divide it up among their affiliates.  How they do this exactly is a mystery known only by the companies themselves. 

 

         The efficiency of the PROs relies on two important factors: 1) how they determine which songs were actually played under these blanket licenses, and 2) how much / how they pay the songwriter/publisher for that performance.

 

         If you’re lucky, your PRO relies mainly on census survey methods, not on sample surveys.  The difference is enormous. 

 

         A census survey is a method of determining which songs are played based on raw data of actual plays.  Technologically, this is possible when codes imbedded in the recording of the song trigger a digital counting mechanism and the performance is logged in a database for royalty payment, or when each station/venue submits an exact report of what compositions are actually played.

 

         A sample survey is a method of determining which songs are played based on extrapolation of sampled collected data.  For example, all the songs on a particular radio station are monitored for a period of time and then the data is assumed to be an accurate accounting of all the radio stations of that same type in that area.  The sample survey method is still used for tracking radio performance by ASCAP, BMI, and SESAC.

 

         Unlike mechanical royalties, those generated when a copy of a song is bought / consumed, either as a download or a physical CD, which have a set royalty amount of 12.4 cents per copy for the copyright owner, performance royalties have no such standard rate.  [Mechanicals are also generated when songs are digitally streamed and typically earn the copyright owner less than 1 cent per use (between $0.0001 and $0.006 usually.)]

 

         The amount of money generated from a public performance of a song can vary depending on a variety of factors determined by each individual PRO. 

 

Venues are assigned a weight factor based on their capacity.  Television shows are assigned weight factors depending on their ratings, the time of day the performance airs, and how much of the song is used.  Radio airplay, too is rated according to the station’s market share, time of day of the performance, etc.

 

         It’s one thing for PROs to collect payments from companies, such as radio and TV stations who are used to paying for music & who are part of an industry that understands intellectual property rights.  But what about the new chiropractor office down the street?  Do you think the doctor knows he is supposed to pay for the music he’s filtering to his customers?  He may not. 

 

         All PROs have branches of employees whose job it is to get businesses to pay for the music they play to their customers.  Some try to educate these business owners about their responsibility to pay for their music.  Often, small businesses don’t understand the copyright laws & don’t want to spare the added expense of securing blanket licenses from all three (now four) PROs just to play the radio for their customers. 

 

         You can imagine, for the small business owner, the PRO reps must seem a little bit like gangsters coming into their shops demanding protection money.  Restaurant owners know they are paying for salt & pepper, for napkins & tablecloths, but not music.

 

         PRO reps have told me they find businesses are far more likely to keep paying their fees & be happy with their decision to do so if the business owners understand a little bit about the underlying concepts of copyright protection and their role in supporting the copyright owners

 

Like most of the public, many business owners think the rich celebrities they see singing the songs are the ones who write them.  It takes a little insight into the industry to know that is not at all the case & to understand the need to compensate the little guys, the songwriters & independent publishers, for their work.

 

         Now we’ve discussed some of the ways PROs are alike, let’s examine their differences:

 

         ASCAP is the oldest of the three PROs in the US.  Established in 1914, ASCAP came along at a time when the music of Irving Berlin & John Philip Sousa was thriving.  The only member owned PRO in the US, ASCAP’s board of directors is made up of 12 writers & 12 publishers who are elected every two years by fellow members.  The daily operations of the organization are handled by business professionals, presumably hired by the directors.

 

         ASCAP reportedly collects the most royalty money of any of the US PROs due to the volume of work created by their roughly 410,000 members [note – updated 4/5/24 to more than 975,000 writers and music publishers].  In order to join ASCAP as a writer, one of your songs must have been commercially recorded, performed in/on an ASCAP sanctioned venue or broadcast medium, or published & released for sale.  ASCAP has $1.592 billion “available for royalty distribution” from revenue in 2023 – source from their website.


ASCAP is currently the only not-for-profit PRO left in the U.S.

 

         BMI’s criteria for joining is much more lenient: if you write or publish songs, you can join.  As a result, BMI has more affiliates, roughly 475,000 [updated 4/5/24 to 1.4 million copyright owners] but doesn’t quite distribute as much royalty money as ASCAP.  BMI was founded in 1940 [note 1939 is the date listed on their New Mountain Capital description] by broadcasters (radio guys) in part to break up the ASCAP monopoly on performing rights collections.  Prior to that time, no one was collecting the performance royalties for rock & roll, jazz or other forms of music, as ASCAP was strictly for classical & traditional composers & publishers. 

 

         BMI is run by a corporate staff, not by a board of directors/members as is ASCAP, and as of 2022, BMI moved from not-for-profit to for profit status.

 

         BMI is also seen as a leader in using technology in the music business.

 

Launched in 1994, BMI dot com was the first music industry web site & among the first 1,000 dot com registrations.  Since then, BMI has continually updated their online presence & their online tools available to writers/publishers.  Most recently BMI was purchased in 2023 by a group of investors called New Mountain Capital, where it is listed in their portfolio as “a data, payments, and information services provider to the global songwriting and music publishing community.”

 

         SESAC was founded in New York in 1930.  The smallest of the three main PROs operating in the United States, SESAC prides itself on the close relationships developed between reps & writers/publishers.  ASCAP operates on a not-for-profit basis, whereas SESAC and BMI do keep some of the income they collect as profit.  SESAC is also different from the other two PROs in that you must be approved to join, as there is no open membership.

 

         Since the initial writing of this in 2013, a lot has changed at SESAC.  For one, the company was purchased by Blackstone in 2017.  Around that time, the company began purging older or inactive writers from their rosters, even ones who previously won SESAC awards, and many left to join BMI or ASCAP.

 

         At the same time, SESAC became the only large performing rights organization in the United States able to collect mechanical royalty in addition to performance royalty.

 

         This is because of two reasons.  First, SESAC is the only large U.S. based PRO that does not operate under a consent decree from Congress prohibiting it from engaging in certain activities.

 

Second, SESAC purchased the U.S.’s largest mechanical rights organization called Harry Fox Agency which was owned and operated by the National Music Publisher’s Association.  SESAC now owns the data that was purchased from NMPA, who is the designated overseer of the newly created Mechanical Rights Organization.  These are indeed interesting times.

 

In addition to the big three ASCAP, BMI and SESAC are smaller groups that participate in collecting performance royalty for their songwriter and music publisher / copyright owner clients.

 

The most famous of these is GMR (Global Music Rights) who handles the songs of superstar writers and artists including Metallica, Bruno Mars, Post Malone, and Pearl Jam.  Don’t worry about joining them. They’ll join you if you get enough steam behind you, or at least offer to.

 

         One of the most difficult decisions facing any new songwriter is figuring out with which organization to affiliate.  It is important to know that all of these organizations conduct workshops, hold showcases & generally help their affiliates get a leg up in the business, within reason.  You should check out all three websites & try to set up a meeting with reps from all three before you make your decision.

 

         All three have significant resources that can help you make connections to further your career.  You have to make sure the PRO you choose and your rep in particular is willing to help you advance your career by making introductions for you.  They can be very powerful allies in the music business. 

 

         The goal for any new affiliate should be determining which one of the big three is best suited to your writing style, personality & career goals.  Take your time & pick the best PRO for you.  Your PRO affiliation could well be one of the most important & lucrative relationships in your songwriting career.  Choose wisely.

 

How much to join ASCAP?        Free for writers and $50 one time fee for publishers.  (You need to join as both writer and publisher)

 

How much to join BMI?      $75 for songwriters; $175 to $250 for publishers; $500 for partnerships.

 

How much to join SESAC?        Free with invitation to join.

 

How much to join Global Music Rights?     Invitation only.

 

What if I’m not in the United States?        Join your country’s organization –

Australia        APRA AMCOS

Canada          SOCAN

France           SACEM

Germany        GEMA

India               IPRS

Japan             JASRAC       

UK                  PRS for Music

 

 

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