A song is born as a composition and then it lives through its "performances". These performances were at one point just "live performances". But now when you hear your favorite song on the radio, in a TV show or even a song playing in the background at a club or restaurant, the writer of that song is paid for that performance. It might be a good place to note that ONLY the writers get paid from these performances. The PRO's or Performance Rights Organizations oversee your work on your behalf, the WRITER, (or writers) to get you paid from these performances. However, this is not done automatically. If you want to get what is owed to you as the writer/composer (even if it is a percentage of the whole monies collected), for your songs being played, you MUST register your songs with a Performance Rights Organization or PRO, and also get yourself a membership to these organizations. By the way, it is a very simple process!
Once your songs are registered, they become part of that PRO's library and are available to that PRO's customers. These customers pay licensing fees to the PRO's. Any broadcasting company like a radio station or re-boradcast place like a restaurant, or live venue must pay a blanket license fee to all 3 PRO's in order to be able to play music freely from infringing on the illegal use of music. These business pay the PRO's and the PRO's pay the authors and their publishers for the public broadcast, rebroadcast, or live performances of music even in the case of covers. The companies that pay the PRO's include the likes of radio and television stations, night clubs, restaurants, websites, malls, any place that plays music publicly. Private use is exempt in this case.
So, every time a registered song is played in one of these places, royalties are owed to the copyright owners. In turn, the PRO's collect royalties and then pay the royalties minus some minor operational fees to the "copyright holders" and "publishers". Therefore, when becoming a member as an author, by default you have to register as a publisher as well IF you do not have a publisher that already administers your work. Factors like how you filled out your Split Sheets (part of a prior blog post) and whether you have your own publishing company will affect the amount of your royalty payment. Most places that play music publicly like malls or restaurants, purchase a "blanket" or general license that gives them access to the PRO's entire library, rather than purchasing individual licenses per song. Although, some places may do that if they don't use a lot of music, and they will have to contact the publishers and authors one by one IF they choose not to get a blanket license from the PRO's.
Now, how PRO's keep track of which songs are played at any time in order to get accurate records for royalty distribution? Each PRO (ASCAP, SESAC, and BMI) uses a variety of methods, and sometimes these methods are a matter of contention giving how arduous a task it would be to track individual song plays. As a general rule, radio and TV stations are audited with a varying combination of sample surveys, program schedules and playlists from their broadcasts and the information on which songs were played is pretty accurate. Also, these entities report as part of complying with copyright and broadcasting law to companies that crunch numbers for marketing and other purposes. Places like restaurants and stores, usually pay a flat rate and the money collected from them goes into a royalty pool and its distribution is based on other calculations done by the PRO's. As you guessed, this has also brought controversies as to which PRO has a better method.
Talking briefly about the specific PRO's in the US, there are 3 main Performance Rights Organizations. ASCAP, BMI, and SESAC. As a songwriter, you can only register your songs with one of them.
ASCAP, or the Association Society of Composers, Authors and Publishers was founded in 1914 and is the oldest PRO. Their current membership is comprised of over 470,000 composers, songwriters, lyricists and music publishers. Currently, they charge a one-time fee of $50 to register as a writer, and $50 to register as a publisher. In order to collect your publisher's share of royalties as an ASCAP member, you need to have an ASCAP publishing company.
BMI, or Broadcast Music Inc was founded in 1939 with more than 600,000 members. A lot of songwriters register with BMI, because it's free. Registering as a publisher currently costs $250 though, but you don't need to be a publishing company to collect your publisher's share of royalties at BMI.
SESAC is the only performance rights organization in the US that's not open to all songwriters. Instead, they "invite" songwriters to join, and until they offer that invitation back to you (or accept you!), you will need to wait to become a member. In other words, it is not automatic. They're very selective and according to SESAC, this lets them nurture personal relationships with their songwriters and publishers. They are also the only for-profit. SESAC is always open to hearing new material, so do not detour from wanting to give them a try when ready to join a PRO.
As mentioned, these PRO's are US based, however, they have relationships with other PRO's around the world that work in collecting foreign performance royalties. Remember not to get confused with the word "performance", PRO's ONLY collect performance royalties for authors and their publishers, not royalties for the performers of the songs. This last process is done by another organization which we will talk about in a future post.
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