Jess S. Morgan & Company, Inc

Business Managment & Invesment Advisory Services

Songwriters and the Importance of Performing Rights Organizations

04-18-2014 / By: Ben Edmonds

If you are a songwriter and are not yet affiliated with a Performing Rights Organization (PRO), it might be time to consider signing up.   PROs, such as ASCAP and BMI, collect royalties on behalf of publishers and songwriters for the public performance of their music through a wide variety of sources.  These sources include the performance of music on television, radio, live music venues, clubs, new media, restaurants and retail outlets, and just about anywhere else that you hear music being played in public.  The PROs remove the burden from individual songwriters and publishers of having to issue licenses to and collect royalties from what would be an overwhelming number of sources.

In order to join a PRO, you must be able to verify that you have at least one work that you have written or co-written, that has either been released (physically or digitally as part of an EP, album or as a single download) or has been performed publicly in a venue that has a license with a PRO (i.e. a live music venue).   That being said, if you are currently recording songs onto your computer at home and have no plans for a release or live performance, you do not need to affiliate with a PRO.  Once your membership has been approved, you will be able to register all of your songs with the PRO in question on an ongoing basis.

Upon making the determination that it is time to affiliate, you need to consider which organization you wish to join.  In the U.S., there are three PROs for composers/songwriters: ASCAP, BMI and SESAC.   There are some differences in the way each operates.  ASCAP was established by a composer, Victor Herbert, in 1914 and is member-operated as a  not-for-profit organization.   BMI, also a not-for-profit organization, was established in 1940 by the National Association of Broadcasters in order to provide a cheaper alternative - cheaper for the broadcasters that is - to ASCAP.  SESAC, while far smaller in size than ASCAP or BMI, differ in that their membership approval process is more stringent than that of ASCAP and BMI.  Furthermore, SESAC is a for-profit organization.

In terms of pay-outs, each organization keeps their royalty calculation methods a closely guarded secret, so it can be difficult to make a definitive determination on where you will be better off based on a forecast of what you might earn.  However, there are some differences between the societies, based on the genre you operate in, which is something you should consider.  For example, BMI has a strong presence in Nashville and endeavors to pay its country music songwriters the most competitive royalties in the industry.  BMI also has a classic rock bonus based on radio play, while Top 40 songwriters at ASCAP who have smash hits might be eligible for significant bonus payments.

At Jess S. Morgan & Company, we act as on behalf of our clients in all of their dealings with their respective PRO.  If you have any questions related to any of the issues discussed above, please feel free to contact us. 


 
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