“Are you registered with ASCAP or BMI?” If you’re a songwriter or composer then you’ve more than likely come across this question before. And, if you’re an amateur then you probably have no idea what these seemingly random assortment of letters mean.
Performing rights societies: crash course
ASCAP and BMI are two of the leading Performance Rights Societies and Organizations in the US. In the states there’s also SESAC, SoundExchange, and ACEMLA (Puerto Rico). In a nutshell, PROs like the aforementioned collect performance royalties and pay songwriters, composers, lyricists, and music publishers what they’re owed for their compositions. U.S. Copyright law categorizes a performance as any music that is played outside a normal circle of friends and family. PRO’s were born in the day of radio. Back then, the radio was a very disruptive technology and seen as a threat to the publishing and recording industry. Both were concerned that with live performances being played into peoples homes, there would be a considerable drop in record sales which would eat away at mechanical royalties (sound familiar?). Therefore Broadcast Music International (BMI) and the The American Society of Composers, Authors and Publishers (ASCAP) were formed to monitor the broadcasting of songs and collect royalties on behalf of their member composers and songwriters. When your song is played on the radio, performed in live venues, used in television or commercials, etc. that qualifies as a performance for which you should receive royalties. The royalties are for compositions only and are split between the performing arts copyright holders which are, for the most part, writers/composers and publishers.
SoundExchange is another performance rights organization. The role of SoundExchange is to collect the royalties from electronic mediums and distribute them to the rights owners. It was formed to collect royalties for webcasts and other digital performances (Spotify, YouTube, Pandora). Digital broadcasting forums must pay also royalties to the songwriters and publishers for the songs they play. They also must pay royalties to the recording artists after the Digital Performance Right of Sound Recordings Act was established in 1995. This payment to artists is a big differentiator when compared to traditional royalty collection and payment. ASCAP, BMI and SESAC only pay writers and composers.
Music royalties have become a bit of a hairy subject with streaming services like Spotify and Pandora gobbling up a large portion of music consumers; the cheap and legal model is looking to become the bridge between those who pay for music and those who don’t. Last year, Spotify revealed a list of some of the top music earner’s royalty checks from purely digital streams on their platform. Take a look at some of those numbers from 2013:
1. The Monster / Eminem / 35.1 million streams / $210,000 – $294,000
2. Timber / Pitbull / 32.0 million streams / $192,000 – $269,000
3. Lorde / Royals / 65.3 million streams / $392,000 – $549,000
4. OneRepublic / Counting Stars / 57.7 million streams / $346,000 – $484,000
5. Avicii / Hey Brother / 46.5 million streams / $279,000 – $391,000
6. Miley Cyrus / Wrecking Ball / 60.4 million streams / $363,000 – $508,000
7. Katy Perry / Roar / 64.6 million streams / $388,000 – $543,000
8. Avicii / Wake Me Up / 152.1 million streams / $913,000 – $1.3 million
9. Drake / Hold On, We’re Going Home /47.1 million streams / $283,000 – $396,000
10. Ellie Goulding / Burn / 53.8 million streams / $323,000 – $452,000
Aside from being shocked that so many people were actually listening to “Timber,” that seems like a pretty decent chunk of money right? Luckily there are music publishers to make sure that writers and composers get paid for services like Spotify using their music. Though the news coming out streaming services has received the most attention, there is a huge amount of business being conducted in the music synch sector of the industry. As mentioned above, every time a musical cue is played on television or radio, and films (non-U.S.). That is a lot of music that is collecting royalties. Even royalty free music collects royalties! huh? We’ll save that for another chat.