What’s All The Hype About Royalties?
No musician can afford to miss out on a potential source of income. So if you’re a songwriter, and not a member of a Performance Rights Organizations (PRO) like ASCAP, BMI, SESAC, or SOCAN (Canada), you could be leaving money on the table. It’s not difficult to join one of these organizations, and as an independent, there are ways to enroll that allow you to maximize your royalties.
Get Registered Today
Why PROs exist: public performance equals payment
Now that you are a song copyright owner, you might be wondering what this means. What kind of control do you have over
your music? How can you get paid when it’s used?
It all begins when you make a song available to the public – such as making it available for sale on CD, uploading it to your website, or posting it to your MySpace or ReverbNation page. Once you do this (the law calls this “publishing’), U.S. and Canadian law allows anyone to broadcast or perform your music: you can’t say no.
Fortunately, the law also says that you’re entitled to get paid each time your song is broadcasted/performed. This includes:
|•||TV and terrestrial radio.|
|•||Public establishments such as restaurants, bars, shopping centers, hotels, theme parks, airports, etc. whether through their PA system, jukebox, or a band covering your music on stage.|
|•||Satellite, cable radio, internet radio like Pandora, or web-simulcasted radio stations. These types of public performances are considered ”non-interactive” digital-stream broadcasts – that is, they broadcast your song in a way in which the listener isn’t in control of the music that’s being played.|
|•||Flash players or other internet music players like MySpace’s music player or your own website’s player. These types of public performances are considered “interactive” digital-stream methods – they allow listeners to skip, rewind, pause, or control the song or playlist.|
There are other ways your music can be performed publicly, of course, but no matter how it’s performed, you’re entitled to a royalty from the venue or broadcaster that played your song.
In the U.S., copyright law sets the payment rate at 9.1¢ per play. If your music is performed in public a lot, that can add up. In fact, some of the indie artists we interviewed for our book – artists that you may never have heard of – pulled in checks for thousands of dollars thanks to performance royalties.
What PROs do
Knowing when your song is played is one challenge; getting paid for it is another. This is where PROs come in. Since copyrighted music is being played all the time, it takes large organizations like ASCAP, BMI, SOCAN, and SoundExchange to try to track which songs are performed, collect the money owed, and distribute the royalties to their members.
In general, those broadcasters or establishments that use music (e.g. radio stations, bars, clubs) enter into music-reporting and subscription arrangements with PROs to cover themselves for the music they broadcast and perform. In other words, they pay PROs a blanket fee for the right to perform the music in their catalogs.
Quick fact: The reason you can play “Freebird” on stage and not owe money to the copyright holder is because the venue you’re playing at pays a general license fee to one of the PROs to cover them for whatever music is played. This same license allows them to broadcast their jukebox, music-on-hold systems, whatever the sound guy plays through the P.A. system, etc.
While the PROs use many techniques to discover if a song has been played, there’s too much music for even them to keep track of. Where economically feasible, PROs conduct surveys for a complete count of what exactly has been played, for instance by gathering playlists from radio stations. Otherwise, they conduct sample surveys to give an approximation of what songs have been played and how frequently. In other words, they turn on the radio and write down the songs they hear.
Unfortunately, their methods don’t work well for independent musicians. Just because your song is played doesn’t necessarily mean you’ll get paid. Of course, The more plays one gets, the greater the chance of being reported. However, most of the media that PROs currently monitor are gated off or extremely difficult for indie bands to get played on (e.g. commercial radio, which is pay to play.) So, in many ways it comes down to luck as to whether any of your performances get registered in one of their surveys. If you’re lucky enough to have that occur, however, the check can be quite sizable – anywhere from hundreds to thousands of dollars.
To address this problem, some PROs have created programs that set aside some royalties for those members who get played in media and venues that are not included in their surveys. For example, ASCAP created their ASCAPLUS Awards Program so members could report public performances of their songs directly to ASCAP. These reports are reviewed by a panel who then determine if the artist should be awarded royalties.
Quick fact: When you perform your own songs live, you technically have a right to get compensated for the performance. Unfortunately, most PROs in the United States do not survey the smaller venues where indie bands typically perform. Instead, they put money they collect from these venues into a general license fund that is distributed to PRO members based on featured performances on radio and television.
The relative cost of joining these PROs is small, and the rewards can be worth it. It simply comes down to a cost/benefit decision you need to make for yourself.
A few reasons why you would join a PRO include:
|•||You expect to get significant radio play.|
|•||You expect to get TV play (i.e. you license your music into a TV series or commercial campaign).|
|•||You or your band performs your songs live regularly.|
|•||Other bands or musicians cover your music – whether live or as a recording (which could get radio play or into a TV series or commercial campaign.|
Also, PROs provide their own incentives beyond collecting royalties on your behalf. Some offer perks such as discounts for music equipment at music retailers, career assistance, and health insurance benefits, so you’ll want to choose the best one for your needs.
Registering with a PRO (song performances)
Joining a PRO is relatively easy, but each PRO has its own registration method and (nominal) application fees, so you’ll need to visit their Web sites and contact them to register. Before you can join, they usually want you to have at least one song that you’ve written, recorded, or had performed publicly. For simplicity, PROs encourage, and often require, membership in only one organization, so you’ll need to choose the one that’s right for you. Once you join, membership allows you to register information online about your songs so the PRO knows which songs to track in their surveys.
Registering with a PRO (recording performances)
If you own your recordings – which most indies do – you should also register your recordings with SoundExchange, the PRO that obtains performance royalties for sound recordings. Since sound-recording rights are different from the song rights, you can join this PRO in addition to one of the song-performance PROs. This type of royalty is rather new and the subject of much discussion and negotiation. Sign up as a “sound-recording copyright owner” and designate the “featured artist” for the sound recording – usually you or your band – since royalties are split between the two. If you don’t register both, this too will result in lost royalties.