How to Collect Royalties from Your Music: Performing Rights Organizations
By Geryah Dingle
In this article I am going to explain the major U.S. Performing Rights Organizations (PROs), American Society of Composers, Authors, and Publishers (ASCAP), BMI (Broadcast Music Incorporated), and Society of European Stage Authors and Composers (SESAC), what they do for you, the ice burgs that make royalty collection such a hassle, my personal experience with my PRO of choice, and why you need one in your life.
Now, What is a Performing Rights Organization?
It’s a type of collective management organization or more broadly known internationally as a copyrights management organization (CMO) that deals primarily with royalties due for the public broadcast of music works.
It’s basically an intermediary for the collection of your music royalties. Because. like most things in life, no one wants to deal with you or me for that matter. Therefore, we need a middle man so to speak to act between copywriter holders and those parties who wish to use our copywriter works publicly in various locations, shopping, and dining venues.
What Do PROs Collect?
These types of organizations deal with public performance royalties anytime your music is played in public and can deal with mechanical— royalties that are generated whenever copyrighted compositions are reproduced, such as those distributed via mediums such as CD, cassette, or vinyl. If you happen to be playing live, sorry streaming live from your home studio doesn’t count, however, you can send in a copy of your setlist and receive royalties from your very own public performances.
Who Are the Key PRO Players (US)?
1. ASCAP
ASCAP: American Society of Composers, Authors, and Publishers and it was founded back in 1914. It was the first PRO in America and it was started by composers, songwriters, and publishers. They also have agreements with 83 foreign PROs so if your music is played oversees there is a high likelihood you will receive the royalties from those plays too.
2. BMI
BMI: Broadcast Music Incorporated founded in 1939. It was started by members of the broadcasting society. They have agreements with 93 foreign PROs as of 2019, and that is 10 more than ASCAP if that’s something that’s important to you.
3. SESAC
SESAC - Originally the Society of European Stage Authors and Composers, is a for-profit performance-rights organization in the United States. It’s an exclusive by invite-only PRO so don’t worry about that one unless you’ve really hit it big. Then, maybe you can make a YouTube video and tell us all about them.
So, How Much Does It Cost to Join a PRO?
If you’re not familiar, I’ll dive deeper into it in another video, however, there are two sets of royalties associated with every song: You have the song writer royalties and then you have the publishing royalties. If you don’t have a publishing deal, which is the case for most Indie-Musicians just starting out, you likely own your own publishing.
ASCAP requires you to pay a separate fee to register as a songwriter and publisher - even though you’ll be collecting them both. They charge a one-time $50 registration fee for writers and the same for publishers. They pay out quarterly and offer direct deposit, but you need to have built up at least $100 in royalties before it will pay out direct deposit. They also pay their writers and publishers at varying times, which makes it difficult if you run your own publishing to balance your books concurrently with coinciding payments. You also have to sign an agreement that constantly references their articles of association which, unfortunately, are subject to change at anytime.
BMI charges $0 for you to register as a song writer and up to $250 as a one-time payment to register as a publisher. The fee is $150 if you’re registering as an individual and $250 if you’re registering as a partnership or corporation. They also offer direct deposit and payout quarterly. However, they pay their writers and publishers at the same time so it’s easier balance your books if you’re managing it all yourself. They also require members to sign an agreement, but unlike ASCAP, the terms are pretty much set in stone.
The Cons of PROs
While the concept of a PRO is pretty awesome, they don’t always get it right because the system, itself is flawed, and usage reporting of your music’s plays is skewed by a number of factors such as corrupt metadata and human errors. That’s why some artists and very successful musicians have someone to manage their publishing administration for them and fight on their behalf to maximize their royalties and make claims. In theory, you want to register in as many places as possible to collect all your royalties and get a little closer to real-time radio airplay accuracy. Realistically, however, you can only track so much and you may end up doing much of the heavy lifting in the early stages of your musical career. You can also integrate yourself even more in the process by starting your own publishing company or registering with an organization called SongTrust for publishing administration (but more on the PROs and Cons of that approach in a future article and/or video).
So, Why Should You Care About PROs?
Well, even if money is not a factor for you, PROs do more than just collect royalties on your behalf, and that’s not all royalties, some of which you’ll need a publisher or other CMO to deal with. However, they also license the use of the rights they manage to music users, they monitor the licensed use of your content in order to enforce the licenses conditions, and they collect and distribute royalties payable as a result of authorized use. So, you kinda’ need one. But as in most things in this industry, don’t spend too much time fretting over which one you would like to pick. Decide what’s right for you, get started, and move on. I’ll leave a link to a freemium if you’d like to learn more about the PROs.