The PRiMER … Introduction to Performance Rights Organisations -
“It is telling that more than 75% of inductees into the Rock and Roll Hall of Fame are BMI songwriters”In this edition of The PRiMER we introduce performance rights organizations (PROs) by detailing their role and importance to artists and composers, and also offering brief histories of the key players ...
The Role of the Performance Rights Organisation
To represent the right of songwriters, composers and publishers to be compensated for having their music performed in public there exists performance rights organisations or PROs.
If you consider that there are 8 billion public music performances every year within the UK alone, it’s obviously beyond the means of the average songwriter or composer to collect their royalties single-handedly, and as such must be carried out by a third party administrator.
In the USA an artist has a choice between three - BMI, SESAC and ASCAP - but in most countries the choice is usually limited to one.
Once the artists have signed to a PRO, the organisation will then negotiate with the users of the artists' copyrights the royalty rate to be paid for such use.
By securing a blanket license from a PRO, music users - such as television and radio stations, auditoriums, pubs or bars, hotels or theme parks - can legally play any song in their library. Without a license, they would risk the dangers of copyright infringement.
The cost of the licence can depend on a wide variety of factors, such as the size of the venue, box office receipts, or whether the music is being used to attract customers – such as with DJs - or merely as background.
PROs also collect performance rights income from other countries around the world. Most foreign countries have at least one and they will pass on royalties generated by foreign performances to the relevant PRO to distribute to its members.
The PRO is also in charge of calculating and paying out the royalties due to its members. This payment would normally include a deduction to pay for the administration costs of the organisation. These administrative duties include tracking of public performances by researchers.
As it would be impossible for even dedicated researchers to track down the billions of public performances every year, market research and statistical models are also used in order to carry out the operation as efficiently and accurately as possible.
These efforts are not necessary when dealing with the major television stations and the larger commercial radio stations, as they are expected to provide detailed reports of all the music that they have played. The smaller TV and radio stations are usually only monitored on random days in a year, and these listings are then taken as being representative of the station’s entire output.
The PRO pays out royalty distributions to its members on regular dates throughout the year. PRS and ASCAP for example, currently both pay out four times a year.
The American Society of Composers, Authors, and Publishers (ASCAP) is one of three US performance rights organisations.
ASCAP lays claim to being the only US performance rights organisation to be created and controlled by composers, songwriters and music publishers and to have a board of directors elected by and from the membership.
Its membership association is comprised of more than 260,000 US composers, songwriters, lyricists and music publishers from a wide variety of music. It also represents hundreds of thousands of music makers worldwide, as a result of agreements with affiliated international societies. In 2005 ASCAP collected $749 million in licensing fees.
With a repertoire including pop, rock, alternative, country, R&B, rap, hip-hop, Latin, film and television music, folk, blues, jazz, gospel, Christian, new age, cabaret, dance, electronic, symphonic and a great many others, ASCAP proudly boasts that it represents every kind of music.
On February 13, 1914 at New York’s Hotel Claridge, ASCAP was born. Established by a group of music makers, its primary purpose was to make sure members of their profession were compensated fairly for the public performance of their works, and that their rights were duly protected. And so from that day onwards the democratic ideals that are still in existence today were set in motion.
Five years later, ASCAP and the Performing Right Society (PRS) in the UK signed the first reciprocal agreement for the representation of each other's members' works in their respective territories. This would be the first of many such agreements across the world.
The 1920s saw a swift rise in prominence for ASCAP. As the decade began it had just managed to cover its running costs and make its first distribution to members but by the end, the radio revolution that shook the USA had turned this modest enterprise into a powerful organisation.
This golden era for ASCAP was shaken up a decade later when radio broadcasters voiced objections to an increase in ASCAP’s licence fees. In a ploy to keep down the cost of music for the radio industry, the broadcasters challenged ASCAP’s monopoly by forming their own rival performance rights organisation, BMI.
1975 saw the birth of the ASCAP Foundation. Its ongoing mission is to nurture young songwriters and composers and preserve the legacy of the past with the aid of a variety of educational, professional and humanitarian programmes.
In the 1990s ASCAP rode the wave of internet-related technological growth by introducing ACE, the first interactive online song database, and EZ-Seeker, software for tracking internet performances. They were also instrumental in the passing of the US Digital Millennium Copyright Act (DMCA).
Broadcast Music, Incorporated (BMI) is a non-profit making performance rights organisation. It collects license fees on behalf of its songwriters, composers, and music publishers and distributes them as royalties to those members whose works have been performed.
Representing over 300,000 songwriters, composers and publishers in all genres and oversees a repertoire of over 6.5 million compositions, BMI’s impressive artist roster includes legends such as John Lennon, Willie Nelson, Thelonious Monk and Antonio Carlos Jobim.
The spark that led to the birth of BMI was the proposed increase in the fees paid to ASCAP by the radio industry for the use of their music. A group of radio executives met up in Chicago in 1939 with the intention of founding a competition to ASCAP’s monopoly of the music licensing market.
Their creation would open up opportunities for young writers and publishers, and provide an alternative source for broadcasters. BMI’s first offices opened in New York City on February 15, 1940.
Over the next few decades, BMI’s role in the democratisation of the music industry increased further when they became an instrumental force in assimilating neglected musical forms, such as country, rhythm & blues and rock ‘n’ roll, into the American commercial mainstream.
It is telling that more than 75% of inductees into the Rock and Roll Hall of Fame are BMI songwriters; a testament to the organisation’s pioneering efforts in this field during the 1950s.
Their groundbreaking work in bringing ignored genres to the masses has inspired BMI present claims of being the first performance rights organisation in the US to represent songwriters of blues, country, jazz, rhythm & blues, gospel, folk, Latin and rock ‘n’ roll.
In 1985 BMI founded the BMI Foundation, Inc., a non-profit corporation dedicated to encouraging the study, performance and creation of music through scholarships, internships, grants, commissions and awards.
In addition to the Foundation, BMI has an established tradition of honouring and supporting the creators of all genres of music, in particular those future generations of musical creators.
It has contributed significant professional or financial support to BMI Student Composer Awards, the Museum of Broadcast Communications, BMI Lehman Engel Musical Theatre Workshop and the Rock & Roll Hall of Fame, amongst many others.
The smallest of the three US performance rights organisations, The Society of European Stage Authors and Composers, or SESAC, works on behalf of songwriters and performers to detect the unlicensed playing of songs, to collect royalties and negotiate licenses, and to pay their members.
The company’s corporate headquarters are to be found in the heart of Nashville’s Music Row and house all of the company’s divisions from creative to licensing to administration. SESAC also has offices in New York City, Los Angeles, Atlanta and London.
Although the smallest of the three performance rights organisations in the United States, SESAC believes that its modest size allows it to develop intimate relationships with its publishers and songwriters. The organisation’s affiliates have included such luminaries of 20th century music as Bob Dylan, Neil Diamond, U2 and Jimi Hendrix.
Whereas ASCAP and BMI operate on a non-profit basis and distribute all performance royalty income to their composer and publisher affiliates (minus an administrative fee), SESAC retains an undisclosed amount of performance royalty income as profit.
SESAC is generally regarded as being most exclusive of the three organisations, and usually demands a certain degree of success within the industry before an application to join is accepted. SESAC prides itself on its selective membership, and claims that as a result its roster of affiliates are able to develop close relationships with the SESAC staff.
SESAC was founded in 1930, sixteen years after ASCAP and nine years before BMI. Its name derives from the fact that the organisation originally set out to support the European artists that, in the earlier part of the 20th century, were underrepresented in the USA. In these early years SESAC also catered for gospel music, a local genre that was neglected in its homeland.
As BMI and ASCAP broadened their scope, to include the foreign markets and some of the more undervalued genres that were once SESAC’s speciality, SESAC did likewise and began to extend their musical range into more common ground between the three organisations.
2006 saw SESAC open a new office in Atlanta, a move inspired by the burgeoning R&B scene in the city.
PRS for Music is an operational alliance between the two non-profit UK royalty organisations, the Mechanical-Copyright Protection Society (MCPS) and Performing Right Society (PRS).
Despite being bound together in the Music Alliance, the two societies remain independent in terms of income, constitution, membership and guardianship of rights.
The MCPS remains devoted to the collection and distribution of royalties to composers, songwriters and publishers for the recording of copyrighted music and the PRS remains responsible for the collection and distribution of royalties when the music is broadcast or performed in public.
The roots of MCPS can be traced back to the foundation of the Mechanical Copyright Licences Company Ltd (MECOLICO) in 1910, in anticipation of the Copyright Act 1911.
Its function was the collection and distribution of mechanical royalties due from the new gramophone companies. The Copyright Protection Society was founded a short while later, and then in 1924, the two groups merged together to become the MCPS.
The PRS emerged in 1914, in the wake of the aforementioned Copyright Act. The society was established by a group of frustrated music publishers who were tired of their music being performed publicly for somebody else’s financial gain.
Over time the membership broadened to include composers and lyricists and the licensing extended to cafés, cinemas and other public places where music is heard.
On 1st January 1998, the two societies were officially bound together in the Music Alliance. This tie was born out of a shared business vision of creating a world class rights administration organisation in the UK.
The united front would act as a stronger force in international relations and when lobbying for their members’ rights, whilst also meaning a cut in administrative costs. The alliance has led to the foundation of a joint database comprising of over five million copyrighted works and over half a million copyright agreements showing the current UK and overseas copyright information.
Due to the difficulty of collecting royalties for public performance, the PRS must dispatch researchers to obtain first hand information and also rely on statistical methods based on actual performance information. Major users, such as the BBC and large venues, provide PRS detailed reports of the music they use but for many other venues, such as pubs and clubs, these methods are standard practise.
In 2004, the combined value of performing and mechanical rights revenues for distribution to the MCPS-PRS Alliance membership was over £475 million. Today the MCPS represents over 18,000 composers, songwriters and publishers.
Internet addresses for PROs worldwide can be found here.
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