The other day I received an email notification that my Performing Rights Organization (aka PRO) deposited money into my business account. Needless to say, I was excited when I saw my royalty statement. However, that wasn’t always the case. I have been a member of my organization for a while, and for years I did not see a check or a direct deposit notice even though I was performing my music, and others were performing and playing my songs. As a matter of fact, I left money on the table for years before I wised up and figured out what I needed to do to actually make money as a songwriter. You see, I thought all I had to do was copyright my songs and register them with my PRO and they would do the rest. That’s not really how it works. In this post, I will tell you what a PRO is, talk about the benefits of signing up with a PRO, and give you some tips on how to maximize your opportunity to make money with your music.
Before I delve into the importance of Performing Rights Organizations, it’s important that I give a little background about what a copyright is, so you can better understand the need for a PRO. When a person creates an original work, they are considered to be the copyright owner of said work. This simply means that person owns the rights to the work and any copies of that work. If a person’s work is published, meaning copies of the person’s work is distributed to the public in some way, permission to do so must be granted by the copyright owner. Another right that the copyright owner has, is the right to perform or display a copyrighted work or authorize others to do so. That’s where Performing Rights Organizations come in.
In the United States of America there are three major Performing Rights Organizations: ASCAP (aka American Society of Composers, Authors and Publishers), BMI (aka Broadcast Music, Inc.) and SESAC (once known as Society of European Stage Authors and Composer). A fourth one that was founded in 2013 is Global Music Rights. These organizations issue blanket licenses for nondramatic rights (aka small rights) to terrestrial radio and television stations, restaurants, clubs, interactive (meaning you can choose your music) digital music services and other businesses that perform music and make money with publicly performed music. Here is a small list of the kind of music services that these PROs collect royalties from:
- Apple Music
- Live Performances
- Terrestrial radio (AM/FM)
With a blanket license, a business can perform any of the songs in a given Performing Rights Organization’s catalogue without having to get permission to perform songs on an individual basis. The licensing fee varies depending on the kind and size of the business. After the PROs collect the licensing fee, they pay the songwriters, composers and publishers that belong to their particular organization the share of the fees that belong to them. You can find out more about how they do that by going to their websites. It is important to note that ASCAP, BMI, SESAC and Global Music Rights are different organizations and have different catalogues. If a business wants to perform music from songwriters, composers or publishers from various PROs, the business must have a license from each PRO. This may seem like a hassle, but it’s much better than a business having to negotiate licensing fees with the copyright owner and/or publisher of each individual song that a business performs or plays publicly.
In addition, a songwriter, composer or publisher can only belong to one of the above Performing Rights Organizations at a time. However, there is an organization that is technically a Performing Rights Organization, but the rules are a little different than those mentioned previously. The organization is called SoundExchange. One thing that differentiates this organization is that every music creator, no matter what other Performing Rights Organization she is affiliated with, can be a SoundExchange member. SoundExchange collects “noninteractive” (meaning you cannot choose your music) digital performance royalties for performers and recording labels. Remember, the other organizations collect performing royalties for songwriters, composers and publishers. Here are few businesses that pay royalties to SoundExchange:
- Pandora radio
- Spotify radio
- Beats 1 (a service provided by Apple Music)
- Audio-only music channels like Music Choice
- Webcasters (like AM/FM radio stations that stream music from a website)
If you want more information about SoundExchange, visit the website https://www.soundexchange.com. The following information will show you how they disperse their royalties:
- Rights Owners (50%)
- Featured Artists (45%)
- Non-featured artists (5%)
*Non-featured musicians are made up of side musicians and session players.
Now that you have a little information about how Performing Rights Organizations operate, let’s talk about how you can make money. First, you should research the Performing Rights Organizations and determine which one out of ASCAP and BMI you desire to be affiliated with. Remember, no matter which one of these you pick, you still want to join SoundExchange. By the way, SESAC and Global Music Rights’ membership are by invitation only. Feel free to research them, as well. However, they do not take unsolicited membership applications. After you pick the best PRO for you, you need to fill out the membership form, a W-9, Direct Deposit form and register your works.
Many people stop there, but if you are a performer you should also report your live performances to your PRO. When I perform, I sing a good mix of originals and cover songs. I report my set list(s) to my PRO. After my PRO confirms my performance, they distribute royalties to the songwriters and publishers that are in their catalog based on the songs that I performed. That includes me.
Live performances are just one stream of income. However, as I mentioned earlier there are other income streams available through your PRO. Radio stations have tracking sheets or logs and other technology that help the PROs keep track of what songs are being played. Television stations use cue sheets. PROs pay royalties based on a sampling of the performances played on radio and television station, so if your music is on light rotation you may not see any money from them but don’t lose hope. Anything is possible.
You may be wondering when you should expect to see a check or direct deposit notification from your PRO. To answer that, you need to go to your PRO’s website. Each PRO has a different payment schedule, so make sure you know your PRO’s payment schedule. After you have reported your live performances in the United States and the licensees have given their reports, you can expect to see payment within 6 months. If your music is performed in foreign countries, payment can take up to two years. Be patient.
If you want more detail on how ASCAP and BMI calculate payments and their payment schedule, here are the links to help you out:
Unless you have been invited to become a member of SESAC or Global Music Rights, you cannot see their royalty payment information. However, if you want to find out a little more about them here are the links to their sites:
Global Music Rights: https://globalmusicrights.com
I hope this information was helpful. Please leave any questions or comments that you’d like to share in the comment section below. Have a beautiful and productive day!