One of the greatest sources of long- and short-term income for songwriters and publishers is the royalty money received from performing rights societies around the world. Of the $5-billion generated worldwide each year, the three U.S. organizations account for close to $2 billion in collections. The two largest U.S. performing right organizations are the writer- and publisher-owned American Society of Composers, Authors and Publishers (ASCAP) and the broadcaster-owned Broadcast Music Inc. (BMI).
These organizations negotiate license-fee agreements with the users of music (radio and TV stations, cable stations, concert halls, wired music services, airlines, websites, etc.), which give the user the right to perform the music and lyrics of any member of these organizations. The fees then collected are distributed to the writers and music publishers whose works are performed in the licensed areas.
This performing right is one of the most important rights granted by a country's copyright laws. It is based on the concept that a writer's creation is a property right and that a license must be acquired by any user of music in order for that user to perform a copyrighted musical work.
This performing right is one of the most important rights granted by a country's copyright laws.
In the U.S., the primary types of music use which generate performance royalties are feature performances (a visual vocal or visual instrumental on TV, a radio performance of a song, etc.), underscore on television series, specials, movies of the week and feature films, theme songs to TV series, TV logos and promos, advertising jingles, live concerts and copyrighted arrangements of public-domain compositions, among others.
The value of each type of music use varies depending on which performing-right organization the writer and publisher belong to as all three organizations have different payment rules, contracts and philosophies.
Complicating matters further is the fact that two of the three organizations (ASCAP being the exception) change their payment rules without notice to their writers and publishers. Also, two of the three U.S. organizations (ASCAP again being the exception), do not give writers and publishers a voice in their organization, nor do they allow writers and publishers to be on their Board of Directors or vote for their Board of Directors.
Considering these numerous variables and nuances, as well as many others, it should be obvious that knowledge of the U.S. rules is essential for any creator, representative, or publisher.
In joining a U.S. performing right organization (PRO), you must make sure that your U.S. organization has agreements and good working relationships with and knowledge of all the PROs in all other countries, as that is how foreign performances of a U.S. writer's works are identified, collected and distributed.
The foreign society (i.e. PRS in England, SOCAN in Canada, APRA in Australia, GEMA in Germany, JASRAC in Japan, SGAE in Spain, SACEM in France) will collect for U.S. writers' works performed in their country and forward it to the writer's U.S. PRO. If a publisher does not have a foreign sub-publisher collecting their share in each country, foreign PROs will forward the royalties to the publisher's U.S. performing right organization.
The U.S. PROs similarly collect performance monies for foreign society writers and publishers whose works are performed in the U.S. The monies collected are sent to the foreign society (PRO) that the writer or publisher is a member of. For example, if a United Kingdom writer who is a member of PRS has performances of his or her songs on U.S. radio or television, the royalties will be collected by the U.S. PRO (e.g., ASCAP) and sent to PRS in England which will then pay the writer.
The financial importance of the performing rights area cannot be overemphasized - the fact is, a fortune can be made from a single composition. For example, in just a few years, the #1 song of the year can generate a $2 million writer and publisher payout; a successful TV-series theme song can generate numbers in excess of $1.5 million over a 10-year period; and the score of a top box-office film can generate well over $2 million in performance income during its copyright life. Although most writers never achieve this level of success, it's helpful to know what's possible at the top end.
© 2008 Todd Brabec, Jeff Brabec
For more information, check out the book Music, Money and Success: The Insider's Guide To Making Money In The Music Business (Schirmer Trade Books/Music Sales/502 pages) available for sale at Amazon.com, Barnes & Noble, Borders, Music Sales Group and www.musicandmoney.com.