What are performing rights organizations? How many are there in the United States? What are the type of royalties that performing rights organizations are responsible to collect and who can receive these royalties?
These questions do sound complicated however they can somewhat be simplified! Below is an overview of the key items to understand while registering with a performance rights organization.
Performing right organizations as suggested by their name collect a royalties called Performance Royalties and pay out these royalties to songwriters and publishers.
Each country in the world has a performance rights organization that is responsible for collecting royalties for songwriters and publishers . Any musical artist is eligible to receive performance royalties if you were the author (lyrics), the composer or a publisher of a work. In many cases independent artists are defacto all three!
Who are performing royalties collected from?
Performance royalties are collected from: streaming services, radio stations, TV stations, bars, venues, restaurants and more. Pretty much anytime a song is played in public the broadcaster of the song is legally obligated to report back to the PROs that the song was played and pay out a small portion for the right to play the song.
How can artists collect their royalties?
It’s pretty simple to register with a PRO and usually requires a one-time membership fee. PROs from all over the world work together in order to collect royalties from all of the different territories.
So if your song is registered with ASCAP and you have radio plays in Germany, GEMA (the German PRO would collect your royalties and transfer it to ASCAP). Just remember: PROs pay songwriters (authors and composers) not Artists who perform the song.
What performance rights organizations exist in the United States?
There are 3 main rights organizations in the US:
ASCAP – A non-profit organization managed by songwriters, composers and publishers. The board members and board of directors in ASCAP are elected by it’s society’s members. 750,000 members are registered as of 2020 and is one of the two dominating PROs in the US. You can join ASCAP both as a publisher and a songwriter for as little as $50 – one time membership.
BMI – Holds 800,000 members. Just like ASCAP, BMI is also a non-profit organization. You can join BMI for free as a songwriter but as a publisher it will cost you $150 or $250 if you’re registering as a company.
SESAC – The only for profit organization with 30,000 members. Not everyone can become a member of SESAC, you would need to receive an invitation.
Some important points to remember:
- Always remember that performance royalties are broken out into money that is paid out to both the songwriter and the publisher. We would definitely recommend to open both a writer and publisher account on a PRO to collect the two.
- Performance royalties are a completely different type of royalty then streaming royalties paid out to a distributor. It is important to remember that on top of streaming royalties that you receive from your distributor the streaming services ALSO pay performance royalties to PROs.
- To benchmark the above point for you – the royalty amount paid out to a PRO amounts to something in the ballpark of 7% in addition to what the artist receives from the distributor. So if in a given month an artist received $1,000 from his/her distributor, they should expect another $70 to be paid out to him through the PROs.
- An artist & publisher can only be affiliated with one PRO in each country & the publisher must be registered in the same PRO that the artist is. So in the case where a publisher, publishes a song on ASCAP but the artist is on BMI – ASCAP wll not be able to collect the royalties on the artist or publisher behalf.
Hope this helps in generally summarizing what performance rights organizations do and the royalties they collect on behalf of artists. Always remember that if you are an independent artist you most likely own both the artist and publisher rights and are able to collect both by registering with the organizations.
Please always keep in mind that in addition to performance royalties an independent artist is most likely entitled to receive other royalties from different organizations. More on this in our next articles!
That wasn’t THAT complicated, was it?