For independent artists, navigating the world of music copyright and performing rights can be confusing. However, it’s essential if you’re looking to reap the revenues you’re entitled to. The good news is that performing rights organizations (PROs) are on hand to make life a little easier for independent musicians.
PROs act on behalf of publishers and songwriters, collecting public performance rights. Think you’re not yet established enough to enjoy the benefits of signing up with a PRO? Think again. Far from being the underdogs of the music industry, independent artists enjoy a surprisingly significant market share. According to a recent study, independent labels and artists make up around 43% of total music revenues.
For songwriters, PROs make it easier to unlock revenues every time a song is performed publicly or broadcast. How does this work? PROs have an extensive catalog of music, charging a fee to live performance venues, businesses, and radio stations who wish to use tracks from said catalog. To do this, PROs keep track of how often a song is played, making quick work of determining what music royalties are due. PROs also take charge of royalty collection, before distributing it to all relevant parties.
Generally speaking, every original track has two music copyrights attached. Publishing or composition rights relate to the lyrics and music of a track. This means that an original composer still maintains the music publishing rights to covers of their songs. Master rights apply to the recording itself. Both copyrights can generate public performance royalties. Any time a song is played on the radio, performed live by another artist, or played in public, publishers and songwriters can benefit.
Role and Function of Performing Rights Organizations
While streaming royalties and live shows tend to generate the most revenue for independent musicians, performance royalties shouldn’t be overlooked. In 2022, performance rights organization ASCAP recouped more than $1 billion in performance royalties in the United States alone.
Any artist that’s thinking about making their music available for public use should consider registering with a performing rights society. A PRO will take care of music licensing and royalties, enforce the conditions of that license, and take charge of collection and royalty distribution.
Before public performance rights can be enforced and royalties can be collected, compositions need to be licensed. However, there’s no one-size-fits-all license here. Blanket licenses are typically granted to radio broadcasters. For a single annual fee paid to a performing rights organization, a broadcast licensing agreement means radio stations are free to play just about any track.
When it comes to streaming services, things are a little different. In most cases, a PRO will negotiate unique terms with a streaming platform, with license fees determined as a percentage. Live venues, such as clubs, bars and restaurants, also usually have to seek a blank license agreement.
Monitoring Music Usage
No matter what type of license has been issued by a PRO, the end user needs to report back with their usage of licensed music. For a radio station, this can take the form of broadcast logs. For live performance venues, things like set-lists are generally accepted as evidence. In the case of streaming services, usage metrics are usually determined by referring to consumption reports.
Determining Royalty Rates and Calculations
Performance royalties are typically split equally into publishing and songwriter royalties. In every agreement, the original songwriter will always receive 50% of the overall royalties. With publishing royalties, things are a little different.
If you’ve signed an agreement with a music publishing company, it’s this entity that will generally receive the remaining 50% of performance royalties. However, this only applies for the duration of your contract. If you haven’t entered into such an agreement, you’re eligible to claim these remaining publishing royalties yourself.
Main Performing Rights Organizations (PROs)
In the United States, there are three main performing rights organizations you’ll want to consider using:
This non-profit PRO is managed by publishers, composers, and songwriters. It’s generally seen as one of the most reputable players in the industry, with members having a say in who is elected to the board. As of 2023, ASCAP has more than 920,000 members. If you’re joining as a publisher and writer, you won’t have to pay when signing up with ASCAP. If you’re looking to join as a publisher, you’ll have to pay a one-time processing fee of $50.
ASCAP is one of the most reliable PROs on the planet. This performing rights organization has licensed more than 18 million songs and uses advanced technology to process more than a trillion performances annually. This makes them more active than any other PRO.
As well as taking charge of usage and royalty collection, ASCAP offers a host of other benefits to members. The PRO offers everything from musical education to instrument and studio insurance.
BMI is another non-profit organization based in the US. Currently, this PRO works with more than 1.3 million creators and has licensed more than 20 million tracks. Songwriters can join BMI for free. However, if you’re joining as a publisher, you’ll need to pay a one-time fee of $150. For companies, a one-time fee of $250 is required.
BMI Music is a good choice for songwriters looking to protect their intellectual property, with robust music copyright management protocols in place. With relatively fast payouts, it’s one of the best choices for emerging artists looking to unlock revenue streams. What’s more, this PRO boasts several tools that can help aspiring musicians increase exposure.
As well as taking care of performance royalty collection, BMI membership comes with many perks. Members can access discounts with BMI affiliates and songwriting services.
Unlike the other two major PROs in the US, SESAC is a for-profit company. What’s more, membership is fairly exclusive. As of 2023, SESAC has around 30,000 members. If you’re looking to join, you can’t simply apply. Instead, you’ll need to receive an invitation. Unsurprisingly, this makes it one of the least popular avenues for unsigned talent.
SESAC grants licenses to all broadcast entities and establishments. Robust music copyright protection clearance authorization means artists can be confident that they’re receiving their fair share of performance royalties.
One of the biggest perks of SESAC is that this PRO deposits royalty payments directly. However, there are many other benefits of this PRO. Members can enjoy discounts on everything from magazine subscriptions to airport parking.
Collective Management Organizations (CMOs) and PROs
Some people assume collective management organizations (CMOs) and PROs are the same thing. However, while PROs focus solely on performance royalties, CROs are tasked with collecting mechanical royalties as well.
It has to be said that most CMOs go the extra mile for their clients. If copyright has been infringed upon, a CMO can take action to enforce these rights. Nowadays, CMOs are largely considered a subtype of PROs.
Unsure of whether to register with a CMO or PRO? While PROs and songwriters are a good fit if you’re looking to collect performance royalties, you’ll need to become a member of a CMO if you know you’re owed mechanical royalties as well.
PRO Membership Benefits for Songwriters
While the main function of a performing rights organization is to collect royalties on your behalf, a good PRO can do a lot more for you. Becoming a member of an established PRO can help you force important industry connections, bringing you the benefit of representation and expanding your reach into new territories.
Have you been composing and recording music for several years? Even if you’ve yet to release that material, you’re sitting on a potential goldmine. By registering with a PRO, you can start monetizing your music catalog.
Few music usage measuring systems are perfect. However, the best PROs use advanced technology and royalty management software to ensure accurate reporting of licensed use.
Now’s the Time to Start Using a Performance Rights Organization
Many artists struggle to manage all aspects of their career when releasing music independently. In order to capitalize on as many revenue streams as possible, it’s important that your songs are registered in the right places. However, this can be a time-consuming endeavor for musicians who are already struggling to find enough time to manage their brand online, commit to practice, and put in the hours on the live performance circuit. Performance rights organizations take charge of the collection of performance royalties, ensuring publishers and songwriters always receive their due.
With IndieFlow, registering your music with performance rights organizations couldn’t be simpler. Once you’ve registered with the appropriate organizations, royalty management becomes a hassle-free experience. Adding collaborators to your tracks takes moments, with automatic royalty splits ensuring everyone receives exactly what they’re owed. With more money in the bank, you’re free to focus on taking your career to the next level.