Posted on November 27, 2011 by Alex
If you’ve ever read the liner notes of an album (especially back in olden times when CDs were still prevalent), you probably noticed either “(ASCAP)” or “(BMI)” next to each music publisher’s name. If you’ve ever wondered what those jumble of letters means, then this article is for you.
What is the “right of performance”?
When you create a musical composition, copyright law grants you certain rights (see my “Copyright & The Music Industry” article for a broader discussion) and one of those rights is the right to perform your work publicly. Now, this right doesn’t only refer to when an artist performs a song live at a club. It also includes when a song is played on the radio, on television, and pretty much at any public place. And, because there are hundreds of thousands (if not millions!) of public places that play music, it would be practically impossible for a music publisher to grant a performance license to each and every one. That’s where performance rights organizations (or “PROs”) come into the picture.
What do performance rights organizations do?
The American Society of Composers, Authors, and Publishers (“ASCAP”) and Broadcast Music, Incorporated (“BMI”) were founded to grant performance licenses and collect performance royalties on behalf of their songwriters and publishers. (There’s also another PRO called SESAC which controls about 4% of the performance rights market in the U.S.) These PROs take the burden off the music publisher who would otherwise be bogged down with endless performance license requests and royalty collection issues. ASCAP and BMI grant performance licenses to major television networks, local television and radio stations, pay cable services (HBO, Showtime), basic cable (MTV, VH-1), online services, concert halls, websites, hotels, colleges and universities, nightclubs, bars, restaurants, theme parks, and many others. Pretty much wherever music is played publicly, you can bet that those places had to secure licenses from ASCAP and BMI.
The most common type of license granted by ASCAP and BMI is called a “blanket license” which is a flat fee allowing users to play any works in the ASCAP and BMI catalogs. The size of this fee is based on various factors such as the size of the venue, the amount of customers they expect, etc. Each blanket license is valid for a maximum of five years.
Who can join ASCAP or BMI?
There are certain requirements that you must meet to qualify for membership with either organization. However, these requirements aren’t too difficult to satisfy if you have a song that has been released for sale to the public or has gained any type of attention.
As a songwriter, you cannot be a member of both ASCAP and BMI at the same time, so it’s important to research the pros and cons of each organization and decide which is right for you.
Similarly, music publishers can’t be members of both organizations, but there is a simple way around that problem. If you have a publishing company and are planning to sign songwriters, you will need to form two separate sub-companies: one for ASCAP writers and one for BMI writers. So, for example, if your publishing company is called “My Great Music Publishing,” you could form “My Great Songs” that would be a member of ASCAP and “M.G. Music” that would be a member of BMI. Technically, these are two different publishing companies, but they are owned by the same parent company. (If you’d like more information about the role of a music publisher, see my article “What Does A Music Publisher Do?”)
Do ASCAP and BMI collect other types of publishing income?
There are a few types of income they do not collect on behalf of songwriters and publishers:
1) Mechanical Royalties. These are royalties that are paid every time a CD or mp3 containing a song is sold to the public. These royalties are paid directly to the publisher by the record company or through an organization called Harry Fox.
2) Grand Rights Licensing. If your song is featured in any live dramatic work, like a play or musical, ASCAP and BMI do not facilitate those deals. You’d have to make a deal directly with the producers of the show.
3) Synchronization Licensing (a.k.a. “Sync Licensing”). If your song is featured in a movie or TV show, you’d need to negotiate that deal directly with the production company. Although ASCAP and BMI do license TV stations, a sync license is a separate type of deal that isn’t tied to performance rights.
Do ASCAP and BMI collect foreign royalties?
ASCAP and BMI only collect performance royalties within the United States. However, they have relationships with foreign organizations that collect performance royalties in other countries and territories.
How do ASCAP and BMI pay their members?
ASCAP and BMI will mail out checks and accounting statements to their members on a regular basis (the exact timing depends on whether you’re a songwriter or publisher). Also, each organization has fancy formulas to determine how much of the collected income should be allocated to each songwriter and publisher.
This article is intended to give you a brief overview of performance rights organizations and how they can help you generate income from your songs. If you’re interested in joining either ASCAP or BMI, information and membership applications are available on their websites: www.ascap.com and www.bmi.com. Note: Kamal Moo is a California licensed attorney. The information contained in this article is not legal advice. Reading this article does not create an attorney-client privilege. You should consult with an attorney if you need legal advice: www.Johnson-Moo.com