If you work in the music business, you’ve probably heard about performance rights organizations—ASCAP, BMI, and SESAC.
But if you’re like most of us, these companies’ role in the music business is a little unclear.
These organizations collect royalties on behalf of songwriters and publishers. They act as a go-between for people who listen to music and those who make it.
However, they don’t collect all royalties. More on that later.
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What are performance royalties?
There are several types of royalties you can earn when you write or produce a new song: mechanical royalties, sync royalties, master recording royalties, and performance royalties.
Performance royalties, in particular, are paid to songwriters and publishers when a song is played (performed in public):
- in a live venue,
- on the radio,
- on a digital streaming platform,
- on TV,
- or in a movie.
Performance royalties organizations (PROs) are tasked with collecting those royalties.
The three biggest PROs in the US are:
- BMI,
- ASCAP,
- and SESAC.
AMRA is a digital collection society that handles mechanical and public performance royalties made by streaming services all over the world.
Getting Paid: Public Performances
Legally, anytime a song is “performed” in public, the songwriter of that song is owed a royalty.
It would be unmanageable for every radio station in the world to collect and pay royalties and write checks for every song they play on the air every day. So an in-between company (ASCAP, BMI, SESAC) handles the administration of these royalties.
How PROs Work
Restaurants, digital radio stations like Pandora and Spotify, and live music venues all pay an annual blanket license to these PROs.
The blanket license fee entitles these businesses to publicly broadcast music from the PRO.
After these venues pay the licensing fee, they keep track of every song they play that month, quarter, and year. These days, it’s done automatically with software.
Depending on how often the song is played, where it’s played, and what time of day it happens, PROs divide up the royalties and distribute them to songwriters.
In short, PROs represent songwriters and collect performance royalties. Performance royalties are legally required to be paid to songwriters whenever their song is played in public or broadcast (at a bar, in a night club, or on a digital radio station).
There are other types of royalties artists and songwriters collect, but performance royalties are among the most common.
Every few months, PROs like ASCAP, BMI, and SESAC add up all the times a song was used by their licensees and divide the license fee among them.
Comparing ASCAP vs. BMI vs. SESAC vs. AMRA: Which is Right for You?
ASCAP: American Society of Composers, Authors, and Publishers
ASCAP is the second-largest PRO in the US. It was founded in 1914 and represents over 800,000 songwriters and 11 million songs compositions. It is a not-for-profit organization that is entirely controlled by its members, including composers, songwriters, and music publishers.
In 2017, ASCAP took in $1.14 billion in licensing fees and gave its clients more than $1.007 billion
Benefits of ASCAP
- Membership Discounts: ASCAP offers discounts on memberships to prestigious organizations such as the Songwriters Hall of Fame and the U.S. Alliance Federal Credit Union. These discounts can provide financial savings and additional perks to ASCAP members.
- Insurance and Health Benefits: ASCAP members can access discounts on dental, health, instrument, and life insurance through the MusicPro program. This can be particularly beneficial for artists looking for affordable insurance options.
- Annual ASCAP "I Create Music" Expo: ASCAP organizes an annual expo that brings together industry professionals, artists, and music enthusiasts. This event provides networking opportunities, educational sessions, and showcases for attendees.
- Web Tools and Retail Discounts: ASCAP offers its members discounts on web-based marketing and sales tools through ASCAP Web Tools. Additionally, members can access discounts on music-related retail products and services.
- Control and Governance: As a member-controlled organization, ASCAP provides its members with a voice in the decision-making process and ensures that their interests are represented.
Drawbacks of ASCAP
- Membership Fee: ASCAP charges a one-time membership fee of $50 for both songwriters and publishers. While this fee helps cover administrative costs, it can be a barrier for artists with limited resources.
- Competition for Royalties: As one of the largest PROs, ASCAP represents a vast number of artists and works. This means that royalties may be distributed among a larger pool of members, potentially resulting in smaller individual payments.
BMI: Broadcast Music, Inc.
BMI, established in 1939, is another prominent PRO in the United States.
It is also a not-for-profit organization that represents over 12 million musical works from more than 750,000 artists.
BMI is the largest of the PROs and collects and pays out well over $1 billion in revenue every year.
It’s free to join BMI as a songwriter. But if you want to register as a publisher, you’ll have to pay $150. If you want to set up a full publishing company, it’s $250.
Benefits of BMI
- Free Membership for Songwriters: BMI offers free membership for songwriters, making it an attractive option for emerging artists. This eliminates any financial barriers to joining the organization.
- Discounted Registrations: BMI offers discounted registrations for various industry events such as the Billboard Latin Conference, offering additional opportunities for networking and professional development.
- Wide Range of Affiliates: BMI has affiliations with organizations such as LARAS, NXNE, and Video Games Live, providing exclusive discounts and opportunities to its members.
- Songwriting Support: BMI offers resources such as FanBridge and Musician's Atlas to assist songwriters in building their careers and reaching a wider audience.
- Monetization on YouTube: BMI's partnership with YouTube allows its members to monetize their videos without worrying about copyright claims.
Drawbacks of BMI
- Publisher Membership Fee: BMI charges a membership fee of $150 for individual publishers and $250 for publishing companies. While this fee is lower than ASCAP's one-time fee, it can still be a financial burden for some artists.
- Royalty Distribution: Like ASCAP, BMI represents a large number of artists and works, which can result in smaller individual royalty payments. However, the overall distribution of royalties is subject to the frequency of performances and the popularity of the works.
SESAC: Society of European Stage Authors and Composers
SESAC is a unique PRO among the "Big Three" as it is the only for-profit private company.
Founded in 1930, SESAC serves around 400,000 musical works from over 30,000 affiliated writers.
Benefits of SESAC
- Monthly Radio Royalty Payments: SESAC offers its members the option to receive monthly radio royalty payments, in addition to the quarterly payments received by ASCAP and BMI members. This can provide more regular income for artists.
- Exclusive Discounts: SESAC offers exclusive discounts for its members, including discounts at Sprint, Berkleemusic.com, and various other services and products.
- Personalized Service: As a smaller PRO, SESAC can offer more personalized attention and support to its members. This can be beneficial for artists seeking a more hands-on approach.
- Diverse Catalog and Affiliates: SESAC has a diverse catalog of musical works and represents a range of affiliated writers, providing opportunities for collaboration and exposure.
Drawbacks of SESAC
- Invite-Only Membership: Unlike ASCAP and BMI, SESAC operates on an invite-only basis. Artists must be invited and approved to join the organization, which can limit accessibility for some artists.
- Higher Fees: SESAC is known for charging higher fees compared to ASCAP and BMI. These fees, along with the for-profit nature of the organization, may be a deterrent for artists with limited financial resources.
- Limited Public Information: SESAC's operations and royalty distributions are less transparent compared to ASCAP and BMI. This lack of public information can make it challenging for artists to fully understand how their royalties are calculated and distributed.
AMRA
The goal of AMRA is to give songwriters around the world a single place to collect other streaming royalties.
Platforms like Spotify and Pandora rack up millions of dollars in owed performance royalties and mechanical royalties for their catalogs.
But collecting that money as a songwriter is very difficult. AMRA is a global digital collection society owned by Kobalt Music Group, but operated separately from that company.
Which One to Choose? ASCAP, BMI, or SESAC?
In the ASCAP vs BMI vs SESAC debate, there is no one-size-fits-all answer.
- If you value control and governance, ASCAP may be the right choice for you. It offers membership discounts, insurance benefits, and an annual music expo.
- If you're a songwriter looking for a no-cost option, BMI provides free membership for songwriters. It offers discounted registrations, affiliations with industry events, and resources to support your songwriting career.
- If you're seeking more regular income through monthly radio royalty payments, SESAC might be worth considering. However, keep in mind the invite-only membership and higher fees associated with this for-profit organization.
Consider factors such as membership fees, royalty distribution policies, additional benefits, and the level of personal attention and support you desire. By selecting the right PRO, you can protect your music, collect the royalties you deserve, and take your music career to new heights.
It's more important to join one than to choose a specific one (although it's important to ensure that your publisher also joins one, as they receive half of all performance royalties). To get paid as a musician, joining a PRO is crucial, but it's also important to maintain accurate metadata from the beginning. Finally, the royalty split that musicians negotiate with their publisher will impact their future earnings.
FAQs about Performance Royalties
Who can be a part of a PRO?
Any songwriter or publisher can become a member of ASCAP or BMI. To reiterate what has already been said, SESAC is the only PRO that requires an invitation.
What is the point of joining a PRO if I don't need to?
It's not required by law to join a PRO, but if you don't, you won't be able to collect performance royalties. So, if your music is getting played on streaming services, in bars, on the radio, or in ads, you should join one.
When is the right time to sign up for a PRO?
One must first sign up with a PRO if they wish to have their music played in public. However, you probably shouldn't wait until your music is being played on the radio and downloaded widely before signing up. In the event that your music is not yet being played publicly, membership in a PRO still has other features and benefits that can be useful. You should sign up as soon as possible, but definitely not later than when you begin to receive performance royalties.
How do I join a PRO?
To put it simply, it's a breeze! Joining BMI or ASCAP is as easy as filling out an online application and making a payment.