Performance Rights Organizations: Working with the PRO’s

Performance Rights OrganizationsPerformance Rights Organizations are known as PRO’s, which is pronounced by saying each individual letter P.R.O.—like NPR for National Public Radio. Confusion can sometimes set in because ‘pro’ is the short term for professional. PRO’s do not necessarily mean pro (professional). This is important to know not only to sound professional when you are talking about PRO’s but also to understand that being a part of a PRO or not being in a PRO does not make you more or less of professional musician. That being said, most professional musicians are involved with a PRO.

What is a Performance Rights Organization?

PRO’s are best known for collecting and paying out performance royalties. Performance Royalties are not the fee you get paid to perform at a gig, those are called performance fees. Performance Royalties are the money paid to songwriter’s and publishers when their song is performed publically or broadcast. PRO’s issue licenses and collect the royalties from assorted music venues and fests, businesses like retail stores or gyms, and radio stations. They pay copyright owners (usually the songwriter and publishers) theoretically for the number of times each one of their songs was played (after they take their small percentage of course). This one service is why most professional musicians join a PRO—they want to be paid songwriting royalties.

These days PRO’s offer more than simply collecting and keeping track of royalties and then paying them out. By joining a PRO songwriters are also entitled to discounts on everything from insurance to website tools. Some artists consider the education and advice from peers online and at conventions and seminars to be some of the more valuable benefits of joining a PRO.

PRO’s also get involved in the political and legal arguments that involve music and copyright laws.

There are Two Main PRO’s for musicians in the United States:

ASCAP stands for The American Society of Composers, Authors, and Publishers and is said like the words as and cap together, not each letter like NPR.
BMI stands for Broadcast Music Inc. and is pronounced using each letter—like NPR.

Note that you can only be part of one PRO at a time, but you can switch after the agreement with your current PRO ends.

 

Essentially both organizations do the same thing:
collect and pay royalties to songwriters and publishers;
but there are some noteworthy differences
between the two organizations.

 

They have very different business structures. ASCAP was formed by writers and publishers while BMI was formed by the broadcasting industry. ASCAP is an unincorporated membership association. This means that it is controlled by its members: composers, songwriters and publishers. The members elect a Board of Directors from within their own members and hold general meetings regularly. BMI is a corporation owned by Broadcast professionals and the artists have no input into running the organization. BMI says they are a not-profit making corporation, which is very different from the church or community service non-profit corporations that we are used to seeing in the Christian culture. Some people feel that ASCAP’s structure is better because the artists are more aware of what they need and want, and are free to run their organization as they see fit. Other people feel BMI’s structure is better because most artists are not adept at business and law, so it is good to let business people do what they do best. Then, the ASCAP supporters respond by saying that the business people in charge of BMI are the music customers—primarily the radio and television execs who should be paying the royalties…and the debate continues. In the end it is really a matter of personal preference.

Another primary difference between the two organizations is the way they collect data and the formulas they use to pay out royalties. Some songwriters have co-written a song with one writer belonging to ASCAP and the other to BMI. Ideally, the royalties paid should be the same, but usually are not. This is due to how each company collects its data and applies its formula for tracking how many times the songs were played. Many songwriters report that often the same song will generate more royalties with one or the other PRO one month only to reverse positions another month.

Royalties for Your Band?

Which way of collecting data and applying formulas is better is a moot point for most Christian music ministers because both BMI and ASCAP primarily use radio airplay sampling or tracking as the basis for the majority of their calculations. So, unless your song is getting a fair amount of airplay on the stations they are sampling or tracking (most often, bigger national stations), you probably are not going to make enough of a blip on their stats to generate a paycheck. The notion that you get paid for each time your song is played is not exactly true. Neither PRO can possibly track every time your song is broadcast or performed in public. A more accurate description how payouts are made would be to say that all the money collected is put into one pot and you get paid a percentage of the pot primarily based on the percentage of radio and television airplay your song receives from the stations the PRO use to collect their data. Most of us do not have songs in the regular rotation of national radio stations, so we would not generate any royalties, regardless of how the data is collected or calculated. So, joining a PRO believing we will receive performance royalties is not a realistic expectation for most Christian musicians.

Royalties from Your Own Bands Live Performances:

Both BMI and ASCAP have a program to pay performers for their live stage performances of their own songs. ASCAP’s program is called OnStage and BMI’s is called BMI Live. Both programs operate essentially the same way. You register each song that you intend perform with the PRO once they are written and you have determined who owns the song. After each gig you log on to the PRO’s website and give them your set list. Once each quarter you receive a check for the live performances of your songs. Sounds simple—put in a little time on the computer and get some free money! Not so much, there are two main problems with doing this:

● The royalties are based on the license fees for each venue. On their websites OnStage FAQ’s ASCAP states “The royalty generated by a live performance is based upon the license fee paid by the venue. As venues with larger capacities pay a larger license fee to ASCAP, the royalty generated by these venues will be larger than venues with smaller capacities.” How many of us actually play enough large venues to generate a paycheck from royalties?

● The royalties are based on the license fees for each venue. You are not seeing double—this is a repeat of the first problem. The second problem is not that the venues most of us play are not large enough; it is that many of the venues we play do not have a license at all. Some are exempt from needing a license (the exceptions are listed below); others are simply to small and poor to pay for one. If you enter information for a live show event into either PRO’s website an agent will be assigned to collect fees from the venues address which you entered if they do not have a license already. The costs of these fees in addition to purchasing a license from each PRO every year have shut down many venues, resulting in even fewer places for you to play. Should the venues have a license? Legally—absolutely yes. But the reality is that most small venues (the kind most of us play all the time) don’t have a license and cannot afford one as they often cost thousands of dollars a year for each PRO.

There are some types of organizations that are exempt from needing ASCAP licenses:

● religious organizations (during worship only)
● non-profit educational institutions (most Christian schools fall into this exemption)
● record stores and other establishments where the primary purpose of playing the music is to sell it (this does not apply to retail stores selling other product because the music is viewed as customer entertainment)
● government bodies (state and federal)
● state fairs and agricultural events
● certain veterans and fraternal organizations during charitable social functions
● various “non-commercial” and charitable performances that have no admission charge, commercial intent or paid performers
● movie houses

Songwriters do not get paid royalties from their songs being performed at these places because they are exempt from licenses.

So, ask yourself, “Does my band play enough large venues each year that are not exempt from needing a license to justify the time it takes to enter my songs and set lists into the PRO’s data base?” and “Are we willing to alert the PRO’s to a venue which may potentially close due to lack of licenses and fines?” There is no one cookie cutter correct answer for every ministry.

 

Generally, only the top tier Christian songwriters
will receive performance royalties from a PRO.

 

Benefits from Working with a PRO: Discounts on Services

Both ASCAP and BMI have negotiated group discounts on some services for their members. These discounts may be worth joining a PRO for you. Look into them and compare before deciding if you want to join a PRO or choosing which PRO to join. Remember that these are not freebies—they are discounts from the full retail price usually in the 10 – 20% Off range. A few things have a free trial period and then a discount. Some of these same discounts can be obtained in other ways such as joining AAA or other organizations.

ASCAP Benefits
Discounts on:

● Associations (The Songwriter’s Hall of Fame, National Academy of Popular Music)
● Car Rental (Avis, Hertz, North American Van Lines)
● Financial (ASCAP Member Investment Services, US Alliance Federal Credit Union)
● Gear (Instrumentpro.com)
● Healthcare and Insurance (Sterling Healthworks, MusicPro Insurance for instruments and studio and events liability coverage, Corehealth Insurance, Prescription Drug Discount Card, Careington Health Discount Card, Aflac Supplemental Insurance, Dental Insurance, Life Insurance & Long Term Care, Liberty Mutual Auto, Home, and Renters Insurance)
● Hotels (Choice Hotels International)
● Manufacturing (Disc Makers, Dupecoop, Valle Music Reproduction)
● Music Magazines (American Songwriter Magazine, Music Dispatch, Geniuses of the American Musical Theater plus over 20 more major music magazines and industry resource guides)
● OnLine Education (Berklee Online, SongU.com)
● Software (EastWest Sound Libraries, Jeff Rona’s Liquid Cinema, MasterWriter, Secret Composer)
● Web Tools (Bandzoozle, Broadjam, Fanbridge, recordXpress, Nimbit, Section 101)

For more specific information about ASCAP’s discounts CLICK HERE.

BMI Benefits
Discounts On:

● Associations (Songwriter’s Hall of Fame)
● Booking (Musicians Atlas)
● Financial (City National Bank, Direct Deposit of Royalties, The Card)
● Gear (Blue Microphones, Dell, JBL Harmon/Kardon, MasterWriter, Oasis, Sweetwater)
● Healthcare and Insurance (Preferred Insurance Benefits, MusicPro Insurance for instruments and studio and events liability coverage)
● Marketing (muzlink, ArtsistShare for Songwriter’s)
● Manufacturing (Disc Makers)
● Music Magazines (Billboard, Los Angeles Times)
● OnLine Education (Berklee Music, Digital Music Doctor, UCLA Extension)
● Recording (PMP Production Marketplace)
● Shipping (Fed-Ex)
● Software (MyWerx)
● Web Tools (Fanbridge)

For more specific information about BMI’s discounts CLICK HERE.

One more benefit that PRO’s offer is conferences and seminars. If you love to network while getting the latest industry information, these events are made for you! Typically, ASCAP hosts more of their own events while BMI offers discounts to other national events.

Both PRO’s also offer online career advice in the form of articles. CLICK HERE for BMI’s information. CLICK HERE for ASCAP’s information. Notice that you do not have to be a member of either PRO to have access to this information.

How much does it cost to join?

● ASCAP charges a one time $50 fee for either writers or publishers ($100 for both). Members’ contracts are for one year.
● BMI is free for songwriter’s and $250 for publishers. Writer’s sign a contract for 2 years, publishers sign for 5 years.

So, after all is said and done, is it worth it to join a PRO?

For most of us the answer will be “Probably not” because we do not have songs that are making the charts or getting national radio or television airplay. It does take a little time to join (and maybe a little money). It takes more time to register each song and then more time to enter your set list after each gig. For most of us, all this time spent will net us no cash until we are either a national act ourselves or are selling our songs to them. Some of us might benefit from some of the discounts offered, but many of us will be able to find comparable discounts on the services we need elsewhere. We will each have to assess our own needs and do the research to see if joining a PRO makes sense and cents for our ministry.

PRO's do NOT Validate Ministry

 

CLICK HERE for a little more information I found while working on this article. This is a more complicated read, but worth the effort if you are interested in the more controversial aspects of PRO’s.

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