The purpose of a Performance Rights Organization is to figure out who’s music is getting played and then paying that artist, writer and publisher for public performances of their work. It’s hard to put a price tag or a number on how important music is to the world but long ago, when the record business was just getting started, artists and writers of music argued that what they were doing was of some value to the world. And radio stations and bars and clubs and concert halls and shopping malls all agreed, music definitely was good for business. So around this time the first Performance Rights Organization was created. It was called the American Society of Composers, Authors, and Publishers or ASCAP. It’s job was to figure out all the ways and places in which music was being used publicly and how to turn that into dollars for the people creating the music. They came up with a scheme that was pretty simple to understand and quite effective. They did this by selling licenses to any place of business that used music. If you wanted to start a radio station you had to buy a license from ASCAP. If you owned a club where live music was going to be performed you had to buy a license from ASCAP. If you owned a store where you were going to play music to create a relaxing atmosphere for your shoppers, you had to buy a license from ASCAP. And it remains the same today, but now there are three major organizations that collect performance money, one is ASCAP, another is BMI and the last is SESAC. All do the exact same thing: Collect money for artists, writers and publishers for the public performance of their songs.
Before we go any further let me explain a few ins and out of Performance Rights Organizations. Let’s start with a few definitions:
Artist: The person performing the piece of music. Some artists write their own music and lyrics, some do not. As you will see there is quite an advantage to being a writer as far as Performance Rights Organizations are concerned. In fact artists who only perform other people’s music do not get any money from the public performance of that music. The author of the lyrics and the music that the artist is performing is the one sitting back collecting checks!
Composer: The person writing the music. In a traditional songwriting arrangement the person who makes the music gets half of the writer’s share. More on that later.
Author/Lyricist: The person writing the words to the music the composer wrote. As you know, not all music has lyrics, but for the last 70-80 years most popular music has. In a traditional songwriting arrangement the person who writes the lyrics gets half of the writer’s share. If there are two lyricists they must split the lyricist’s half in half. So two lyricists are each only getting a quarter of the total writer’s share.
Publisher: The publisher is someone who works for Artists, Composers, and Lyricists (and themselves) to publicize musical works. This means it is their job to try to find ways to make money on the music they represent. This may include getting a song placed in movies or on TV shows. It can include getting songs used in commercials, it can even include helping artists get in touch with more people that can help them, like record labels, promoters etc. The bottom line is that publishers are trying to get the music they represent to the public to make money for themselves and their Artists, Composers and their Lyricists.
Now, each Performance Rights Organizations has it’s own way of calculating how to pay their artists, composers, and publishers that I’ll look at in a later post, but all of them do a few things the same:
They all sell licenses to use their music. That means that someone wanting to start a radio station today must buy three licenses to broadcast music, one from ASCAP, one from BMI and one from SESAC. That’s because Ciarra may be represented by one and T-Pain is represented by another. If a radio station wants to play Ciarra’s music and T-Pain’s music it needs a license for both. Remember: ASCAP, BMI and SESAC represent ALL the music made in the United States.
They all split the money they collect from licenses and pay half to the Writers of the music and half to the Publishers. What? You mean if my song gets played I only get half the money? Well, yes and no. Let’s look at the typical arrangement first. If you have a song on the radio that generates $10,000 dollars your Performance Rights Organization pays you $5000 and your publisher $5000. Why? Because Publishers are not paid by anyone, they make their money when you make your money. Remember, it is the Publishers job to publicize your work, and what better motivation to get out there and make money for you than for them to also be making money for themselves.
“But I want ALL the money!” you say. Ok, you can have it: By being your own publisher. All the Performance Rights Organizations let you also start publishing companies with them so that you can collect your writer’s share and your publisher’s share! And don’t be scared by the idea of starting your own company. It’s as simple as coming up with a name that hasn’t been used and then giving your social security number and stating that you are the sole proprietor (I will go into further detail about different kinds of companies in a later post including what a ‘sole proprietor’ is).
All said, though, don’t underestimate the power of a publisher. A good publisher is often well connected, much better connected to people who could use your music than you, so you need to weigh carefully the pros and cons of each scenario. Then again, you can always start your own publishing company and then when a better opportunity presents itself you can re-assign your publishing rights to a bigger publisher. Either way, never give away publishing rights for anything other than publishing. Don’t trade beats for publishing. Don’t give your lawyer publishing (unless they can prove that they can make you money publicizing your work). Save your publishing for someone who can really do something for you.
Now, remember what I said earlier about how the Writer’s Share is traditionally carved up. Traditionally, the writer of the music gets half of the writer’s share and the lyricist gets half of the writer’s share. So of this $10,000 the lyricist will only get $2500, half of half!
Now if you have two lyricists they are expected to split half of their half of their half! Like this:
You get the idea, it only gets worse the more lyricists you have on your song. And look at that Publisher way up there with his $5000…makes you want to go into publishing doesn’t it!
Lastly, I’d like to point out that there is no artist in this equation. You better be an artist who writes, or composes music if you want to get paid this way. Better yet, be an artist who does both…and has their own publishing company!
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