Understanding PROs: How BMI, ASCAP and SESAC Can Help Monetize Your Music

Understanding PROs: How BMI, ASCAP and SESAC Can Help Monetize Your Music

For musicians, monetizing compositions by collecting performance royalties represents an important income stream. Performance rights organizations (PROs) like BMI, ASCAP, and SESAC provide the licensing and royalty collection infrastructure to facilitate this process. This article will explain what PROs are, the key organizations composers can join, the benefits of membership, and how to maximize royalties from your compositions.

What is a Performance Rights Organization (PRO)?

A performance rights organization, or PRO, is an entity that issues licenses for the public use of copyrighted musical works. This allows the creators and publishers of those works to be paid performance royalties when the material is played or performed publicly.

PROs offer several key services to members including:

• Issuing public performance licenses to music users like radio stations, streaming services, venues, bars, restaurants and more. This grants them the rights to publicly play the catalog of works.
• Collecting licensing fees and royalty payments from these music users.
• Distributing collected royalties to members based on usage reporting and payment rules. This compensates composers and publishers for public performances.

By joining a PRO as a songwriter or publisher, you gain the benefit of having your music licensed and earning royalties you’d be unable to collect independently. PROs level the playing field for members.

Major Performance Rights Organizations

There are several major PROs that composers can consider joining. The top three based in the United States are:

BMI

• Stands for Broadcast Music, Inc.
• Non-profit formed in 1939.
• Currently represents over 1 million songwriters, composers, and publishers.
• Claims to have over 15 million works in its catalog.
• Paid $1.284 billion in royalties to members for the fiscal year ending June 2021.

ASCAP

• Stands for American Society of Composers, Authors and Publishers.
• Formed in 1914.
• Represents over 725,000 songwriter, composer, and publisher members.
• Claims a repertoire of over 11.5 million copyrighted works.
• Paid $1.327 billion in royalties to members in 2020.

SESAC

• Stands for Society of European Stage Authors and Composers
• Formed in 1930.
• Smallest PRO representing about 30,000 music creators and publishers.
• Claims to represent over 400,000 songs and compositions.
• Paid $258 million in domestic royalties in 2019.

Other smaller PROs exist, but joining BMI, ASCAP, or SESAC offers the most licensing clout and royalties potential thanks to their vast industry presence.

Benefits of Joining a PRO

Here are some of the valuable benefits composers, songwriters, lyricists and publishers enjoy by becoming members of a performance rights organization:

Performance Licensing

• PRO licenses your compositions for public performances.
• Grants legal permission for your songs to be played by thousands of venues and services.

Royalty Collection

• Monitors where your works get performed.
• Collects performance royalties on your behalf.
• Saves you from pursuing compensation independently.

Royalty Distribution

• PROs pay out all royalties collected to rights holders after administrative fees.
• Members receive payment for radio plays, live covers, streaming, and more.
• Provides passive income from your catalog.

Legal Protection

• PROs police unauthorized use and take infringers to court.
• Having compositions registered with a PRO helps win copyright disputes.
• Oftentimes resolves issues without needing to hire a lawyer.

Industry Advocacy

• Lobby legislators on behalf of composers’ rights and fair pay.
• Negotiate better royalty rates with digital streaming services.
• Give members a voice with collective bargaining power.

By tapping into your PRO’s licensing and collection infrastructure, you can focus on music creation while they handle the business.

How do PROs Collect Royalties?

PROs use various methods to monitor public performances and collect applicable royalties including:

Radio and TV Monitoring

• Uses digital fingerprinting to ID songs played on radio, broadcast TV, etc.
• Cross-references with member composition data to track performances.
• Issues licenses to stations and networks.
• Royalty distribution splits among songwriters, publishers, and rights holders.

Venue Licensing Agreements

• Bars, restaurants, gyms, shops and more pay blanket license fees to cover music use.
• Fees may be flat-rate monthly or based on capacity.
• PROs pay a share to applicable members whose music gets performed.

Concert Reporting

• Touring musicians and bands submit set lists and concert logs.
• Identifies covers of members’ songs performed live.
• Results in royalties for original composers.

Streaming Service Reporting

• On-demand streaming services report detailed usage data.
• Members compensated for streams of specific recording of their works.
• Payout formulas differ by PRO and service negotiated terms.

This combination of monitoring, licensing, and reporting allows the PROs to widely collect performance royalties across industries.

How Royalties Are Distributed to Members

While collection is comprehensive, distribution of royalties to PRO members follows defined rules and processes:

Performance Data Processing

• Usage reports are compiled showing each song performance.
• Works are matched to registered member compositions.
• Frequency and length of performances is weighted.

Distribution Formulas

• Each PRO uses formulas to allocate royalties to members.
• Factors like seniority, radio vs. general licensing, credits, etc. come into play.
• Focus is splitting royalties fairly based on level of song usage.

Direct Deposits

• Most royalties are directly deposited into registered member accounts quarterly.
• Provides convenient, consistent passive income to members.

Unclaimed Works

• Where usage occurs but a work isn’t registered to a member, funds held.
• If still unclaimed after 3 years, considered abandoned and repurposed.

Learning the royalty breakdown for your PRO will help you understand your payment statements. Maximizing performances boosts royalties.

How Performing Rights Organizations Pay Songwriters Versus Publishers

While PROs pay royalties to both the songwriters and publishers of compositions, typical payment splits differ:

Songwriter Royalty Distribution

• Songwriters who composed a work receive 50% of collected royalties.
• Divided among credited writers per their ownership split of the work.
• Directly paid out to the songwriter members.

Music Publisher Royalty Distribution

• Publishers who hold rights get 50% of royalties.
• Usually administered by the publisher on behalf of songwriters under contract.
• Publisher may retain a percentage before paying the writer their share.

Under this model:

• Self-published songwriters would get 100% of royalties directly (50% as writer + 50% as publisher).
• Songwriters with their own performing rights entity can register as both.

Collaborating and co-writing with other PRO members maximizes royalty potential since more creators benefit.

How to Join a Performance Rights Organization

If you want to start collecting public performance royalties on your music, here is the process for joining one of the major PROs:

Review Membership Options

• BMI, ASCAP and SESAC have different tiers like writer vs publisher status.
• Review requirements for joining as an individual songwriter or larger publisher entity.

Submit Application

• Complete online application with personal info, musical history, credits, etc.
• Provide documentation like government ID, tax forms, copyright registrations.

Accept Invitation

• Applications are reviewed and approved based on credentials.
• Once invited, review and accept membership agreement terms.

Register Compositions

• Upon joining, submit songs and song data to register your catalog.
• Provides PRO with metadata needed to monitor usage and pay royalties.

List Affiliated Publishers

• If any publishers administer your compositions, provide details.
• Ensures publishers also receive their royalty share.

After registration, you can start collecting royalties on performances. Consider joining additional PROs to maximize licensing reach. But focus on getting songs registered with your primary one first.

Tips for Maximizing PRO Royalties

Once you’ve joined a performing rights organization, here are some tips to help maximize the royalties generated from your catalog:

• Register all songs in your catalog to ensure accurate payment tracking. Don’t leave money on the table.
• Promote radio and streaming plays since these platforms pay the highest royalties. Pitch tracks to curators and playlisters.
• List accurate and complete metadata like co-writers to properly distribute payments.
• License compositions multiple ways like synchronization for film/TV to stack income streams.
• Publish songs under your own imprint so you receive both writer and publisher royalties.
• Co-write frequently to get cuts on other artists’ albums earning royalties.
• Collect foreign royalties by designating local PROs internationally to license works across regions.
• Monitor royalty statements and dispute any incorrect song or payment data.
• Share PRO affiliation in bios so music supervisors, venues and curators know you expect compensation.

Taking advantage of everything your PRO has to offer ensures you fully capitalize on the earning potential of your catalog and musical profile.

Public Domain Compositions vs. PRO Works

One royalty distinction to note relates to public domain compositions:

• Public domain works are older compositions with copyrights that have expired. This means anyone can use these works freely without needing to license them. Public domain songs will not generate PRO royalties.
• PRO registered works are under active copyright protection either via original registration or renewal. These compositions must be licensed for public performance which earns royalties for members. Works published after 1927 likely fall under PRO protection if copyright was renewed properly.

While public domain melodies can be freely reinterpreted without permission, it won’t compensate the original writers. Original PRO-registered works should be licensed and generate royalties assuming copyrights were actively maintained.

Global Collection Societies

In addition to US-based organizations, collection societies around the world license performances internationally and remit royalties back to domestic PROs:

• PRS (UK): Represents British songwriters, composers, and publishers when compositions are used globally. Remits international royalties back to US PROs in home currency for distribution.
• SOCAN (Canada): Licenses Canadian works around the world and returns royalties to affiliated US PROs.
• APRA AMCOS (Australia): Australasian PRO collecting royalties across the Asia Pacific region.
• GEMA (Germany): German collection society monitoring European public performances.
• JASRAC (Japan): Japanese organization covering uses across Asia.

Having your PRO affiliated with leading international groups expands your royalty potential. Many societies have reciprocal agreements to share data.

Conclusion

Joining and actively participating in a major performing rights organization allows songwriters, composers, lyricists and publishers to be compensated when their music gets performed publicly. BMI, ASCAP and SESAC provide the licensing infrastructure that makes collecting royalties at scale possible across radio, TV, streaming, live venues and more. Maximizing public performances of registered works, accurately tracking data, getting compositions placed with artists, and leveraging global collection societies helps registered members earn the full value of their musical creations through PRO participation.

FAQ: Understanding PROs: How BMI, ASCAP, and SESAC Can Help Monetize Your Music

What is a Performance Rights Organization (PRO)?

A Performance Rights Organization (PRO) issues licenses for the public use of copyrighted musical works, collects licensing fees, and distributes royalties to songwriters, composers, and publishers for public performances of their works.

What services do PROs offer to members?

PROs offer:

• Issuing public performance licenses to various music users.
• Collecting licensing fees and royalties.
• Distributing collected royalties to members.
• Providing legal protection and industry advocacy.

What are the major PROs in the United States?

The major PROs in the United States are:

1. BMI (Broadcast Music, Inc.)
2. ASCAP (American Society of Composers, Authors and Publishers)
3. SESAC (Society of European Stage Authors and Composers)

What are the benefits of joining a PRO?

Benefits include:

• Performance licensing for public use of your compositions.
• Royalty collection and distribution.
• Legal protection against unauthorized use.
• Industry advocacy for composers’ rights and fair pay.

How do PROs collect royalties?

PROs collect royalties through:

• Radio and TV monitoring using digital fingerprinting.
• Venue licensing agreements with bars, restaurants, and other establishments.
• Concert reporting by touring musicians and bands.
• Streaming service reporting for on-demand plays.

How are royalties distributed to members?

Royalties are distributed based on:

• Performance data processing and usage reports.
• Distribution formulas that allocate royalties fairly.
• Direct deposits into members’ accounts, typically on a quarterly basis.

How do PROs pay songwriters versus publishers?

• Songwriters: Receive 50% of collected royalties, divided among credited writers.
• Publishers: Receive 50% of royalties, which they administer on behalf of songwriters.

How can I join a PRO?

To join a PRO:

1. Review membership options and requirements.
2. Submit an online application with necessary documentation.
3. Accept the membership agreement.
4. Register your compositions and list any affiliated publishers.

How can I maximize PRO royalties?

Tips to maximize royalties include:

• Register all songs in your catalog.
• Promote radio and streaming plays.
• List accurate metadata.
• License compositions in multiple ways.
• Publish songs under your own imprint.
• Co-write frequently.
• Collect foreign royalties through local PRO affiliations.
• Monitor royalty statements and dispute any errors.

What is the difference between public domain compositions and PRO works?

• Public domain works: Older compositions with expired copyrights, freely usable without licensing.
• PRO registered works: Under active copyright protection, requiring licensing for public performance and generating royalties.

What are global collection societies?

Global collection societies, such as PRS (UK), SOCAN (Canada), APRA AMCOS (Australia), GEMA (Germany), and JASRAC (Japan), license performances internationally and remit royalties back to domestic PROs.

Conclusion

Joining a major PRO like BMI, ASCAP, or SESAC allows songwriters, composers, and publishers to collect royalties from public performances of their works. By actively managing your PRO membership, registering compositions, and promoting your music, you can maximize your royalty earnings and protect your creative rights.