Performance Rights Organizations are fundamental bodies in the music scene and an integral component in the lives of songwriters, composers, and publishers.
Chances are, you’ve stumbled upon the term PROs several times as an artist. And like most people, you may have little understanding of what they are, what they do, and how they operate. No worries, this article gets to the bottom of all these!
Stay put as I explain to you all the nitty-gritty of PROs: Their roles, how they differ from CMOs and MROs, the various PROs found in the US, and why they are worthy of considering joining.
- What is a Performance Rights Organization?
- What is the Difference Between PROs, CMOs, and MROs?
- What are the Responsibilities of Performance Rights Organizations?
- Which are the Main Performance Rights Organizations in the US?
- Is Joining a PRO Worth It?
What is a Performance Rights Organization?
A Performance Rights Organization, otherwise referred to as a Performing Rights Society, is an entity that ensures composition copyright holders - songwriters and publishers - earn from the public performance of their copyrighted works.
They collect performance royalties for music that is publicly played - live or recorded - on streaming services, radio, TV shows, adverts, and in public locations such as restaurants, clubs, and stores.
While their primary role is royalty collection, PROs are also known to be active in the legal spaces. They apprehend and take offenders of the stated rights to court.
In the US, however, they take the violators to the Copyright Royalty Board. PROs act in the interest of copyright owners in matters concerning legal royalty rates.
What is the Difference Between PROs, CMOs, and MROs?
Collective Management Organizations is a general term that describes organizations concerned with licensing, tracking, collecting royalties, and enforcing their customers' rights.
These organizations may differ from country to country in terms of name and the repertoire they represent.
Theoretically, there are different kinds of CMOs worldwide: PROs, for instance, is a subdivision of CMO concerned with collecting performance royalties.
Mechanical Rights Organizations (or MROs) are responsible for collecting mechanical royalties, while Reproduction Rights Organizations (RROs) collect reproduction royalties on behalf of copyright holders.
On the other hand, countries like China have CAVCA, which is concerned with collecting royalties generated from karaoke performances.
In the United States, various bodies manage different music royalties. These are:
- Sound Exchange - a CMO that exclusively collects digital performance royalties from webcasters.
- The HFA - a body that falls under MROs
- ASCAP, BMI, and SESAC. These three bodies are PROs.
- AMRA - a digital collection organization dedicated to both performance and mechanical royalties collection, exclusively from streaming platforms globally.
What are the Responsibilities of Performance Rights Organizations?
As mentioned earlier, Performance Rights Organizations are go-betweens. They provide the following intermediary functions.
1. Issuance of Licenses
To be able to earn royalties, the first step is to authorize the use of copyrighted work. This is achieved through licensing, done by Performance Rights Organizations. The type of license given may vary from one consumer to another, depending on the kind of music they want to play.
For instance, Radio broadcasters receive blanket licenses that enable them to play unlimited music from all genres worldwide.
Streaming platforms, on the flip side, have their licenses determined through an agreement between the PRO, publishers, and legal bodies such as the CRB in the US.
Generally, a consumer is required to pay a yearly fee for the liberty to play the copyrighted music. In other instances, a monthly fee for a per-program license can be issued.
2. They Monitor Broadcasts
After issuing the licenses, Performance Rights Organizations track the usage of songs through reports written by broadcasting companies. They also use census stations, a concept that allows them to process musical playtime remotely.
Monitoring performances help PROs to calculate the number of royalties a particular consumer is supposed to pay.
3. They Accumulate Royalties
As an artist or songwriter, you may lack the time and resources to collect your royalties individually. Here is where PROs come into play. These organizations are tasked to find venues with public performances and collect royalties.
Once reports and playtime data from the consumers have been analyzed, Performance Rights Organizations determine the amount the consumer is required to pay.
However, some consumers use Prepay service, meaning they get to pay before airing the songs. According to The Royalty Revenue Calculation Roadmap - Flow Haven, royalties are the equivalent of sales multiplied by a royalty percentage.
4. Disburse Royalties
The main goal of Performance Rights Organizations is to ensure the artists earn from their music. This means that after they collect royalties, they are obliged to share the returns with their clients.
Based on General Royalty Information provided by BMI, royalties disbursed to publishers and songwriters are considered 200%, where half of the amount goes to artists while the remaining half goes to the publisher.
In layman’s language, 50 cents goes to your publisher for every dollar collected as royalty, and the other 50 cents is yours.
However, it is noteworthy that the PRO will take the publisher's cut if you haven’t enlisted one for your songs.
5. Protecting the rights of Musicians and Publishers
Performance Rights Organizations protect music composers from exploitation by tracking, calculating, and monitoring song broadcasts. They do so by legally binding consumers to pay for the music aired. In simple terms, they uphold public performance rights.
Additionally, as mentioned earlier, they bring the copyright offenders to book.
Which are the Main Performance Rights Organizations in the US?
Performance Rights Organizations exist in several countries. In fact, any country that produces music has a regulatory body that oversees the rights of music composers. In the US, the following are the three main PROs.
Broadcast Music Incorporation is an American-based company with its headquarters in New York. It was founded in 1939 and is one of the world's most prominent Performance Rights Organizations. It became popular in the mid-20th century by representing musicians of all kinds.
According to Wikipedia, BMI controls over 15 million catalog compositions as of 2022 and has nearly a million musical composers. These composers come from around the world, including Lady Gaga, Lil Wayne, and Taylor Swift.
Working with BMI is absolutely free for music writers. Publishers are, however, required to pay $150. To join the organization, a valid email address is all you need.
ASCAP is also an American-born company and another massive player in the performance rights sector. It is the only US PRO owned and run entirely by music authors, composers, and publishers.
Headquartered in New York City, it started its operations in 1914 and has since represented more than 11 million catalog compositions. It is also credited as the pioneer company that sought to protect song composers from exploitation.
To join as a songwriter or publisher, you’ll pay a one-time fee of $50. You’ll also be required to submit the following details:
- Legal name
- A valid email address
- A mailing address
- Your Social Security Number or Individual Taxpayer Identification Number
You must also be above the age of eighteen to be considered. And once you are enrolled into the society as a publisher, you’ll need to register with an ASCAP publishing company to receive your share of royalties.
The Society of European Stage Authors and Composers is another American-based PRO that doubles up as a mechanical rights organization. SESAC is considered the first organization to deal with public performance and mechanical licensing in the United States.
In contrast, SESAC is a profit-making company that specializes in representing less distinguished singers worldwide. It has nearly 30,000 members as of 2022. Moreover, the company pays royalties monthly instead of quarterly like the other two.
Joining SESAC is free. However, they do not open their doors to every songwriter unless they invite you. In the books of SESAC, you’ll find names like Adele, Bob Dylan, and R.E.M.
Is Joining a PRO Worth It?
It is undeniably worth considering being a PRO member if you want to make a living through songwriting.
First of all, as we’ve mentioned throughout this article, PROs take the load of locating and tracking music performances, and royalty collection off of you. This activity can take up a lot of your time and resources. How they do these vary from one company to another.
Therefore, it is crucial to research thoroughly before joining any PRO since you can only be a member of one PRO at a time.
Besides royalty collection, other perks come with being a member of a PRO that can benefit you whether or not your songs are played publicly.
For instance, the three US PROs provide discounts on specific products and services, including travel and gear. BMI, in particular, offers its members discounts at Bertleemusic.com, Sprint, and Songtrust, for airport parking, on CMA’s Sterling persons membership, and the legacy learning system.
It also offers a 90-day free Musician Atlas online account, among other benefits. Consider checking out their websites for benefits when choosing a PRO.
Being a member of a PRO also provides you with a platform where you can meet other people within the music industry and build long-lasting relationships. Having connections is essential in any career. Each PRO has its distinct methods of doing meet-ups. The ASCAP office in Nashville, for example, holds meetings for its members and non-members every Wednesday morning, where you can learn what the organization is all about.
Additionally, you can access educational resources on their websites that are useful in understanding various topics in matters of music, such as the different kinds of royalties and how they work, copyright issues, etc. This information is almost always available to anyone.
Lastly, it’s worth mentioning that each PRO differs in various ways, including; terms and conditions of service, contract lengths, and application fees.
It is vital to be mindful of these factors before signing any contract. And if you’ll wish to terminate a contract, there’s usually a specific window period to do so.