By Robert Brode
This week we continue our series on artists’ assets. The series began with Artists House founder, and Grammy Award winning producer, John Snyder’s article entitled, "The Magic of Copyright". This was followed by, “Your First Asset: The Right to Reproduce,” the first in a series of articles that examine the rights an artist is granted upon creation of a copyright, and how these rights relate to licenses.
We now move to another of the six exclusive rights granted to an artist when they create a copyright: the right to perform the copyrighted work publicly. One key point of this article, as it relates to your overall sustainability as an artist, is that you must affiliate with a Performance Rights Organization (PRO) in order to avail yourselves of the financial and other opportunities associated with the exclusive right of public performance. The three dominant PROs in the United States are:
Below you will find an explanation of what exactly these PROs do, and how they relate to your work as an artist, but, again, in order to benefit from your public performance right, you must affiliate with one of the three.
Please read these articles in sequence, but if you’d like to start here, or if you just want a refresher, we’ll begin with a general overview of how copyright is created, and what rights you are granted upon creation of the copyright.
To be a songwriter is a powerful thing. Once you write a song and fix it in a tangible medium, you become the proud owner of a musical work copyright. Your shiny new copyright comes with a set of powerful exclusive rights. These rights, which can be found in § 106 of the Copyright Act, consist of the following: (1) the right to reproduce the work; (2) the right to prepare derivative works; (3) the right to distribute copies of the work; (4) the right to publicly display the work; (5) the right to publicly perform the work; and (6) in the case of sound recordings, the right to publicly perform the work via digital audio transmission. *
If you've written a good song, others will want access to these rights; however, copyright law, with some exceptions, prevents anyone else from exercising these rights without permission from and payment to you, the copyright holder. As a songwriter, the quality of your songs generates attention but the copyrights in your songs generate income.
Although there are two "music" copyrights, the musical work copyright ("MWC") and the sound recording copyright ("SRC"), the copyright of interest to the songwriter is the MWC and the potential income streams it creates. These income streams rightfully belong to the songwriter; yet, many songwriters, uneducated in copyright, give these rights and accompanying income streams away freely. This article will examine one of the most valuable rights held by songwriters: the right of public performance.
Relevant Parties
The Songwriter: The songwriter holds the copyright in his or her musical work from the moment that work is fixed in a tangible medium (e.g., recorded on a $4 tape recorder, on an iPhone, in a million dollar studio, or written on the back of a cocktail napkin). Though the exclusive rights begin with the songwriter, writers commonly divvy up these rights and/or money generated there from among a few different parties. We'll look at some of these parties below.
The Music Publisher: Publishers are in the business of promoting and monetizing musical works. Songwriters generally assign their MWCs, in whole or in part, to a music publisher, along with the exclusive right to administer the compositions (e.g., issue all documents and collect all income related to the compositions other than the writer's share of public performance royalties, explained below).
Once the publisher obtains the right to administer a song, the publisher will (one hopes) work to find parties interested in using the song, license the song to those interested parties, and collect the income generated under such licenses (a percentage of which is kept by the publisher).
Performance Rights Organizations: Performance Rights Organizations ("PROs") negotiate licenses for the public performance of musical compositions, monitor usage of each musical composition by licensees, and collect and distribute income generated under such licenses. PROs do not take ownership of the musical works they license; they merely administer the public performance rights and royalties on behalf of music publishers and songwriters.
What is a Public Performance?
The Copyright Act gives MWC holders broad and exclusive public performance rights. The performance of a work includes both live performances and transmissions of performances (whether live or recorded). A performance is public if: (1) it occurs at a place open to the public where a substantial number of persons, outside of family and friends, gather; or (2) the performance is transmitted to such a place; or (3) the performance is transmitted so that members of the public can receive the performance at the same or different places, at the same or different times.
Don't be discouraged by tricky legal definitions. Most music performed outside the home in what most people would consider a public setting (e.g., at a club, at a sporting event, at a concert venue), or transmitted or broadcast to the public (e.g., via radio, television, webcast, or stream) is a public performance that requires a license from and payment to the MWC holder. ** Monies earned from licensing public performance rights are called public performance royalties.
The Copyright Act also affords some public performance rights to SRC holders but these rights are very narrow and therefore less valuable. A SRC holder's exclusive public performance rights only apply to public performances via "digital audio transmissions," such as satellite radio, cable systems and online streams or webcasts. SRC holders, unlike MWC holders, are not paid for public performances on broadcast radio, television, or at nightclubs or sporting events.
PROs: Backbone of the System
Now you are ready to negotiate licenses with thousands of nightclubs, arenas, radio and television stations and webcasters for use of your musical works and collect payment for those licenses!
You aren't?
Don't panic the task of negotiating public performance licenses, monitoring usage, and collecting and distributing public performance royalties is handled for songwriters and publishers in the United States by three performance rights organizations: ASCAP, BMI and SESAC.
Becoming a member of ASCAP or affiliating with BMI is quite easy and can be done online at www.ascap.com or www.bmi.com respectively. Membership requirements for each are fairly basic. To join ASCAP, you must have written, co-written, or published a song that has been:
- commercially recorded (CD, record, tape, etc.); or
- performed publicly in any venue licensable by ASCAP (club, live concert, symphonic concert or recital venue, college or university, etc.); or
- performed in any audio visual or electronic medium (film, television, radio, Internet, cable, pay-per-view, etc.); or
- published and available for sale or rental.
The requirements for BMI are the same, except writers of works likely to be publicly performed may affiliate with BMI.
ASCAP charges $35 per application, whether it is as a writer or publisher. BMI does not charge writers but charges individually owned publishing companies $150 and formally organized corporations $250 to affiliate. There are no fees associated with joining SESAC; however, SESAC, unlike ASCAP and BMI, is very selective in their affiliations.
The most common type of license issued by the PROs is called a blanket license. A blanket license allows a user, such as a TV or radio station, to publicly perform all the works in that PRO's catalog as often as desired for the term of the license. PROs also grant per-program licenses and permit publishers and writers to license directly to users should they choose. The PROs use complicated formulas to calculate the appropriate sum to be paid to each songwriter and publisher based on the money collected in a given year and the number of public performances of a particular song. Each PRO calculates the value of each public performance differently, so co writers of a song belonging to different PROs may receive checks in different amounts.
PROs calculate the number of public performances for any given composition through various survey and sampling methods. Translation: Not every public performance is accounted for, so your royalty statement may not account for the one spin your song received at a small radio station in rural Mississippi before the sun came up on a Tuesday morning in December.
PROs divide public performance royalties equally between the songwriter (the "writer's share") and publisher (the "publisher's share"). If you don't have a publishing deal, you should join your chosen PRO as a writer AND a publisher, and collect both the writer's share and the publisher's share. BMI makes quarterly payments while ASCAP makes separate quarterly payments for domestic and international royalties for a total of eight payments in a calendar year.
Value Your Rights
Now that you've seen just a small example of how valuable your rights can be, I hope you'll be very careful before signing a contract transferring any of those rights. Most of the players in the music industry require use of the exclusive rights held by songwriters and music publishers to function. A radio station can't play a song unless that song is licensed by the MWC holder (or, as you just learned, by a PRO on behalf of the copyright holder). A producer of a television show can't use copyrighted music in his/her television show without a license from the MWC holder and no television station can broadcast that producer's show featuring the copyrighted music unless the station obtains a public performance license for the song with the MWC holder's PRO. A record label can't release a recording of a previously unreleased song to the public without permission of the MWC holder.
Take note of the power you hold as a songwriter. Remember that your work is valuable. With a bit of luck, a good song will make money. If you're knowledgeable about your rights, you can ensure that money goes into your pocket, where it belongs.
Please feel free to post questions as comments, and we'll do our best to answer them
*Note the sixth right applies to the public performance right held by sound recording copyright holders and does not directly affect the songwriter as a musical work copyright holder.
**Certain public performances of musical works are exempt from the generally applicable licensing and payment requirements. Movie theaters (in the U.S) are exempt from obtaining and paying for licenses to publicly perform music heard in films shown in their theatres. Public performances of musical works in educational settings or religious services do not require public performance licenses. A small business communicating a transmission of a radio or television broadcast does not require a license to do so if the establishment meets certain requirements relating to the type and size of the business and the placement and number of loudspeakers, among others. 17 U.S.C. § 110.
Robert Brode is an attorney who practices entertainment law with the law firm of Stone Pigman Walther Wittmann, LLC in New Orleans, LA. Mr. Brode graduated magna cum laudefrom Tulane University School of Law in 2007. Before becoming a lawyer he worked for record labels, record distributors and record retailers in addition to time spent as a music journalist and television show host. He teaches Introduction to Music Business at Delgado Community College, is an active member of the Recording Academy and serves as a judge for the Entertainment Law Initiative.