If you’re a performing artist you know the value of royalties. Regardless of the size of the check, they show up every quarter like clockwork. But they don’t just appear out of nowhere; those royalty payments are the work of one of three main performing rights organizations (PROs) in the US: ASCAP, BMI, and SESAC.
What is the purpose of ASCAP, BMI, and SESAC?
Performing rights organizations like ASCAP, BMI and SESAC license, collect, and distribute ‘public performance’ royalties for registered songwriters and publishers in the United States. It’s important to sign up for one of these organizations so you don’t miss out on any potential income from your music.
Royalties collected by PROs include when music is:
- Broadcast on the radio (terrestrial or satellite)
- Performed or played back live (such as over the speaker systems in bars, restaurants, and venues)
- Digitally streamed
PROs ensure that all public performance channels listed above have a blanket license to play your music. They collect public performance royalties from each licensee, as well as keep track of who hasn’t paid. They’ll then determine the composer, publisher, and songwriter to pay in each instance. PROs put together a list of what music was played where and includes this information with every payment to each artist it represents.
How do royalties work?
There are three main types of licenses in the music industry through which artists, copyright holders, songwriters, etc. get paid. Though there are more than that, the primary licenses you’ll find are as follows below. PROs concern themselves with public performance licenses, but it’s good to familiarize yourself the with the others as well.
- Mechanical: A mechanical license is required for any physical reproduction of an artist’s work. This refers to manufacturing CDs, or distribution of music in any tangible form. Artists (copyright holders), have agreements with record labels, distributors, and publishers on the mechanical terms of their music, and are generally paid per-copy. A mechanical license is also needed if you are planning on recording a cover song, even if only a portion of the original song is used. This also includes adding your own lyrics, re-mixing, or changing anything about the original recording that affects the overall integrity of the artists’ composition. (via Musicbed)
- Synchronization: This method of licensing refers to music that is going to be paired with some form of visual media. It has a broad range of uses, including commercials, studio films, streaming advertisements, personal films, internal communications, and more. (via Musicbed)
- Public performance: This license is perhaps the most common form of music license issued today. While ‘performance’ may be a limiting term, it applies generally to any broadcast of an artist’s work. This includes businesses who play music in their store, jukeboxes, or any other form of public performance — all the way up to concerts. Performing rights organizations (PROs) such as BMI, SESAC, and ASCAP generally manage public performance licenses and issue music royalties to artists on a per-use basis. (via Musicbed)
ASCAP vs. BMI vs. SESAC
All major PROs in the US—ASCAP,BMI, and SESAC—offer similar services. It really all boils down to the fact that PROs make sure their members are paid what they’re owed in performance royalties. That’s the most important thing, right?
Choosing the right PRO for you is ultimately a personal choice. There are different benefits that come with each organization, however, so we’ll highlight some of the benefits that come with each.
The American Society of Composers, Authors, and Publishers (ASCAP) is a non-profit organization. What stands out about ASCAP is that it’s run solely by the composers, writers, and music publishers that make up its membership. It’s also the oldest of the major PROs in the United States, founded in 1914. ASCAP represents over 10 million pieces of work from over half a million registered members. Membership costs $50 for both songwriters and publishers.
Perks of being an ASCAP member:
- Discount on membership to the Songwriters Hall of Fame
- Membership in the US Alliance Federal Credit Union
- Discounts on health, dental, instrument, and life insurance through the MusicPro program
- Discount on ASCAP Web Tools for online marketing and sales
- Discounts on any music-related purchases or services
- Travel discounts: hotel and rental cars
- Eligible for attending the annual ASCAP “I Create Music” Expo
Broadcast Music, Inc. (BMI) is another non-profit organization, marginally larger than ASCAP making it the biggest in the US. It represents over 12 million works from more than 750,000 members. As opposed to the small universal ASCAP fee, BMI is free for songwriters. Publishers, on the other hand, must pay $150 to enroll as an individual, or $250 to enroll as a company.
Perks of being a BMI member:
- Discounted registration for Billboard Latin Conference offered to to BMI Affiliates
- Discounted LARAS (Latin Academy of Recording Arts & Sciences) membership
- Discount on NXNE Music & Gaming Festival
- Video Games Live discounts at the LA show
- Billboard Touring Conference and Awards Offers Discounted Registration to BMI Affiliates
- Access to ArtistShare for songwriters, FanBridge, Musician’s Atlas, and Muzlink
SESAC is the only for-profit private company among the the big 3 PROs in the US. The business is based in Nashville and provides services for approximately 400,000 musical works from over 30,000 writers.
SESAC pays its members quarterly royalty checks just like BMI and ASCAP, but members also have the option to receive monthly radio royalty payments. The biggest difference between ASCAP, BMI, and SESAC, is that the latter is invitation-only.
Perks of being a SESAC member:
- SESAC directly deposits royalty payments
- 10% discount on Sprint products
- 15% discount on your first year at SongTrust
- 3 months of free membership to Musician’s Atlas online
- Airport parking discounts
- 10% discount at Berkleemusic.com
- 33% discount on American Songwriter Magazine
- Discount on Avis Rental cars
- MusicPro insurance discount
Conclusion: ASCAP, BMI, and SESAC
- ASCAP is the oldest and second-largest PRO in the US with lots of great benefits. It costs $50 to register. ASCAP takes the longest to pay out royalties—6.5 months after the end of each quarter.
- BMI is the largest PRO in the US, with free registration, but somewhat fewer benefits than the others. It pays out a bit quicker than ASCAP—5.5 months after the end of each quarter.
- SESAC is the smallest of the three and is invitation-only. It pays out royalties the quickest at only 90 days after the end of the quarter.