Songwriting 101: PROS and the Collection of Performance Royalties

I once met Otis Blackwell at a music event in Nashville. He suffered a stroke in 1991 and died in 2002 so, sometime before that, I was lucky to get to talk to this legendary songwriter and member of the Rock and Roll Hall of Fame.

In our brief conversation, he told me how hard it was way back for songwriters and even artists to collect any money from recordings, especially African Americans like himself. His biography tells the story of how, outside the Brill Building, he sold six of his songs to a publisher for $25 USD each in 1956. One of those songs was “Don’t Be Cruel.” Incidentally, he and Elvis never met.

In the biography of another legendary songwriter, Stephen Foster, the short profile refers to the fact that he received limited royalties in spite of his huge body of work and he is said to have died penniless. That means getting paid has been a problem for songwriters for over a century. Enter the PROs.

PROs are Performance Rights Organizations. Their formation in the U.S. to collect and distribute performance royalties followed the passage of the copyright law in 1790. In 1897, the Copyright Office became a department of the Library of Congress. ASCAP, which stands for the Association of Songwriters, Composers and Publishers, was the first PRO in the U.S., formed in 1914 and therefore, celebrating its one hundred year birthday in February of 2014. ASCAP calls itself “the only performing rights organization in the U.S. owned and run by songwriters, composers and publishers”: four hundred and seventy thousand to date.

ASCAP had a monopoly until 1939 when BMI was founded to compete. Like ASCAP, BMI, which stands for Broadcast Music Inc., is a non-profit organization and calls itself the “largest music rights organization in the U.S., representing over six hundred thousand members.” Unlike ASCAP, members have no say in the operation.

The third PRO is SESAC, founded in 1930 to “help European publishers with American performance royalties.” SESAC stands for the Society of European Stage Authors and Composers. The organization calls itself “the most innovative and fastest-growing performing rights organization in the U.S.” It has now broadened well beyond the European connection.

I should disclose that I am a songwriter and publisher member of ASCAP. But researching ASCAP and BMI initially, it was six of one, half dozen of the other. I didn’t personally find any major differences between the two. Both make significant contributions on behalf of the industry, lobbying for rights, and offering services to advance music careers. On the collection end, I can only tell new songwriters that the formula for paying performance royalties is survey-based and very complicated. I do know that ASCAP issues separate statements for U.S. and International royalties. Writer and publisher memberships require separate applications and there is a fee to apply. Unless you have some cuts with significant enough airplay and other performances that will show up on a survey, you would be lucky to collect pennies whatever PRO you join.

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