The Performance Right in the United States

     

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec

     

     

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec

     

     

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec

     

     

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec

     

     

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec

 

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec

     

     

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec

 

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec

     

     

 

The Performance Right in the United States

 

    One of the most financially lucrative rights of Copyright not only in the U.S. but also in foreign countries, is the Performance Right. It forms the basis of the continuing compensation that songwriters, composers and their representatives, music publishers, receive for the use of their copyrighted musical compositions throughout the term of copyright. This right comes into play in practically every situation, with the exception of the home, where musical compositions are performed- whether its songs played on the radio, on network, local or cable television, on audio or audio visual streaming services, in the live concert area, at sporting events or on a university campus, among others. Basically, the right requires permission from and in many cases, compensation paid to the copyright owner anytime a copyrighted musical composition is used.

    In each country of the world, writers and music publishers join Performing Rights Organizations (PROs) which  in turn negotiate license agreements with the users of music, collect the license fees and then pay the writers and music publishers whose works are performed in each specific licensed media. Throughout the world, the annual license fees from this right are in excess of 8 billion dollars. 

    In the U.S, writers and publishers have the option of joining one of four collection organizations involved with this right. The four U.S. PROs are the American Society of Composers, Authors and Publishers (ASCAP), a writer and publisher non-profit membership association formed in 1914, Broadcast Music Inc. (BMI), a non-profit broadcaster owned corporation organized in 1939, SESAC, originally a family owned company founded in 1930 and now a for-profit corporation acquired in 2017 by the private equity firm Blackstone and Global Music Rights (GMR), a for-profit corporation created in 2013. Writers and publishers sign contracts with these organizations whose governing documents set forth the terms of association, the payment rules, the duration of the contract as well as the termination/ resignation procedures if one wanted to leave and move to another organization for representation. It is important to keep in mind that the writer and music publisher membership and affiliation contracts as well as payment schedules, practices as well as organizational structure and philosophy are entirely different for each U.S. PRO- an important consideration for the over 1.6 million writers and music publishers currently associated with these organizations.

    As to the total revenue that comes into each PRO, ASCAP and BMI’s annual receipts are in excess of one billion dollars each and both organizations have “open” membership policies-anyone can join as long as they meet minimum requirements. SESAC and GMR, much smaller organizations, do not provide financial information to their writer or publisher affiliates nor do they have an  “open door” membership/affiliation policy-one has to be invited to join. The main areas of the approximate 2.8 billion dollars of U.S. PRO revenue are broadcast, local and cable  television ($735 million), terrestrial and satellite radio ($445 million), general licensing ($450 million), new media ($500 million) and incoming foreign country royalties for U.S. copyrighted works being performed outside the U.S. ($700 million). Most of the foreign incoming money is writer money as most music publishers collect their foreign performance monies directly from the foreign territory PRO either as a direct member or via a sub-publisher. Performance monies flow between collection societies via reciprocal agreements which allow each foreign country PRO the right to license all other PRO’s repertory in their country.

    The license agreements between the PROs and music users are either negotiated or court set and are based on, among other things, a % of advertising gross receipts or revenue, an annual flat dollar amount, an industry wide non-revenue negotiated fee, intensity of music use, seating capacity, price of admission and the number of full time students in the case of a university.

    The primary types of license agreements are the Blanket license which gives a music user unlimited access to a PRO’s entire catalogue of compositions, a Per Program license where a broadcast station pays a fee only for each program that uses a specific PRO’s repertory that is not directly licensed, a Carve Out/ Adjustable Fee Blanket license which reduces the blanket license fee by the amount of music directly licensed, a Direct license where a PRO writer and publisher grants to a music user the right to publicly perform the music needed thereby bypassing the PRO system and a Source license where a PRO member makes an agreement with an entity that produces and supplies programs granting the right to authorize others to publicly perform their music. Additional types of licenses include a Through to the Audience license and a Per Segment license. Practically all licenses now cover online uses and transmissions in the media being licensed.

    It is important to note that there are a number of factors affecting license fee negotiations in this area. As to ASCAP and BMI, they have been under Consent Decrees with the Department of Justice since 1941. These decrees, which have been amended a number of times over the years and which are currently under review, regulate to a certain degree how these organizations operate in the licensing area. Two of the most important aspects of these decrees concern the ability of writers and publishers to directly license their works to a music user and thereby bypass these organizations licensing structures and the designation of rate courts (U.S. Southern District of New York federal court) to decide what license fees should be in any area if the user and ASCAP or BMI cannot voluntarily come to an agreement as to what “reasonable fees” should be for the use of each PRO’s repertory. SESAC is not under a Consent Decree but due to anti-trust litigation and settlements with the local radio and television industries, mandatory binding arbitration is required when voluntary fee agreements cannot be reached. As to GMR, they are currently unregulated with no license fee dispute resolution procedures in place except for copyright infringement litigation for unauthorized performance of copyrighted compositions in the GMR repertory. Further, as opposed to the non-exclusive nature of the ASCAP, BMI and SESAC membership and affiliation agreements, GMR’s contractual agreements with its writers and publishers are normally exclusive.

 

Copyright, 2019 Jeff Brabec, Todd Brabec