What ASCAP, BMI, and SoundExchange have to do with your music

At first glance, the complexity of how copyright is monetized is enough to make the head spin. If you’re a musician, you may have heard  about these organizations in passing, but haven’t put together a complete understanding of them. In this article I’m going to break down the functions of each of these organizations, and tell you why each one is important and what is entailed in registering for each.

THE TWO SIDES OF MUSIC COPYRIGHT

Firstly, to grasp the differences between these organizations, it’s important to understand the nature of music copyright. When a song is written and then recorded, the resulting work has two “sides”: the Publishing side and the Master Recording side. It’s these two types of copyright that create the need for multiple collection agencies, as each agency receives payment for different types of revenue.

PUBLISHING SIDE
The publishing side refers to who owns the idea of the song itself. A song’s publishing is originally owned by everyone who contributed to writing the song. So, if you’re the sole song writer, then you own 100% of the publishing. When there are multiple songwriters, the publishing is split based on an agreement between the involved writers, usually arrived at by examining who made what contribution to the song. Often the ownership of a song’s publishing is split into the “music” half and the “lyrics” half, where everyone involved with writing the underlying musical bed of the track splits 50% of the publishing, and everyone involved with writing the main melody and words (or “topline”) splits the other 50%. However, this is up to the songwriters’ discretion and exists as a common template.

Additionally, because of publishing companies’ influence on copyright policy, the song’s ownership is split in half between the song’s writer and the song’s publisher. For an artist without a deal with a publishing company (aka a publishing deal), this is the same person. If you have a deal with a publishing company where they own/administer your publishing, you receive 50% (writer’s share), and the publishing company takes the other 50% (publisher’s share). There is also a hybrid of these deals called a co-publishing deal, where the artist retains all of the writers share and 50% of the publisher share, leaving the publishing company with the remaining 50% of the publishing share (or 25% of the total).

The writer and publisher shares also carry different actionable weight. The writer share is considered “passive”, while the publisher share is considered “active”. This means that those who own the publisher share are in control of what happens to that song, like issuing or denying licenses and selling or registering the song to other services. Those only owning the writer share have no control over the copyright and simply receive royalties as they come in.

MASTER RECORDING SIDE

The master recording side refers to who owns the rights to a specific recording of the song. A song’s master recording is usually owned by whoever fronts the money to cover expenses or labor associated with producing the recording. So, if you paid for the studio time, session musicians, and mixing/mastering engineer by yourself, you own the master recording.

A common practice for bands with multiple members is to pay for all album expenses out of the communal band fund, and the band entity owns the recordings. In this situation, it’s good to have the band registered as its own business so it can be properly assigned ownership of the master recording. Alternatively, depending on who contributes funds or services for the recording, the master recording can be split between all invested parties, including a studio owner or  recording engineer performing services without pay. Again, the way this ownership is divvied up is up to the discretion of the involved parties who invested in the recording process. A word of advice: It’s better to negotiate these things before the recording process has started to prevent assumptions and future conflict.

PERFORMANCE RIGHTS ORGANIZATIONS 

Performance rights organizations, or PROs, collect revenues generated by public performances of a song’s publishing, like radio, concerts, and streaming platforms like Spotify and Apple Music. In the United States, the three main PROs are ASCAP (American Society of Composers, Authors, and Publishers), BMI (Broadcast Music, Inc.), and SESAC (which used to be called Society of European Stage Authors and Composers, but since it is based in the US they have since opted to exclusively go by their acronym). These revenues are distributed to a songs’ publishers and writers.

When you release your music out into the world, any time that music is played, performed lived, or displayed in some way, it generates public performance royalties. It’s the PRO’s job to collect these royalties and pay the song’s writer(s) and publisher(s). So, the only real way for a songwriter to receive that revenue is by signing up with one of the PROs and registering their songs. If your songs aren’t getting a lot of plays or aren’t being performed frequently, these royalties will not amount to much. However, if your song gets placed on a prominent radio station or is performed live to a large audience, you could have some substantial royalties heading your way.

SoundExchange, another PRO that is a little different from the others, collects what are called non-interactive digital performance royalties. For a royalty to be non-interactive, it needs to be displayed in a way that is not controlled by the listener. This includes mainly different types of digital radio, like Pandora (internet radio), SiriusXM (satellite radio) and Verve (cable radio). SoundExchange is the only organization allowed to collect these types of royalties, as stipulated by US Congress. In order to collect any of these types of royalties, you’ll need to register with SoundExchange.

Additionally, SoundExchange takes 5% off the top of the royalties they receive and send it to the AFM SAG AFTRA fund, which is dedicated to paying studio musicians who participated in songs that have been deemed as having large success by a census. You can look up if you have unclaimed royalties at afmsagaftrafund.org

In conclusion, there are many types of revenue that music generates over a variety of circumstances and mediums. In order to collect them all, you need to be registered with all the different types of PROs. Hopefully you’ve learned a few things about music licensing and royalties!