ASCAP, BMI, SESAC: Key Differences and Functions in the Music Industry

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Last updatedLast updated: April 22, 2024
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As a musician or an artist, one of the paramount aspects of your career is undoubtedly the monetization of your creativity. It’s important to comprehend that royalties are not just conjured out of thin air; they usually stem from the diligent work of a Performing Rights Organization (PRO). If you’re yet to affiliate yourself with a PRO like ASCAP, BMI, or SESAC, there’s a high likelihood you’re not getting all the royalties you’re entitled to. This comprehensive guide is tailored to help you understand the complexities of choosing between PROs.

What Exactly is a Performing Rights Organization (PRO)?

PROs provide crucial intermediary services between copyright holders and those who wish to ‘perform’ copyrighted works. They ensure that artists, composers, and publishers get paid when their work is performed publicly. A public performance can vary from being played on radio, TV & streaming services to being performed live at a gig or even being played in shops, bars & movies.

PROs collect royalties for rights holders, distributing them to the members and ensuring all music-playing locations are appropriately licensed. They essentially license, collect, and distribute public performance royalties for their members.

Public performance generates approximately $3 billion of ROI in the USA alone. If you’re a composer, songwriter, publisher, recording artist, or any other copyright owner, and you want to receive royalties for your music being played publicly, you need to become a member of a PRO. Let’s delve into the USA’s top three PROs: ASCAP, BMI, and SESAC.

Deep Diving Into ASCAP, BMI, and SESAC

While all PROs offer similar features and services to ensure members receive their due payments, the choice of which PRO to join is highly personal. It largely depends on the unique benefits that come with each service, such as conferences, awards, workshops, partnerships, discounts, and more.

American Society of Composers, Authors, and Publishers (ASCAP)

Starting our deep dive, ASCAP is the oldest working PRO, launched back in 1914. As the second-largest PRO in the US, it proudly represents approximately 10 million works from nearly 660,000 members.

Membership Fees and Notable Members of ASCAP

For publishers and songwriters, there’s a one-time registration fee of $50. Renowned members of ASCAP include prominent figures like Ariane Grande, Katy Perry, Kelly Clarkson, and Justin Timberlake.

What Sets ASCAP Apart?

You may wonder, “Why should I join ASCAP?” ASCAP offers an array of benefits, which include:

  • Membership discounts to the Songwriter’s Hall of Fame.
  • Membership in the USA Alliance Federal Credit Union.
  • Discounts on dental, health, instruments, and life insurance through the MusicPro program.
  • Discounts on ASCAP’s web tools for digital marketing, selling, and more.
  • Discounts on music-related retail products and services.
  • Vehicle rental and hotel discounts.
  • Access to the annual ‘ASCAP I Create Music Expo’.

Broadcast Music Inc. (BMI)

As an acronym for Broadcast Music Inc., BMI stands as the largest PRO in the US. Representing roughly 12 million musical works and over 750,000 musicians, BMI offers free membership for songwriters. For individual publishers, it costs $150, while companies need to pay $250. BMI’s notable members include Lady Gaga, Kendrick Lamar, Taylor Swift, Carrie Underwood, and Sam Smith.

What Makes BMI Unique?

BMI also offers additional benefits, such as:

  • Discounted registration for the Billboard Latin conference, exclusive to certain BMI songwriters.
  • Access to BMI Live allows songwriters to register their live performances to collect royalties.
  • Discounts on music-related retail products and services.
  • Vehicle rental and hotel discounts.
  • Access to the BMI catalog for filmmakers and advertising agencies.

SESAC (Society of European Stage Authors and Composers)

Lastly, we have SESAC, the Society of European Stage Authors and Composers. Contrary to what the name suggests, SESAC is not European-based. It is, in fact, an American PRO that covers all types of music genres. SESAC is considerably smaller than its counterparts, with an estimated 30,000 members. Notable members include Adele, Bob Dylan, and Neil Diamond.

How is SESAC Different?

What sets SESAC apart from ASCAP and BMI is its selective membership. To become a member, you need to be invited, which makes it more exclusive. It can result in more personalized attention but also makes it a more difficult PRO to join.

SESAC members also enjoy various benefits like:

  • Health insurance plans through an external company.
  • Discounts on music-related retail products and services.
  • Exclusive access to SESAC events and award shows.

How Does a PRO Work?

With an understanding of what PROs are and a general overview of the major ones – ASCAP, BMI, and SESAC, let’s delve into the mechanisms of how a Performing Rights Organization functions.

PROs operate based on copyright law. The United States governs this law by the Copyright Act of 1976. Under this act, copyright holders have exclusive rights to perform their works publicly. To effectively administer these rights, musicians, and composers often turn to PROs, who act as intermediaries, ensuring that they receive due compensation for the use of their copyrighted works.

Licensing and Collecting Royalties

The first major role of a PRO is to issue licenses for the public performance of musical works. When a business, such as a radio station, TV network, bar, or even a website, wishes to perform music publicly, they need a license. This is where PROs step in, issuing what is typically known as a ‘blanket license’ that covers all the music in their repertoire. The fees for these licenses can vary depending on factors such as the size of the establishment, the number of times the music is performed, and how the music is used.

Once the license is issued and the fee is paid, the PRO collects the money and adds it to their royalty pool. These license fees form the bulk of the royalties that are later distributed to the artists, composers, and publishers.

Tracking and Distribution

The second key role of a PRO is to track where and when the music from their catalog is performed. This process can be quite complex, especially considering the number of places where music is publicly performed. To handle this, PROs employ a variety of methods, such as digital monitoring and surveys, to accurately track the use of music across different platforms.

Once the data is collected, the PROs use a mathematical formula to calculate the royalties due to each of their members. This formula can vary between PROs and takes into account factors such as the duration of the song, the time of day it was played, and the platform on which it was performed.

After the royalties are calculated, the PRO distributes the money to its members, usually on a quarterly basis. The distribution is typically split, with 50% going to the songwriter and 50% to the publisher.

What Are the Key Differences Between ASCAP, BMI, and SESAC?

Understanding the key differences between the major PROs can help you decide which one to join.

  1. Size and Repertoire: BMI is the largest PRO in the United States in terms of the number of works it represents, followed by ASCAP and then SESAC. This means that BMI has a larger pool of music to license, but it also means that it has more members to whom it needs to distribute royalties.
  2. Fee Structure: Both ASCAP and SESAC require a one-time registration fee ($50 for ASCAP and varying for SESAC), while BMI offers free registration for songwriters.
  3. Openness of Membership: ASCAP and BMI have open membership, meaning any songwriter, composer, or publisher can join. SESAC, on the other hand, operates by invitation only, making it the most exclusive of the three.
  4. Payment Schedule: All three PROs distribute royalties quarterly, but the schedule can vary. It’s advisable to check the exact distribution schedule of each PRO on their respective websites.
  5. Additional Services: Each PRO offers a variety of services and benefits beyond royalty collection and distribution, including educational programs, workshops, awards, and discounts on music-related services.

By understanding the key differences between these PROs, you can make an informed choice that best suits your needs as an artist or composer.

Final Thoughts

Understanding the role of PROs and how they benefit your music career is critical for musicians, composers, songwriters, and publishers alike. By joining a PRO, you’re ensuring that you’ll get paid every time your music is played publicly. Choosing the right PRO is a decision that should not be rushed. Thorough research on each PRO, understanding what each one offers, and assessing which one aligns best with your personal and professional goals is vital. Remember, royalties are a significant part of your income as a music professional, and you should always strive to maximize it through the most fitting PRO for your needs.

In this vast world of music, ASCAP, BMI, and SESAC remain three major pillars, each offering unique benefits, serving their members, and promoting a healthy ecosystem where artists are rewarded fairly for their craft. Choosing your PRO wisely is your stepping stone into a lucrative music career. It’s a decision that is as personal as it is important. So, take your time, do your research, and make an informed choice.

And remember: without music, life would B flat. So keep creating, keep performing, and ensure you’re getting the recognition and remuneration you deserve.

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