Performing Rights Organisations - Essay Example

Performing rights organizations (PROs) History of PROs Introduction The initial PRO was established on France in the 1850s. The UK’s copyright act of 1842 was the earliest to provide for musical masterpieces the PRS established in 1914 covering live performances. Rights for recorded or broadcast performance are administered by the MSC, which was established in 1924. In the U.S, the (ASCAP) was established in 1914, SESAC in 1930 and (BMI) 1939. SPACEM was founded in1953 and later altered its name to ACEMLA. Most of these PROs are non-profit oriented. ASCAP, BMI and SESAC, are the main PROs in US. ASCAP and BMI the dominant PROs collect a combined 96-97% of al performance royalties in the US. ASCAP, with 410,000 members, is the only U.S PRO created and controlled entirely by its members according their website. Its members elect the Board of ASCAP. Some of ASCAP members include Justine Timberlake, Beyonce and Steve Wonder. The fee for registration to become an ASCAP member is onetime, $35 for writers and publishers. Radio executives established BMI, and it encompasses over 475,000 members. BMI has a philosophy, which, is an open door to all disciplines that involve music. Notable affiliates to this PRO include Mariay Carey, Lady Gaga, Rihanna and Dolly Parton. Writers and composers pay no fee, but publishers pay $250 fee for application. SESAC conversely is the smallest PRO in the U.S and has a selective affiliation method of signing members. It is privately owned and rarely releases its financial figures to the public. The SESAC a site claims, which it is the fastest growing and technologically advanced PRO in the U.S. it has remarkable affiliates such as Bob Dylan Neil Diamond. There is no fee paid in SESAC for registration ((SESAC 2012). Functions of PROs PROs offer liaison functions, mostly royalty assortment between copyright holders and those who desire to apply the copyrighted works in public. The PROs royalties include their subscribed members, composers as well as music publishers. The PROs then distribute the royalties to their members, without the administration costs. The law allows people to perform on public only they have been permitted by the owner of the work being performed (Watson 2012). PROs track down cash on behalf of music publishers and songwriters whenever their music is played on the internet, television or clubs. The organizations that use the music pay a fee to the Pros, who in turn, pay their registered members as per their contract (Songtrust 2012). The PROS are also actively engaged in legal arenas representing their members. They are instrumental in charging those who violate the rights of copyright in courts or to the copyright royalty board of the library of congress in the US. The PROs are also in the forefront of lobbying on behalf of their members mostly in matters dealing with lawful royalty charges. They also distribute statistics of openly performed workings. They publish these works in their websites and other art sources for the public use. This is also a way of marketing themselves as credible and trustworthy organizations. They also keep statistics of how songs were played, when and how, and use those figures to pay the copyright owner (Choquette 2012). They offer licenses to those using their clients’ music. The most common issued license is the blanket license, which gives the licensee permission to play any music that is part of the catalogue of a given PRO over a specified period. This are often offered to lead radio stations, TV networks, clubs and any place where music is played publicly. Another license offered is the per-program license, which is issued on per program basis. Artists Who PROs Serves Artist lose a lot of money in revenues due to lack of capacity to collect their royalties when due. This necessitated the need to form a body that will assist these artists to collect their revenues. Performance rights organization took up the mandate to come to the rescue of artists to prevent their exploitation. The PROs serves songwriters and publishers. They are responsible for the collection and distribution of royalties among their members. The members of the PROs include publishers and songwriters (Choquette 2012). As for music creators, the most important source of income comes from the, deals the music creators’ sign with the recording companies and other individuals involved. How the PROS Different From Each Other In the US, there are different companies offering this royalty collecting services for various artists. The companies recruit artists to sign with them in order to have the authority to collect the revenues on their behalf. The most common companies in the US include ASCAP, BMI and SESAC. The PROs have different approaches in the recruiting of customers and their market share. Market Share ASCAP and BMI are the dominating companies in the PRO market. The two enjoy a lion share of the market. Their market share combined adds up to almost 97% of the royalty market. SESAC, however, is not as large as its two competitors boasting only a small percentage of the market. This is mostly due to their policy that employs the strategy of being selective on the customers they represent (Choquette 2012). The other two PROs, however, have adopted a more open policy. They tend to sign any artist condition being the artist has to have a commercially recorded product and that the work has, been released or is in the possession of a published sheet of music that has been printed or even the subject lays claim on a piece that is being performed and can prove it. The company SESAC is owned by a private entity hence it cannot be forced to divulge their financial records to the members of the public. It is also not obligated to divulge internal dealings regarding to royalties. Being a private company, SESAC has some level of privacy from the public (Songtrust 2012). Royalty Collections The major PROs in the American entertainment industry collect the artists’ revenues on their behalf of the artist. They are collecting revenues for the artists globally in hundreds of millions showing the amount of royalties artists earn in a year. ASCAP collected royalties in the region of 935 million in the year 2010. This is an enormous amount despite the company experiencing a reduction of 6% from the previous year’s record high. IBM was the second largest collector collecting 917 million in that same year. These figures vividly show the extent of dominance the two PROs enjoy in the market. The two firms combined distributed a combined amount of over $1.6 billion to its members. This is after the two companies deducted their operating costs from the total amount collected for the artist. This amount deducted was used to compensate the companies on the expenses incurred in their duties of collecting the royalties for the artists. Ownership Another difference that exists between the companies is their owners. The first company ASAP which in full stands for American Society of Composers, Authors and Publishers is owned by the artists themselves. Their board consists of 12 writers and publishers apiece. The board members serve two-year terms. The president is elected from members and in recent years, the writers have held this privilege. BMI the second largest PRO stands for Broadcast Music Inc; it was formed by members of the broadcasting industry. Its board consists of 13 members who are strongly associated to the broadcasting industry. SESAC, on the other hand stands for The Society of European Stage Authors and Composers. The company was originally formed to promote only gospel music and music from Europe but later ventured to other genres and styles. It is privately owned distinguishing it from the other two. It also prides itself for giving their services a personal touch (Coaching 2010). Distribution The three companies employ different methods of distribution. In the case of ASCAP, they use a complex but efficient way in their calculation of the amount of royalties owed to different artist. They use the method of basing their payments on the credits authors receive due to the airplay of their songs. They are multiplied by the weight credited to the song through the different types of airplay. All this factors are combined to obtain the credits. For BMI, the use the dollar figures for the different types of play. The time the song is played is a factor. These elements are combined to get the credits. Sound Exchange Sound exchange is a performance rights organization, but, in this case, it represents performers and recording artists. The purpose of this PRO is to protect recording artists. In order for an artist to be an affiliate of this PRO, the only requirement is the possession of a sound recording. The sound exchange handles collection of royalties for recording artist and distributes royalties among them. This is in order to prevent loss of revenue by recording artist. Conclusion PROs have helped artists immensely in ensuring that they get their due revenue from the royalties that are owed to them. They have proved a vital addition for artists in the entertainment industry. References ASCAP, BMI $SESAC: What’s The Difference? Songtrust. Retrieved on 25 April 2012, From: < http://blog.songtrust.com/songwriting-tips/pros-whats-the-difference/> Choquette, F. (2011). The returned value of PROs. music Law. Music business journal. Berklee college of Music. Retrieved on 25 April 2012, from; < http://www.thembj.org/2011/05/the-returned-value-of-ascap-and-bmi/> Coaching M. (2010). What is sound exchange and why you should care. Music consultant. Musician coaching.com. Strategy $ business planning for musicians. Retrieved on25 April 2012, from; < http://musiciancoaching.com/music-business/what-is-soundexchange/> SESAC was Established in1930 and built on service, tradition and innovation. about SESAC. SESAC. Retrieved on 25 April 2012, from; < http://www.sesac.com/About/History.aspx> Watson, C. J. (2012). Performing rights organizations. Netplaces. The New York Times Company. Web retrieved on 25 April 2012, from; Read More