Music copyrights are tricky to grasp, and understanding the role of a Performing Rights Organization in the Music Industry can be incredibly confusing.
PROs are a staple of the music publishing pipeline and play an essential role in collecting royalties for songwriters and composers. Read on to learn more about what PROs do and how they collect royalties for your music.
Copyrights
Copyrights are a legal system that protects the intellectual property of authors, composers, and artists. They are typically granted for a specific period. The duration varies from country to country and is generally based on the type of work.
When it comes to music, copyrights are essential for musicians because they allow them to make money from their work. They also protect the rights of music consumers to listen to and purchase original copies of songs.
To use a copyrighted song, a user must have a license from the copyright holder, like Soundtrack Your Brand. This license can be a master use or sync license.
Sync licenses cover the use of music in videos or other visual media, such as movies, advertisements, or video games. They’re often negotiated one-on-one between copyright owners and licensing parties.
It’s important to remember that copyright laws can be complicated for smaller businesses to understand. Even if using a copyrighted song is considered fair, it could still result in costly lawsuits that can hurt small businesses.
This is why songwriters and musicians must take the necessary steps to protect their work from copyright infringement. Copyrights can help them avoid expensive litigation and ensure they are adequately paid for their work. It’s also a good idea to get expert advice from a lawyer.
Licensing
Licensing is a complex and vital part of the music industry. It involves several rights holders and ensures that musicians are paid for their work.
The simplest way to describe licensing is an agreement between the copyright holder and a user of their copyrighted material. This can be anything from licensing a musical composition for use in a film to licensing a song being played on radio stations.
Primarily, the licensing process is regulated by Collective Management Organizations (CMOs) or Mechanical Rights Organizations (MROs). These organizations monitor and license clients’ performance and mechanical rights.
These organizations also oversee the collection and administration of songwriters’ royalties. There are numerous PROs worldwide, including ASCAP and BMI, in the United States.
Some countries, however, have a single PRO that all songwriters must register with. Germany, These organizations are crucial for songwriters’ livelihoods. They collect and administer all songwriters’ rights worldwide and ensure they are paid for their work.
Collection
Performing Rights Organizations collect license fees for songwriters and music publishers when their compositions are publicly played. PROs collect these royalties from the venues (radios, streaming services, and local businesses that broadcast music in public) that play them and distribute them to the songwriters or publishers who own the copyright.
The collection of royalties is an integral part of the music industry. It ensures that all music is played on the radio and in other public places, and songwriters and publishers are fairly compensated for their work.
Many Performing Rights Organizations also offer services like workshops, conferences, awards, and discounts. They are an excellent resource for artists and songwriters, but choosing one that matches your needs best is a good idea.
The US has three significant PROs: BMI, ASCAP, and SESAC. These are the “Big Three,” and each has a unique offering to artists.
SESAC is the only for-profit private PRO in the “Big Three. Membership is free for songwriters.
Streaming has become the most crucial source of recorded music revenue, accounting for almost half of the total income. However, while the music industry is expected to remain resilient, the long-term future of the core value chain may change. A new flexible monetization model could allow music labels and platforms to reinvest money from royalties in innovative ways that engage consumers.
Distribution
Performing Rights Organizations (PROs) play an essential role in the music industry, helping songwriters and publishers get paid for their work. These organizations also manage one of the most basic forms of revenue in the music publishing value chain – public performance royalties.
PROs collect licensing fees from businesses, venues, and others who perform a music piece publicly. They then redistribute those fees to songwriters, composers, and publishers. The PROs maintain catalogs or repertories of hundreds of thousands of songs.
While PROs are not the only companies that can help songwriters and publishers with their licensing, they are essential to the music publishing value chain. Understanding how they operate is an important step in ensuring that artists get paid for their music and understand the various revenue streams available to them.
In the past, most music distribution was focused on physical sales — distributors delivered CDs to stores and retailers and earned the right owners a share of the retail price of their albums. This model has been disrupted by the arrival of streaming services, where a rights owner’s revenue is not measured in physical units but instead based on the number of times their song is played or purchased.
