How Performing Rights Groups Funnel Money To Top Acts And Ignore Smaller Acts

from the nice-trick dept

Thu, Sep 10th 2009 10:55am — Mike Masnick

It's no secret that most of the traditional "recording industry" really is structured almost entirely to help the big name acts, but whenever we write about the collections organizations like ASCAP and BMI we get angry people sending in emails and comments insisting that it's unfair to lump those two in with the RIAA, since they're really out to help the actual musicians, even the small guys. Uh huh. Of course, we've already shown how ASCAP and BMI and their overly aggressive attempts to collect royalties from just about everywhere actually have been known to harm up-and-coming singers, such as by destroying the ability for many venues to host open mic nights. ASCAP has been particularly aggressive lately in making bizarre claims about how embedding YouTube videos requires a license (despite the fact YouTube already pays ASCAP -- so it wants to double count) and how ringtones represent a public performance. These are pure money grabs that make it that much more difficult for anyone to help promote up-and-coming musicians and songwriters. Is it any wonder, in the meantime, that the organization is spending time setting up efforts to try to push back against people who support open culture and content sharing? It apparently would prefer that the songwriters they "represent" not know about these efforts that actually do quite a bit to harm the vast majority of songwriters out there.

But, back to the original point. ASCAP, BMI and their supporters insist that they're not as bad as the big, mean RIAA, and that they're especially focused on providing important royalties to less well known artists. Except... even that may be questionable, at least when it comes to live performance royalties (admittedly, a smaller segment of overall royalties). Reader btr1701 sent in some email exchanges from a mailing list, which I won't share directly since I don't have approval, concerning a jazz musician trying to find out why she doesn't receive any live performance royalties, despite knowing that these organizations collect them, supposedly on her behalf. In response, she's told that ASCAP and BMI only distribute that royalty money to "the top 200 grossing US tours of the year." If you're smaller than that? Too bad. Except... they do have one minor exception. If you play "serious music" (no joke), then they'll pay you your royalties. So, the musician asks what is "serious music" and is told it's "generally considered to be classical music."

The musician tried re-registering her own (jazz) compositions as "serious music" but it "does not appear to have made any difference whatsoever" and she notes that she is "yet to receive a single penny... for any US performance or radio broadcast of any kind" despite the fact that her music has been performed in the US for almost ten years, and "the vast majority of performances of my music take place in the US."

I went looking for some more details, and it appears that, indeed, ASCAP and BMI have a policy in place to only provide performance royalties to the top 200 grossing tours in the US. If you're a "smaller" act, the only way to get paid is to be an opening act on such a tour. Otherwise? Too bad, you're on your own. Aren't you glad you signed with ASCAP or BMI? Update Good clarifications in the comments on this. Despite what the musician was told originally, it appears that it's not that ASCAP and BMI only pay the top 200 tours, but that they only monitor them (it's not explained how they know ahead of time which are the top 200) in order to figure out who to pay. The end result, of course, is functionally quite similar. If they're only monitoring the top 200 grossing tours, then the likelihood of them finding out about songs from less well known composers is close to nil. But those big names? They get more than their fair share.

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Filed Under: collections societies, money, royalties
Companies: ascap, bmi

35 Comments

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C.T., 10 Sep 2009 @ 11:18am

They Monitor the Top 200
Mike,

I can't speak to the email chain, but I think you have misunderstood the policy you're referring to. The policy is that ASCAP/BMI actively monitor the set lists of the top 200 grossing touring acts. That is, they have agents at each concert put on by these acts in order to see if they are playing cover songs for which compensation must be paid. This does not mean that only the top 200 touring acts are eligible to get paid. Indeed, if one of these (top 200) bands plays a cover song of a smaller artist, the smaller artist would be paid accordingly.
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jilocasin (profile), 10 Sep 2009 @ 11:35am

Re: They Monitor the Top 200
Then are _all_ artists getting paid by ASCAP/BMI?

How do they determine who and how much to pay them?

Why isn't the subject of the story apparently getting _any_ money?

Perhaps all the ASCAP/BMI artists that frequent this board can share with us whether or not they have received _any_ money from either of these organizations....
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Rose M. Welch (profile), 10 Sep 2009 @ 11:37am

Re: They Monitor the Top 200
Then why wasn't she?
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dorp, 10 Sep 2009 @ 11:37am

Re: They Monitor the Top 200
The policy is that ASCAP/BMI actively monitor the set lists of the top 200 grossing touring acts.

Judging by that sentence alone seems like you are making stuff up. How do they know the top 200 grossing touring acts until after all the shows have gone through?
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Ima Fish (profile), 10 Sep 2009 @ 11:41am

Re: They Monitor the Top 200
No, I think you're misunderstanding it.

All venues pay into ASCAP/BMI for the live acts they have. ASCAP/BMI both collect all of that money for all such live performances at the venues. However, ASCAP/BMI only pay out for the top two hundred bands.

So out of thousands upon thousands of live performances the ASCAP/BMI collects upon each year, they are only paying out on a tiny portion of them.

Exactly where is the rest of that money going?
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C.T., 10 Sep 2009 @ 11:47am

Re: Re: They Monitor the Top 200
Read the link that Mike provided in his post. It indicates that the top 200 touring acts are monitored for purposes of compiling the "true count" survey. This survey is used in calculating how royalties are distributed. Thus, if a top 200 touring act were to cover a song by a smaller artist, it would factor into the compensation the smaller artist is to receive.

Look... I'm not here to defend the payment methods used by ASCAP/BMI. I totally realize that smaller artists aren't necessarily getting their fair due. However, what Mike has reported is incorrect. There is no policy under which only the top 200 touring acts are eligible for payments stemming from live performances.
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Ima Fish (profile), 10 Sep 2009 @ 12:00pm

Re: Re: Re: They Monitor the Top 200
The simple fact is that out of the top 200 tours, the vast majority of performers do very few covers. And if a major act does perform a cover, it's usually a song by another major act.

Most musicians who cover music do so in smaller places such as bars or night clubs.

I know from experience from the 80s and 90s that when we played in bars we'd have to turn over our set list to the bar so it could turn it over to ASCAP/BMI. The thought was that the song writers of the songs we were covering were getting paid for our performances. But, apparently, that's not true. Apparently, ASCAP/BMI collects such money, but never dishes it back out.

So sure, if Brittany Spears does a Rolling Stones cover on her tour, the Rolling Stones will get a cut. But if my band does a Husker Du cover at a local bar, Husker Du does not receive a dime, even though ASCAP/BMI does collect money for our performance.

Once again, a lot of money goes in, but only a little goes out. And when it goes out, it goes almost exclusively to major artists.
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Matt (profile), 10 Sep 2009 @ 12:05pm

Re: Re: Re: They Monitor the Top 200
ASCAP/BMI use sampling to decide what royalties are due. Take radio stations - ASCAP/BMI listen to radio stations, and write down every song that is played for some period of time (mechanically, this is not correct, but it is good shorthand). Then they multiply the number of times the song was played by a conversion factor (based on the size of the radio station, its format, etc.) that gives them a number of "credits." The credits decide what portion of royalties that author gets. For live performances, ASCAP/BMI sample the 200 big tours, plus advertised classical music concerts and recitals. Again, they figure credits, and divide the royalties charged to each venue by the credits that were collected.

But this doesn't mean ASCAP/BMI are not screwing the little guy. They are, they are just more subtle than having a policy of denying payment to small acts. The trouble is that there is pretty obvious sample bias. Radio stations and big tours will tend to play music by popular artists. That does not mean that less popular artists' music is not being performed, merely that it is not being performed in the venues from which ASCAP/BMI choose to sample.
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SteveD (profile), 10 Sep 2009 @ 12:07pm

Similar situation in the UK
If you look at the big collection body in the UK, the PRS (something Mike has covered in the past) then you get a similar picture.

To determine how to distribute royalties the body gets the major radio stations to submit full lists, but it only does random sampling of the playlist of the smaller regional stations, clubs, bars and licensed premisses.

These methods made sense in an analogue world where it was impractical to collect such comprehensive data, but not in a digital one.

The problem with random-sampling methods is that its not likely to pick up the one-off plays of smaller artists, and their share goes to the big artists instead. That makes it hard for a new artist to get much return from royalties even if he's getting some airplay.

In PRS's defence they do give a proportion of the cash to charities that support young artists, but it does seem like their methods could do with updating.
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Matt (profile), 10 Sep 2009 @ 12:08pm

Re: Re: Re: Re: They Monitor the Top 200
That is to say, what Ima Fish said. Only differenter.
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zellamayzao, 10 Sep 2009 @ 12:10pm

Re: Re: Re: Re: They Monitor the Top 200
Thats why you dont tell them you are going to do a Husker Du song and just change one of you other planned songs on the fly that way you can honor Husker Du and stick it to the man. So to speak.

ASCAP/BMI have the nerve to collect "royalties" for music they probably would have not liked to have released and isnt considered "serious music". All music is serious music when it comes to the musicians. They take their hard earned money, time, sweat and emotion into their music and deserve to be compensated by the people claiming to be working in their best interest.

And further more, I wouldnt be surprised if nobody at either one of those agencies has even heard of Husker Du
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jdandrea (profile), 10 Sep 2009 @ 12:20pm

Fact checking, part deux
OK, instead of quoting out of a book for "more details" ... let's go to the source:
- BMI: How We Pay Royalties
- ASCAP: How You Get Paid
Now, can someone please point out areas from BMI's and ASCAP's own material that illustrates how smaller acts are being ignored? (I'm not saying it isn't true! I'm saying I'd like to use the org's own source material as the basis, vs. a book passage, 'tis all.)
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Hephaestus (profile), 10 Sep 2009 @ 12:27pm

What a screwed up system .....

This is not going in my business plan in any way shape or form.

how in the hell did they get away with implementing something so screwed up?
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zellamayzao, 10 Sep 2009 @ 12:27pm

yeah!!!!!!!!
rabble rabble rabble they took our jobs!!!!!

sorry its all i could think to say
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Matthew Cruse (profile), 10 Sep 2009 @ 12:56pm

Re: They Monitor the Top 200
So after reading poth the post and the book that was linked to about how BMI/ASCAP work, my understanding is, if I am a performer/writer/publisher who has a string of wildly popular long running songs that are part of the cultural landscape (Rolling Stone, Doors, Beatles, Metallica, Nirvana etc...) and my songs are played lots and lots in the following key slots: Radio 1 stations, Major motion pictures, Prime time Telivision, Weekend television after 1 pm, major concert venue; then I get a gazillion Dollars per song performance from BMI/ASCAP. If I am some little schmo who plays a lot of songs that I wrote, plays almost every night for years and years, in small venues all over the country (and these venues pay into ASCAP/BMI on my behalf) then I get Zip/Squat from ASCAP/BMI? No wonder everyone hates these guys
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Mechwarrior, 10 Sep 2009 @ 12:56pm

So ,if the 201st grossing act plays a song, does the original artist get paid? This women has supposedly said that her music has been played for the last 10 years and has yet to receive money.

These two statements :
1) ASCAP and BMI use counters with top 200 acts to divvy up royalties
2) Jazz Musician has not been paid live performance royalties on her music

indicate that money isn't routed to people whose music is not played by popular groups or classical groups.
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Mike Masnick (profile), 10 Sep 2009 @ 1:01pm

Re: Re: Re: They Monitor the Top 200
Good point. Added a clarification note to the post. Thanks. Though, reading through the emails sent to that artist, her "representative" from one of these societies certainly appeared to be claiming that she wouldn't get paid if she wasn't on one of those top 200 grossing tours.

The artist had asked to be compensated for a specific performance, and her rep asked specifically if that performance was a part of a major tour or festival, and said if not, there was nothing he could do.
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Shawn (profile), 10 Sep 2009 @ 1:06pm

Re: Re: Re: Re: Re: They Monitor the Top 200
How is that sticking it to the man? The club is paying ASCAP/BMI whether he plays the Husker Du or not.
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Shawn (profile), 10 Sep 2009 @ 1:08pm

Re: Re: Re: Re: Re: They Monitor the Top 200
How is that sticking it to the man? The club is paying ASCAP/BMI whether he plays the Husker Du or not.
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Matthew Cruse (profile), 10 Sep 2009 @ 1:11pm

Re: Fact checking, part deux
From BMI: "POP CONCERTS:BMI uses an independent source of pop concert information to create a database which is used to solicit concert set lists. We compile these responses and determine semi-annually which musical acts were among the 200 top-grossing tours. A royalty payment is calculated for each BMI-licensed work used in the opening and headliner’s acts in each of these top musical tour set lists. Since the number of BMI-licensed works changes from one semi-annual period to the next, as do the license fees collected by BMI from concert promoters and venues, the royalty rate for your works performed in live pop concerts also changes each period. Each song used as part of a medley during a live pop concert will be assigned one-half of a full credit rate." From ASCAP:"The following chart outlines the various media, including broadcast, cable, on-line, and live shows, where we conduct a complete count of performances and where we conduct a sample survey. It is important to remember that as digital information becomes more readily available, ASCAP expands our complete count of performances and relies on samples only where it is necessary." And from that Chart under the title Live Concerts "All songs performed in the 200 top-grossing concert tours, as well as selected other major live performance venues, covering headliners and opening acts; Live symphonic and recital concerts " So, I think Mike got his facts right. What he saaid in his post seems to Directly Quote from the actual organisations. For Live Performances of a non classical/symphonic nature, if you are not included in one of the 200 top grossing venues of trhe year, you don't get squat
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anymouse (profile), 10 Sep 2009 @ 1:23pm

How can they distribute 200% and still operate as a non profit?
I reviewed some of the 'material' linked to, and the first thing that I noticed is that they can't even do basic math..

"BMI considers payments to songwriters or composers and to publishers as a single unit equal to 200%."

200% of what? How do you distribute 200% of what you collected and still have anything left to operate on UNLESS you don't actually pay everyone who should be receiving a payment? If I collect $10 from 10 people, I have $100, now if I want to distribute 200% to those same people, I can do that for the first 5 people(who would receive $20), the next 5 would receive nothing (and there would be no money left to operate the non-profit), based on this 'simple' math it's pretty easy to see that they are not paying everyone they should (especially at their inflated 200% level) or they would be bankrupt.

So their own material basically explains how they collect from everyone and then distribute 200% to some of the people who they collected on behalf of (if they paid everyone they were supposed to at these rates, they would be bankrupt).

I'm sure some shill will come along to explain how this is all 'for the artists' (they just don't specify that it's 'for the top 200 artists').
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zellamayzao, 10 Sep 2009 @ 1:28pm

Re: Re: Re: Re: Re: Re: They Monitor the Top 200
if they have a set of completely original work and are not represented by ascap/bmi for their printed material and submit their set list to the bar why would he have to pay ascap/bmi any money if they do not represent them? and if they decide in the middle of the set they want to perform a cover song and the bar owner forgets to mention to ascap/bmi a song was changed and a cover was performed then i dont see them getting a money.

I could be wrong, it was just how I thought it might play out
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Bas (profile), 10 Sep 2009 @ 1:29pm

Interesting piece.

I wonder if artists start suing these organisations would bring about more change than these organisations suing the fans of said artists.
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Doug B (profile), 10 Sep 2009 @ 1:37pm

Don't forget the scumbags at SESAC
My wife recently opened her own dance studio and we paid license fees to BMI and ASCAP. We left SESAC out because none of her music is licensed by SESAC. Of course that didn't prevent them from sending us threatening letters. Sadly my wife relented and simply paid their extortion fee to get them off her back.

Anyway, it's good to know that that money is not going to the people whose music she uses but rather whomever BMI, ASCAP and SESAC decide deserves it.
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Some Shill, 10 Sep 2009 @ 1:43pm

Re: How can they distribute 200% and still operate as a non profit?
This is all for the artists. It is important that the artists are paid for their work.
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NullOp, 10 Sep 2009 @ 2:08pm

HA!
Nobody but NOBODY is out to help the musicians! Not nobody, not no time! Everyone is out for a piece of the musical pie and its a mighty big pie! Don't believe for a second anyone is here to help.
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Shawn (profile), 10 Sep 2009 @ 2:15pm

Re: Re: Re: Re: Re: Re: Re: They Monitor the Top 200
I believe that ASCAP/BMI collects collection money .... (License Fee) on a venue per year not per performance. Now they may calculate the license price based off of the amount of 'member artist' work used but I think it is a capacity based calculation rather than content based.
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Danny (profile), 10 Sep 2009 @ 2:26pm

class action?
I am not a lawyer, but it strikes me that all of the acts not in the top 200 would have a pretty strong class action suit against ASCAP and BMI. And if they pulled off that suit (without an early settlement) they would do some real damage to the current royalties structure.
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Leviathant (profile), 10 Sep 2009 @ 2:30pm

Weird, that's not been my experience.
For your anecdote, I give you my anecdote!

My wife is a composer (you may have heard about a piece she had performed this past weekend, The Gonzales Cantata) - and she had a piece performed at the Kimmel Center in Philly. Much to our surprise, we got a note from ASCAP a few months later for that single performance of a single song. Mind you, we didn't actually get paid for the performance, because ASCAP's fees were taken out of the check, but I was still surprised that they'd tracked that down.
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Mike Masnick (profile), 10 Sep 2009 @ 4:11pm

Re: Weird, that's not been my experience.
My wife is a composer (you may have heard about a piece she had performed this past weekend, The Gonzales Cantata) - and she had a piece performed at the Kimmel Center in Philly.

I'm guessing that's considered "classical" music, and thus "serious music." Which is apparently an exception to the "only top 200 acts." So it did get counted...
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TFP, 11 Sep 2009 @ 1:29am

Re: Weird, that's not been my experience.
As mike said, sounds like classical, but also, as she didn't actually get any money, how does that make it better than a pirate downloading her contata? she still wouldn't get any money, but loads more people would be aware of her.

/jk (ish).

Tony P.
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hmm, 11 Sep 2009 @ 5:40am

one big question is why the hell is "classical" music considered to be better than everything else and gets a cut regardless? isn't that some form of discrimination against certain ethnic groups whose music although popular (and in some cases these songs go back hundreds of years) gets exactly diddly-squat from ASSCRAP/BMI?

Whats the legal definition of "classical" music because a lot of heavy metal (and pop songs come to think of it) can involve orchestra's as backing....
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Tom, 11 Sep 2009 @ 6:34am

PRS in the UK
i joined the PRS in the UK inthe early 90's. For the first few years i got cheques for £50 each year - i got the impression that all members got a split of what was left over. Then it stopped. I still get sent the PRS magazine where it announced that from then on only the top earners were going to get a split of the left-overs. It seemed to imply that it would all go to Elton John.
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albert, 5 Nov 2011 @ 3:04pm

royalties
Why are bmi and ascap immune
to audits?
how come I consistently get
paid (nominally),
for works that I know
have never been recorded or
performed because they barely
have a worktape.
Always from a foreign country.
Having had songs recorded
and performed for the last
18 yrs., I still don't understand
the collection method,
I have been ripped off
with ascap and bmi.
If a top 5 song earns a
Songwriter who co-wrote
The song and owns no pub.
Roughly 200,000 dollars
For the writers share,
I have to imagine that
The pro's are collecting well over a million dollars for that title.
Then sitting on that for
9 months collecting interest.
Wrong on so many levels.
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Reality bites, 14 Sep 2014 @ 9:40am

Corporate parasites always steal, its what they are.
RIAA, MIAA, and all other made up pretend benefactors of the artists are nothing but lying criminal parasites.

The entire history of artists there has always been a lying parasite there beside stealing their work, saying they are protecting and promoting, while pocketing and stealing.
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