Now that we’ve covered Publishing and Mechanical Royalties, it’s time to briefly discuss performance royalties.

The most lucrative part of music publishing is performance royalties.

When a song is played on the radio or television, used by businesses for commercial music, or even used by DJ’s while spinning records at clubs or by bands performing at a club, performance royalties are paid. Popular songs like Lil Wayne’s “A Milli” or Beyonce’s “Irreplacable” can earn millions through the collection of performance royalties. However, it would be costly and time consuming if labels or publishers had to issue licenses to each club or business who wish to play their song. Instead, publishers and writers sign up with Performance Rights Organizations (PROs) so that they can collect these royalties on their behalf.

There’s three major PROs in the United States: the American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and the Society of European State Authors and Composers (SESAC).

When you, the songwriter or publisher, become a member of one of these three organizations, you are basically entering into blanket license with the PRO since you will be selling music for profit. Fees can range from less than $100 for a small company using music to enhance their product, to $100,000 or millions of dollars for large-scale broadcasting entities. PROs in turn monitor radio and television broadcasts and, using a complex statistical model, pay publishers and songwriters based on projected actual uses of a song. When your composition/song is registered with a PRO, you will need to inform the PRO what percentages of royalties are to be paid to you and your publisher. The PRO will then issue separate payments to the publisher and to the you (and your songwriting team). You can only be registered with one PRO at a time to avoid confusion as to which PRO is responsible for collecting performance royalties on the songwriter’s behalf. The use of blanket licenses allows an artist to perform compositions written by another songwriter without first requesting the songwriter’s permission.

The final area of discussion is Synchronization Royalties. We will relay more of that information to you in our next segment of Music 101. Stay tuned!