Why You Should Think Twice Before Joining ASCAP, BMI or SESAC Part I
It’s one of the top 10 questions I’m asked: ASCAP, BMI or SESAC? Which one should I Join? Here’s a rock ‘n’ roll answer: How about none of them. At least not right away.
All of these competing Performing Rights Organizations (PROs) spend a great deal of their members’ money selling “belonging” as if there is an immediate benefit to membership, like collecting money that they have been holding for you. But experience indicates that you’d be better off waiting to sign with any of them. Wonder why? Here’s the truth about PRO’s in this three part series taken from Moses Avalon’s latest book, 100 Answers to 50 Questions on the Music Business.
Moses Avalon
ASCAP (American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc.) often called the “Coke and Pepsi” of performing rights organizations, will both tell you it is irrational not to join one of their organizations. They collect the bulk of all the performance royalties in the US, and will assure you that you cannot get your share unless you are a member.
Orig Photo By: Stuart Pilbrow
In their pitch they will make it sound as if your music is already out there earning money and the PRO is just holding it for you, like a bank, waiting for your application. But the truth is that unless you write a hit song, or a soundtrack for a TV show like The Simpsons you are unlikely to see any significant royalties, even if you are a member.
That said, the real question is not whether to join, or which one to join, but rather when is the right time to join either ASCAP or BMI (SESAC is by invitation and so the pros and cons outlined here are not really applicable.)
Many people who are new to the industry think they should sign with one or the other as soon as they can. The lavish events that both ASCAP and BMI host make one think that joining means there is an immediate chance to collect money. This is not true. Even if you are a member, you only get paid if:
1. There is money to collect for your musical works and, more importantly…
2. That you meet their requirements to receive money after you join.
Yes, signing a deal with a PRO, like so many other deals in the music business, is a guarantee of nothing.
In fact, it’s entirely possible that after you commit to a PRO, your song(s) could be earning money for them, but the PRO is paying you nothing in return. (See Part III about the pooling system for more on that.) Sounds crazy right? It is sad, but true. So, unless one of the PRO’s offers you a financial incentive to join, you should wait until you have written music that fills at least one of the following criteria:
- It was recorded by a significant artist and the album or single is to be released in the next few months.
- It was placed in a movie soundtrack that is about to be broadcast on a major TV network in the next few months.
- It was used as a theme for a series that is about to be broadcast on a significant TV network– in the next few months.
- It is currently getting a lot of play on a commercial radio station or podcast, or it has been tracked by a reliable service as being downloaded (legally) many thousands of times– now.
Notice that all four criteria listed above are either happening currently or scheduled to happen in the near future. Both ASCAP and BMI have payout systems that tend to respect events that are either happening in the immediate present, or around the corner. If you had a hit five years ago and are just thinking about joining now or you’ve just been signed to a major label but have yet to record even your first album, don’t expect to have any real negotiating leverage. Also notice which additional situations are NOT on my list above — writing the music for:
- A TV commercial.
- A soundtrack for a movie that has only seen theatrical or direct-to-video distribution in the US.
- Independent films that show at festivals only.
- A hot regional artist’s indie release.
For reasons that are too lengthy to go into here (but are discussed in detail in two of my books, Confessions of a Record Producer and 100 Answers to 50 Questions on the Music Business, these circumstances tend to not track on either ASCAP’s or BMI’s systems. However, any of these additional situations could someday metamorphose into one of the top four criteria if, for example, the festival film gets bought by a major studio and they air it on TV, or the local indie acts gets signed and marketed by a major label.
In those situations, which PRO you join could make a radical difference in your income. Since joining a particular PRO is the only bargaining chip you have for carving out better terms, like foreign rights, bigger advances, etc, it is in your best interest to wait till you have established leverage before you join.
Which direction your career takes prior to signing will also affect this decision. Are you a songwriter or have you become a soundtrack composer or are you both?
Each PRO has an accounting system that favors different types of public performances. (See Part III for which pays more for what.)
Both ASCAP and BMI will tell you that they pay the same, because to admit otherwise would get them into a bit of trouble with the law. (Google: “consent decree ASCAP” for more on this.) But this “we pay the same” pitch is a very transparent lie to catch them in. If you ask a representative of ASCAP how much BMI pays, they will tell you that they don’t know. And vice versa. How can they tell you that they pay the same as the competing PRO if they don’t know how much each other pays?
In addition, There are many cases of songwriter teams who are on competing PROs who receive wildly varying royalty checks for the EXACT same song performed in the EXACT same way. It is clear that they do not pay the same. (in my books I give detailed analysis on how each of their formulas work.)
To my knowledge the only critical analysis of the difference between the Coke and Pepsi of PROs is in the latest edition of my first book, Confessions of a Record Producer. If this is still a burning question after the explanation above, then I urge you to read chapter 20 in that book. Unfortunately, You’ll not find this information about the differences in each of their payment formulas anywhere else.
Another great book on this is Music, Money and Success, by the Brabec twins.
In Part II of this series on the truth about PROs, we’ll dive into the “non-profit” stasis that PROs like ASCAP and BMI claim to have. What if this turned out to be one of the biggest lies in he music space? Sign up for the free mailing list above or follow me on Twitter to be kept in the loop. @mosesavalon.
Every word of this is true. I have been a member of BMI for ten years, and have had ten years of documented airplay. I have not seen a dime.
To add insult to injury, it is very difficult to get out of BMI. The contract I signed (back when I was very green) only provides a two week exit window every two years. If your registered letter is not received during that window, they own you for another two years.
All of the PROs have a 3 month window of termination notice. For BMI and SESAC that window is between 3 and 6 months before your renewal date, and for ASCAP it is between 6 and 9 months before your renewal date.
As much as they might suck, my indie band (of 20 years now) gets thousands of dollars each year from ASCAP for all the cable stations, radio stations, and so on that play our song. Now ASCAP is getting performance payments from YouTube and iTunes. They went retroactive to 2003, so I got some fat check two months in a row now.
I do the leg work of getting our songs played on cable tv shows, so we make nice money. Other indie bands don’t do that work and have nothing to receive. Bigger indie bands get a good amount of radio airplay, so they get some good money too.
ASCAP got us VERY affordable tour & instrument insurance that saved our ass a few times. And, my friends in other indie bands get affordable dental and health insurance through ASCAP.
Also, we get money each year for being an indie band, they give out special payments for that if you fill out the paperwork delineating what concerts, festivals, and halls you have played that year, what new songs you have registered at ASCAP and so on.
And, ASCAP has a ton of service they give their members that help them get legal advice, demos recorded and listened to, free courses, workshop where you might industry people (*not that I want to, I do well without a label getting in the middle), and lots more.
So, yeah, you are right, but once you have your songs being synced on cable tv show soundtracks and so on, it is WELL worth being with ASCAP.
AND< ASCAP PAYS WAY MORE THAN BMI. One band member went with BMI and he gets a fraction of what the rest of us get.
Sal,
Thank you for the balanced positive aspects. You are right, and let me be clear in saying, for thors visiting this blog for the first time, that I am NOT implying that either ASCAP or BMI are scams. Quite the contrary, without PROs the music business might not be a viable business at all. So, let us not confuse healthy citrisim and unpinning of a few competitive sales pitches with any form of anti-endorsement. These are vital companies to be sure. I just want everyone to make an educated choice, rather than one based on an assumption.
Great post, as always Moses! Thank you for explaining all this in a way that artists can understand. I, like you, get asked this one all the time too. Your insight is spot on!
Thank you again for yet another enlightening article. And thank you other bloggers for your examples!
You want my two cents (which is about all ASCAP ever paid me)?
Actually, they were okay at first. In the early 70s they gave me something like $100 a year for submitting a record of all the places I’d played my original material. But that soon dried up.
In 1975, I had the Song of the Year on the Dr. Demento Show. It was getting played on 200 radio stations and AFRTS every week. It was always in the Top 5, usually #1. But Demento was syndicated, and mostly broadcast on Sunday nights. That’s when ASCAP’s “monitors” were either turned off, asleep or busy knocking down drinks at the local bar. When I submitted several dozen Demento playlists and station lists to ASCAP, trying to get any kind of remuneration for all the airplay, I was told, “Sorry, but those would throw off our random survey.” In 35 years of airplay on Demento’s programs and stations from Hawaii to Japan to Europe, the song was “randomly surveyed” a grand total of three times. And not since 1976. Two of those plays were not on the Demento show.
In the early 80s I got into it with the ASCRAP Prez Hal David, over his proposal to charge a royalty fee on blank cassette tapes. He claimed people were taping off the radio, stealing food out of the mouths of ASCAP artists. Yeah, right. That was about the time McCartney received some well-publicized obscene amount of royalty money from ASCAP. I told David that I (like other indies) was lucky to have my tunes played on the air at all, and that if people didn’t tape them they might never hear my music again. I made a rather lengthy and strong argument, actually, against his tape fee. His one line response to me, as well-considered as you would expect from someone milking a cash cow, “Obviously, we have a difference of opinion.” And fuck you very much.
Concurrent with that very exchange, a local ASCAP agent had demanded high licensing fees from a local coffeehouse that presented folk concerts on the weekends. All the door went to the performers. The joint was told to either pay up or shut down. Since they couldn’t afford the fees on coffee and brownie sales, they stopped having live music. The ASCAP agent did the same to a small music bar down the street, forcing them to go silent as well. In other words, ASCAP closed down two rooms where ASCAP members, including me, were being hired to play.
In the 80s I discovered that my ASCAP membership allowed me to collect live performance royalties thru affiliated organizations in Europe. So, when I toured there I filed the forms. ASCAP held onto the money for two entire years before paying it out. Did I get interest on it? BUAHAHAHA!
It was a lovely day when I finally bailed on those goons. But they had one final insult to deliver. Long after I’d resigned my commission, I received an ASCAP royalty statement for $5.00…and a check for $0.00. I was informed the $5 had been applied to my dues. My what??? Oh, never mind.
The bottom line with the PROs has always been: If you’re successful already, they’re really really pleased to have your business. But if you’re not, they could give a flying f–k.
I’ll be the voice of the independent artist/label here (as usual) and relate that in my experience (mainly in the gospel/Christian and contemporary jazz genres respectively), we see decent pay for national single airplay through BMI. Of course New York and LA stations help, and XM/Sirius helps ALOT! And to do this you need serious record promotion help, but that’s another subject…
In talks with other artists and players here in the Nashville area, it seems BMI may pay a bit better in these specific genres. I have had people report ASCAP didn’t pay as well in these same genres.
Probably in the reporting, but who knows!
I would take exception with a few of the rules above, and know they are general. If you are an indie artist doing specific national radio promotion and you hate $500-1000 checks appearing quarterly in your mailbox, definitely don’t sign up.
EC
Oh, Eric, suppose you expand a bit for us on exactly what you mean by “specific national radio promotion.” because this sounds expensive and way more costly than $4000/year.
Independent radio promotion we use usually starts at $2000 or so, and goes to $3500 for a life of single.
Once the domain of only the record companies, the radio promoters split off into their own companies years ago. And as labels spend less, they are hungry for clients. Enter Indies.
These promoters call on reporting stations in the format you are trying to chart on (usually Billboard is the key, but not always depending on your format/genre).
Of course, you don’t always recoup those costs in royalties, especially if the single doesn’t take at stations. Just because you hire a promoter doesn’t mean stations will actually play it.
But one of our jazz artists saw almost 5 figures in royalties (BMI) from one well played jazz hit. I’m sure he spent only about $3k on promotion.
And yeah, since most of my clients are indies, they rarely even splurge for radio promo, but if they do and I write or publish their stuff, could be some extra money every quarter.
It’s all about multiple income streams at this point right…
PS. If you use radio info you get from your promoter you can use this to book with, and add to the bottom line. But this is grassroots/indie marketing stuff.
EC
(Caveat: Remember I’m operating exclusively in specific niche national radio genres like gospel (or CCM) and jazz (smooth/contemporary). I’ve never hired a secular AC/pop or CHR/rock radio promoter for national promotion, and would never want to!)
Moses, while I agree it’s extremely important to understand the differences between ASCAP & BMI (& SESAC for that matter) before choosing which PRO to join, there’s one concern I have about waiting to join one according to all your scenarios.
Granted, why bother until you have music professionally recorded. However, in order to place and pitch music for Film & especially TV today, music supervisors want the artists/songwriters to have these legal “ducks in a row” and by NOT having these matters creators will simply lose potential income because of clearance issues.
Yes this may be for their convenience, but they too are often working in limited time frames of 1 day or even hours, and they don’t want to risk being “burned” (as many have) by pitching uncleared music that may have potential legal problems down the road. We hear this from numerous music supervisors.
Music is a unique art where income streams are always inter-dependent between many kinds of organizations and people within the industry. I agree artists and creators must always be proactive in their own best interests based on this understanding…
An added thought on this subject…
I know a composer team where each is signed with a different PRO – one with BMI & the other with ASCAP. They CONSTANTLY find discrepancies between their statements, and because they work as a TEAM they take that knowledge back to their respective PROs and get the extra money they should because they are fully informed and having the ammunition in writing. This is a very successful and smart duo and they’ve learned the best way to be proactive in handling the business aspects of earning money from music IMHO.
Sounds like the thing to do would be to join both, using a pseudonym for at least one of them. (The “Nanker Phelge” option.) That way you’d always know if one or the other was shorting you. Of course, first you’d have to actually be getting airplay AND be monitored.
Interesting dialog, I definitely have some things to consider here – thanks to ya’ll for the comments. ~TH~
i have been a member of BMI since 1980.Is ASCAP better.I don’t know.I have about 100 songs out there and what I have noticed is that revenue is definitely down for someone who gets AirPlay but may not have a stone hit.
I register the songs and get paid if they get played.That simple
I am a songwriter with BMI. I have never had a song played on the radio. All of my music is licensed for TV shows and some films. I have consistently gotten checks every quarter from BMI for the past 4 years. I honestly feel like joining BMI was the best thing I could have done for my music career. I don’t perform on the road and I probably only put out about 6 songs a year, but I do get paid from BMI. I’m interested to see how much of a difference I will see when I sign up with ASCAP as a publisher. I always heard that it was best to sign up with one as a writer and the other as a publisher.
There is no mention of how music is monitored by these companies, but after reading some of the comments, I hope it’s covered in your book.
BMI uses BDS for radio tracking and ASCAP created Mediaguide specifically for tracking royalties, but they do much more now. Both are electronic, so there is no ‘downtime’ when no one is paying attention. Mediaguide allows artists to track their songs themselves, so if you feel like ASCAP isn’t paying out you can show them their own data. That’s a nice feature..comforting. BDS is part of the Nielsen/SoundScan/Billboard family, though, so it has its own perceived advantages.
MediaBASE is the only monitoring company that still uses human ears, so it’s by far the least accurate. It’s owned by ClearChannel so people still use it, but I don’t think it has much to do with royalties. Could be wrong.
No one is very forthcoming with all of this information, so I really appreciate these articles. More information on tracking and collection would be nice, so I’m going to buy the book!
Thanks!
Thanks for the comments Lady J. I loved your radio show.
The info about how the PROs do thier tracking is included in the expanded version of this piece in the boom confessions of a Record Prodceur, t had to be cut for this excerpt for space considerations.
In the new book, 100 Answers to 50 Questios, I also have a chapt on why tracking PRO data is so complex.
In talks with other artists and players here in the Nashville area, it seems BMI may pay a bit better in these specific genres. I have had people report ASCAP didn’t pay as well in these same genres.Thank you again for yet another enlightening article. And thank you other bloggers for your examples!
I love all the info here… I’m an American living in South Africa. Here the PRO is Samro. Should I join Samro since I live here, or should I join one of the American firms? Can you join the overseas company and join one of the American ones too? What advantages do you see if any, of me joining Samro verses say… ASCAP.
One of my secular songs is now on CDbaby.com and can be bought worldwide…they also market your songs to flim companies etc. One man mentioned the “Legal” problems of getting a deal on films if your not with a PRO, but if I join SAMRO will that also be a negitive for me, since I’m here in South Africa? I know the Net has made the world smaller but are there still issues?
I just don’t know what to do. Also how should I copyright my songs from here? Go to a lawyer, notary…Samro?
Next Month I’m releasing my 15 song org Gospel album I’ve made here in South Africa on the net, and I would like this advice too, because I don’t want any trouble if my album does well. I might put this album with indieheaven in the US as I’m still an unsigned artist.
Also….some say I can register my album here with Samro but I don’t have to join….and that might protect me , at least for copyright purposes etc.
I’m going to ask the book store here to order your book. Thanks for all the help… and God Bless…
Very Helpful info.
I’m glad that organizations exist that help ensure you get paid for your work.
That said, my venue will be going silent. We got our first ASCAP demand letter for $1700 which means BMI and SESAC will follow suit shortly.
ASCAP grossly exaggerated the size of our building and included unusable square footage like the kitchen, walk in coolers, storage closets, bathrooms to arrive at a “seat” capacity that is 225% greater than actual. $1750 for ASCAP may not sound like much but when the profit margin is 15% or less the actual cost is $12,000 in gross sales just for ASCAP. I haven’t even payed the band yet.
The cost of the band, additional wear and tear on the building, licensing fees, additional labor, additional electrical consumption ect virtually guarantees a net loss on the evening and no pay for my personal labor.
I am deciding in the next couple of days if I should pull the plug on live music. It would eliminate 104 gigs for local bands (roughly 52,000 dollars in incone to local bands) which in turn will eliminate 208 shifts for my employees (around 40,000 in wages and tips). It will reduce my electrical usage and reduce my maintenance costs.
As much as I would like to be the spot for local talent to cut their teeth it doesn’t appear to be a financially viable model anymore.
I will probably have to join the ranks of other bars in the area that don’t have live music. The local music scene is completely nonexistent here.
I wish you all the best.
Well, have you considered trying to negotiate? Everybody does.
Sounds like nothing’s changed since they ran the Silver Spoon and Country Inn out of the live music business 30 years ago. Those clubs tried negotiating, too, but it’s hard to do that — and impossible to be successful — with a loaded gun pressed up against your head.
$1750 – roughly the price of one beer per day for the right to perform live music? Doesn’t sound too bad. But if they got the size and seating capacity wrong you should definitely fight them on that.
Okay so, note to everyone on this forum: if you own a restaurant and feel that ASCAP and BMI is overcharging you let me know and I will negotiate with them for you. Yes, there will be a small fee for this but it’s a “cry once” fee. Meaning, one negotiation will last you years and years and save you money in the long run on licensing fees.
im in a signed indie band. i’ve been with ascap for over 10 years. have had many syncs to cable/network television and movies in the last 3. my 50/50 partner gets paid almost 4x as much as me being a member of bmi, it’s staggering to see how much it differs. ascaps response is “well some things just pay more than others..” unacceptable in my opinion….
i am now going through the process of switching to bmi which ascap makes extremely hard to do.
whoever stated above that ascap pays way more, is sorely mistaken…