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The Biz: Did A Performance Rights Organization Do Anything For Us?
Posted on Friday, August 18 @ 07:05:18 MDT by roadrash
 MD NewsWhile every artist holds out some hope that they will make it big, there is a spectrum of ambition along which every artist falls. At one end there is the artist who creates just to create, for whom the financial benefit is outweighed by the aesthetic ideal. At the other end is the artist who views artistic creations as commodity.

The Virgins and ASCAP: Did A Performance Rights Organization Do Anything For Us?
by Brian Kopec-Farrell,

MusicDish Network Sponsor
In 1995 I moved back to my hometown of Milwaukee with a group of college friends to start a band. We called ourselves The Virgins. Over the next five years this name would prove to be somewhat prescient. We played hundreds of shows throughout the Midwest, recorded one six-song cassette and two CDs, and made a lot of naive assumptions.

One of these assumptions was that we needed to be members of a performance rights organization (PRO). After a lengthy debate over which organization to join, a debate focused primarily on which PRO counted our favorite songwriters as members, we settled on ASCAP (American Society of Composers, Authors, and Publishers). The logic of this decision was based on one belief: we were going to be big, or if not big, then at least as popular as Elvis Costello. Being big meant that eventually our music would be performed everywhere and we needed to have a system in place to collect all those royalties. We were wrong on two counts: we were not going to be huge and we didn't need to join a PRO.

I harbor no illusions about our efforts. We worked hard on our music. But by joining a PRO we made a mistake that a lot of young bands make. There is no reason for a young band or songwriter to rush into a PRO. Membership for a developing songwriter provides little, if any, benefit. It would be reasonable to think small artists would have the most need for a collective rights organization to help amplify their voice, but small artist empowerment is not something a PRO provides. The services a PRO offers do not help the development of the small artist.

While every artist holds out some hope that they will make it big, there is a spectrum of ambition along which every artist falls. At one end there is the artist who creates just to create, for whom the financial benefit is outweighed by the aesthetic ideal. At the other end is the artist who views artistic creations as commodity.

The Virgins fell closer to the aesthetic side of the spectrum, but not too far. While my own motivation for writing was rooted in the experience of collectively writing with a group of close friends, I was never above making money from our compositions. My position along the spectrum, like most artists, was not static, but it did fall closer to the aesthetic side. This side of the spectrum contains a large segment of artists whose endeavors do not warrant the need for PRO membership.

The Virgins assumed that ASCAP would collect royalties for any airplay our recorded songs were lucky enough to get. This proved not to be the case. A PRO provides what is known as a clearing function. They negotiate a blanket license with radio broadcasters. The fee for this license is based on adjusted gross receipts of the station, approximating 2%. In exchange for this fee, the radio broadcaster is granted a non-exclusive license to render an unlimited number of performances of one or more of any of the hundreds of thousands of songs in the PRO's catalog. These fees are collected and distributed as royalties by the PRO.

While this is definitely a benefit for the larger copyright holders in the PRO's fold, it really does little for a small regional songwriter. Because the PROs use statistical sampling when determining the amount of airplay, it is questionable whether a small, unsigned writer member will every see a royalty from a blanket license. No effort is made to determine exactly the actual number of times each selection is performed during the year.

Songwriter members who are not signed to a label, either a small affiliate or a major, are very unlikely to get any airplay and will not register even a tiny blip on the PRO airplay analysis. This is not to say that at some point in the career of a songwriter that these royalty payments may not become important, but for the small local songwriter the PRO collection of performance royalties through blanket licensing provides no real benefit.

The other form of royalty collection was one The Virgins didn't even know existed: general licensing. This is an annual fee paid by any licensee other than radio and television broadcasters, such as nightclubs, restaurants, sports arenas, and the like. The PRO in many cases, sends representatives to ³scout² the venue and see if any performing artist is covering any of the songs in its catalog. If they find that songs from the catalog are being performed, they contact the owner and demand a general license calculated on the basis of various business factors including venue capacity, live music frequency and yearly revenue. Again, these royalties are distributed on the basis of statistical calculation so it is rare that a small, local band will see any revenue from the general license.

Throughout the country there are examples of clubs that have chosen to stop hosting live music rather than pay a licensing fee to the PROs. These venues often choose one of two routes. They either cease hosting live performances altogether or choose to only host live music with an assurance that the performer is not registered with a PRO and performs no cover songs. Many club owners find the licensing fees to be too much of an economic hassle.

While this sentiment may or may not be an honest one (club owners are notorious for claiming that live music is always a loss leader despite the alcohol sales that usually accompany a live show) it doesn't really matter in the face of the result. If the actions of the PROs are contributing to the closing of a regular venue for small, local acts, these groups and the community in which they operate are actually being hurt by their PRO affiliation.

To be clear, PROs are not a terrible idea. There are performance royalties to be collected and they collect them. Additionally, The Virgins did benefit from one ASCAP program designed to help unsigned bands that perform and record independently and make a legitimate effort throughout the year. By listing our efforts, performances and studio time, and sending them to ASCAP we were able to collect $250 one year. It was divided five ways and we were happy. Money was most often going out. It was rare to see some actually coming in.

But exposure was what we really wanted and was more valuable to us than anything we ever received from our PRO affiliation. At shows we could sell product, expand our fan base, and book more shows where we always received a cut of the door. Ultimately, we had no real need for ASCAP. Unfortunately, this was a fact we did not learn until later. Overall, our affiliation with ASCAP did not benefit The Virgins in any way, and young bands should consider that there is a different path to take.

Joining a PRO should not be a foregone conclusion of a local or even regional band. The smaller artist should consider that there is no real benefit in the affiliation. The PROs will always be there and if a band does start to have some airplay on major stations, then membership could be considered. Performance royalties can be a very large source of income for artists who have reached a large audience, but until that audience materializes the benefit of PRO membership is negligible.

The Virgins would have been better off not joining a PRO, but we were naive when it came to the music industry. We probably received about $300 in total from our ASCAP affiliation. We broke up in 2000 and went our separate ways, somewhat amicably. Yes, one of the reasons we disbanded was because of the name. There are still some of The Virgins' original CDs floating around, but be forewarned: the songs may still be registered with ASCAP so be careful where you play it.

Provided by the MusicDish Network. Copyright © MusicDish LLC 2006 - Republished with Permission

 

 
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