A Look at Performance Royalties
Today I thought it would be interesting to detail a little bit about performance royalties. Performance royalties are made possible by certain organizations such as BMI, SESAC, ASCAP, and Sound Exchange. These organizations track usage and pay artists. Once you register a song with any of the above organizations, it will then be available for someone to purchase and use. For example bars and restaurants have to pay to play music in their facilities. I found this to be very interesting. I always assumed they just had a satellite radio subscription or something. So in reality, any business that plays music has to pay the artist in order to use that music. Except the payment does not go to the artist directly. Rather the business will pay one of the above listed organizations. Generally this is in the form of a blanket license whereby the business is allowed to play all of the songs the organization holds. Since it is a flat fee being paid, the organization such as ASCAP has to calculate how much money to pay each artist. In order to do this they measure various means such as radio stations in order to determine what artists get what percentage of the revenue they are bringing in from subscriptions. If you are interested in learning more about any of these specific organizations, head to
www.bmi.com or
Though it may seem like a complicated system, it actually makes paying royalties to artists a feasible operation. If there was not a group of organizations to monitor music usage and facilitate a payment system, musicians would lose a lot of valuable royalty income.




