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by Mike Bielenberg
As large stock media companies more tightly define what
makes a piece of music truly "royalty-free", many musicians are choosing
to forego membership in performing rights organizations (known as PROs) such
as ASCAP (American Society of Composers and Publishers), BMI (Broadcast Music
Incorporated), or SESAC (Society of European Stage Authors and Composers),
among other international organizations.
PROs were originally organized in the early twentieth
century to protect the rights of musicians whose compositions were being
performed in public for commercial gain (i.e., radio, television, sporting
events, business meetings, etc.). Once these artists united and began charging
fees for such usage, a new type of royalty stream was created, known as the "performance royalty". To composers,
this type of royalty was separate from the "mechanical" royalties they earned
through record sales and printed sheet music sales.
As an example of how significant performance royalties have become, in 2010
alone ASCAP collected $935 million for usage of music written by its members.
But in the wake of declining music production costs due to software innovations
and the crowdsourcing of talent over the Internet, commercial music libraries
are now receiving submissions from music composers who have chosen not to join
these performing rights organizations, particularly composers from countries
outside of the G-7 such as Russia, the Czech Republic and Nigeria. For these
musicians, the number of bureaucratic steps through which a royalty payment
must pass to finally make its way to them, make the potential for meaningful
revenues from PROs extremely unlikely.
"I'm not an active member of any PRO in the first place because supposedly
with royalty-free music the customer doesn't need to pay any mechanical royalty
fees, or extras," says Manual Ochoa, a musician based in Argentina."But the
fact is that in my country it is very difficult to collect foreign performance
royalties," added Ochoa.
In many ways Ochoa's free-agent status affords him opportunities and advantages
which are not available to members of PROs.
For example, the upload agreement of iStockPhoto, a leading microstock photo
website that began selling music in 2007, states:
"...if you are a member of ASCAP you may well be entitled
to directly license your work but you are not permitted to upload it to iStock."
And PROs define a public performance as "any music played outside a normal
circle of friends and family". This means that music created by PRO members
can be much costlier to use in restaurants and hotels than music created by
non-PRO members like Ochoa, thus providing Ochoa and other non-PRO musicians
the opportunity to offer their music for a lower price.
Gary Eaton, a former Muzak executive says, "There were
times at Muzak when we worked with rights holders who had the option to waive
PRO fees....this strategy proved helpful in marrying quality content with
client objectives [where cost was an issue]."
While most PROs have a clause that allows its members
to work directly with TV stations, radio stations and restaurants (known
as "direct performance licenses"),
members are required, at least in BMI's case, to "notify BMI about the direct
performance in writing within 10 days of when you issue the license or within
three months of the performance, whichever comes first." This requirement can
create a prohibitive amount of red tape for writers trying to market their
music through multiple brokers, many of them online, thus creating an advantage
for non-PRO musicians.
One way that musicians with PRO memberships have chosen
to compete with non-PRO musicians is a practice known as "re-titling". Re-titling is when a musician
allows multiple PRO publishers the claim "exclusive" rights to their latest
song even though the only thing that has changed about the song from one publisher
to another is the song's title. ASCAP and BMI's databases aren't sophisticated
enough to see this (yet). Therefore, re-titling has become a commonplace method
for musicians to have their songs exploited by as many publishers as possible.
Imagine if three different book retailers each exclusively released a new Stephen
King book with a unique cover and title. Then imagine if you ordered all three
books only to realize after reading Chapter 1 that they're all the same exact
book. That is the essence of re-titling.
However, the increased practice of digital fingerprinting,
or "watermarking",
is likely to render the practice of re-titling impractical. When advanced detection
technologies currently being deployed by ASCAP and BMI discover a public performance
for which a royalty can be collected, the software doesn't know under which
title that license was obtained. To the software, it's all one song. This presents
complications for the musician who has registered the same song 12 different
ways with 12 different publishers. For the musician who is already a member
of a PRO and working with multiple production music libraries, re-titling tracks
is bound to create confusion as detection technologies evolve and become more
pervasive.
To understand re-titling, one must first understand the role played by a PRO
publisher. When a PRO pays out a royalty for any given usage of a song, it
actually cuts two checks: one to the registered composer(s) of that song and
one of equal value to the registered publisher of that song. By definition,
a publisher is an entity whose function is to exploit a piece of music. This
model harkens back to the early 20th century when composers composed and publishers
cut deals. The roles were very separate and defined. While those roles may
intertwine more often in the 21st century, as far ASCAP's and BMI's accounting
divisions are concerned.. they do not. They are separate entities.
Musician Gus Caveda has been writing and producing music
in all kinds of different genres for over 25 years. He currently lives in
Miami, Florida where he produces music for TV and film projects. According
to Caveda, "With so much growing
competition in this field of the music industry, it's no longer feasible to
put all your eggs in one basket..[but]..I'm just not seeing it [the option
for writers to keep their own publishing] being offered anymore. The standard
deal today is 100% of writer's share to songwriter, 100% publisher's share
to library.....re-titling has become a practical business solution to a problem
that in essence the songwriters themselves have created [by wanting multiple
publishers]."
Because PROs do not require fees or any professional experience to become
a member, there is no particular cache associated with membership. To most
musicians, the earnings are what matter most.
While there can be benefits of PRO membership, such as the opportunity for
additional performance royalties, by avoiding PROs musician can generally offer
lower prices and greater flexibility on licensing terms for their music, which
can lead to an increase in the volume of their sales.
For the musician currently earning no income from PROs who wishes to gain
market share by offering music that is royalty-free music in the truest sense
possible, avoiding membership in the PROs may be the most effective way to
get there
About the Author:
Mike Bielenberg has composed and produced music for IBM, Microsoft, The Cartoon
Network as well as several major commercial music libraries. He is a professional
composer/keyboardist in the Atlanta area and co-founder of MusicRevolution.com ,
a production music marketplace with over 17,000 tracks online where media producers,
video producers, filmmakers, game developers, businesses and other music buyers
can license high-quality, affordable royalty-free music from an online community
of musicians- mbielenberg@musicrevolution.com
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