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Performing Rights Society BMI vs. ASCCAP

Performing Rights Society BMI vs. ASCCAP

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Published by MusicBizSovereign
A compare and contrast paper on ASCAP and BMI, and who is better for SONGWRITERS, not publishers.
A compare and contrast paper on ASCAP and BMI, and who is better for SONGWRITERS, not publishers.

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Published by: MusicBizSovereign on Apr 29, 2010
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09/14/2010

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Costello 1
Megan A. CostelloProfessor GaideAdv. Music PublishingMarch 20, 2010BMI vs. ASCAP: A Writer's Point of View"If music did not pay, it would be given up. Whether it pays or not, the purpose of employing it is profit and that is enough," said Justice Oliver Wendell Holms.Performance Rights Organizations are set up to pay royalty fees, for publishers andwriters; also, to license those who would like to use: BMI, ASCAP, or even SESACmember's material, for whatever it might be they need licensing for: performance,synchronization, or new media. BMI and SESAC may be both performance rightsorganizations and have the same concept, however, they both have very differentsystem and ideas: on how royalties are distributed, licensing, their members/affiliates,and much more.February 13, 1914 at the Hotel Claridge in New York City, ASCAP was formed bymusic revolutionaries who were outraged by the issue of people and businesses thatused music, but didn't pay for it. For example, "…Victor Herbert brought a lawsuitagainst Shanley's Restaurant for refusing to pay royalties. The fight took over two yearsand went to the Supreme Court. ASACP prevailed."(www.ascap.com/about/history/1900s.html) ASCAP had signed the first reciprocalagreement in 1919 with the Performing Rights Organization of Great Britain. Today,ASCAP has multiple reciprocal agreements all over the world.Victor Herbert founder of ASCAP started ASCAP as a clearing house for public
 
Costello 2
performance rights and royalties. An unincorporated membership organization ownedby its over 300,000 writers and publisher members, ASCAP controls the largest catalogand market share of public performance rights of all the United States performancerights societies. ASCAP licenses rights primarily via “blanket license,” whereby alicensee wishing to publicly perform ASCAP-controlled music pays a single fee equaling just fewer than two percent of the licensee’s gross receipts for the year, subject to aminimum fee. In exchange, the licensee obtains the right to perform any composition inASCAP’s repertoire for one year. After subtracting its overhead expenses, ASCAPapportions fifty percent of the collected money to member publishers and fifty percent tomember writers, with individual allocations within each group based on surveys detailinghow often particular members’ music was used.In the twenties, when radio was invented it became the most significant sourcesof income. “Some 11,000 local commercial radio stations and 3,400 non-commercialradio broadcasters are ASCAP licensees,” (www.ascap.com/about/history/1920s.html).BMI was founded on October 1939, in Chicago as a non-profit organization;however, they were formed by the broadcasters. Because license fees were about toexpire---and they were tired of the expensive fee the broadcasters had to pay---thebroadcasters decided to create their own organization called, Broadcast MusicIncorporated (BMI). In February 1940, BMI started to function in New York City as fullperforming rights agency. Therefore, when ASCAP raised licensing fees to thebroadcasters---by almost a hundred percent---radio broadcasters quickly shifted over toBMI. Furthermore, BMI started an “open door policy” for writers and publishers;therefore, those artists who signed under BMI now had an opportunity to be played
 
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more often, and more widely.
In ASCAP, you are considered a member. ASCAP members elect who should beon the board of directors; whereas, in BMI it is owned by the broadcasters. The reasonwhy the licenses from ASCAP are more expensive then those from BMI are becauseASCAP performance licenses were based on the advertisement sales the radio stationswould get to create a profit. BMI would charge broadcasters what it would cost justbased on how many times they play a song. This brings us to royalty disbursement.ASCAP sends out a total of eight checks a year to an actively played artist
(four distributions cover performances in the United States and four cover foreignperformances).
This is because they already have a set fee and they will pay you on aquarterly basis. All they need to do is collect the information on how many times thesong is being played, and who owns the rights to the song. “More than $0.88 of eachdollar we collect goes right back to our members in royalties.
 
That is the highestdistribution ratio in the U.S.,”
(www.ascap.com/about/ascapadvantages).For domestic royalty checks ASCAP follows this system. A writer will receive, aquarterly domestic distribution check for the second quarter of 2009 (April, May, June)performances on January 2010. Then another quarterly domestic distribution for thethird quarter of 2009 (July, August, September) performances will be disbursed in April2010. The following quarterly domestic distribution for the fourth quarter of 2009(October, November, December) performances will be received in July 2010. Finally,the first quarter of 2010 quarterly domestic distribution (January, February, and March)performances will be collected by the writer in October 2010.

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