The Cheat Sheet: Copyright Broadcast Royalties

cheat-sheet-logo2by Flip Michaels

If I could come up with just one hit...just one of those one hit wonders...then, I could retire by age forty. Really. Remember "Pop Muzik" by M? Or how about "99 Luft Balloons" by Nena? Well, after researching part three of our three-part series covering Copyright Procedures, Licensing, and Broadcast Royalties, I discovered just how much of an earning potential "one hit wonders" really have.

Part Three: BROADCAST ROYALTIES

Broadcast and performance royalties are the second highest source of income to most publishers and writers, except in pop, rock, and other related genres where they can bring in twice as much, making it numero uno.

Both forms of royalties are collected for each publisher by organizations such as ASCAP (American Society of Com-posers, Authors and Publishers), BMI (Broadcast Music, Inc.), or SESAC (Society of European Stage Authors and Composers), whichever performing-rights society that publisher joins.

Now although broadcast and performance are among small rights in compositions (BIG BREATH! Rights for when a royalty rate or payment is specified either by law or by one of the national agencies or societies representing composers and publishers), the payment rates are not "generally" fixed by law. Think about accounting for each of the various types of broadcast and public performances and which performances happen when? Imagine the complexity in billing each of our 11,000 or so radio stations (in the United States), plus each club, disco, and jukebox owner for every song that is played for the public. Obviously, the accounting costs should easily outweigh all the fees and royalties collected.

So, as Professor Wayne Wadhams of the Berklee College of Music puts it, "it falls to each performing-rights society to come up with some manageable way of billing broadcasters and clubs for their overall usage of music in a period of time and dividing this up among publishers and writers whose songs are played." And that's exactly what they did!

Our Medium: RADIO

Once a year, each of our stations negotiates and signs a separate blanket broadcast license with ASCAP, BMI, and SESAC. And according to our station's wattage, broadcast band, recent Arbitron ratings, and music format, each license states the amount that the station will pay to have airplay rights to all songs by all the publishers and writers that the society represents.

For many all-music stations, the license fee is computed as a percentage of the station's gross revenues.

Who Gets What?

How does each society divide the money up? No, collecting weekly music charts would be too expensive. So instead, the societies look at a portion of what some stations broadcast, then assume this sample will apply "fairly accurately" to all stations. ASCAP, for instance, will pay a separate company to tape-record over 60,000 hours per year of programming on randomly selected stations and count the performances of each song. On the other side of the wall...BMI samples -- by collecting intermittent charts and playlists from random stations, then noting the songs at each position, and applying what it calls rotation multipliers, and developing a rough total number of airplays for each song on all stations.

Exact? NOT! Blanket license fees themselves are based on approximations, but overall, both societies claim that their methods have approximately ninety-seven percent accuracy on the amounts paid to the publishers and writers of each song.

Now, after applying either formulas, billing the stations, and deducting overhead and accounting costs, both societies distribute between eighty and eighty-five percent of all the money they've collected. However, due to the inexactness of the calculations, quite often there is extra money left after each of the distributions. In this event, ASCAP sends out a special bonus distribution. BMI, in contrast, raises its payment rates for the following accounting period. With the Harry Fox Agency, you can request an advance if your composition is in current broadcast. The society calculates the minimum amount your song will earn (based on Billboard and/or chart positions), and then gives you the bulk in advance. Now that's nice of them.

SUMMARY:

So, what have you learned? In the past three columns, I've learned what not to do with other artists' work, what to do with mine, and how I can retire at forty. Remember, it's your Cheat Sheet. Use it...or you'll be saying, "hey, that never happened before?" And that's what the farmer said when his cow died.

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