If you own a business, you can get licensed with BMI, ASCAP, and SESAC to ensure you're paying royalties and legally playing music in your establishment. There are pros and cons to each of these entities, but there are also alternatives that allow you to stream music easily and cheaply.
What Are Performing Rights Organizations (PROs)?
A performing rights organization (PRO) helps music professionals manage the rights and licensing of their work, so they can get consistent income from radio stations, television commercials, or film or stage performances that use it. These payments are called performance royalties.
PROs collect performance royalties and distribute them to both songwriters and publishers. Any songwriter or publisher can sign up with a PRO and start collecting any royalties owed to them (minus the PRO fee).
PROs and your Business
To legally play music in your business, you have to compensate the musicians and publishers behind that music. However, establishing direct connections with individual artists can be challenging. This is where PROs act as the middle person between the music creators and your business. PROs facilitate the licensing process, ensuring that you can legally access a vast catalog of music while handling the necessary payments to the rightful artists and publishers, even if you don't have direct relationships with them.
Q: What Are Performing Rights Organizations?
A: Performing rights organizations (PROs) collect licensing fees and distribute the money to songwriters, performers, and publishers. PROs offer licenses to businesses and venues to collect those fees.
The 3 Major PROs
There are several small PROs, but the three major ones in the U.S. manage millions of songs by tens of thousands of recording artists.
These are the top three PROs you should know about:
- BMI: Broadcast Music, Inc. (BMI) is the largest PRO in America. They are a nonprofit organization with one of the most comprehensive available catalogs. They boast over 20.6 million musical works from over 1.3 million songwriters, composers, and publishers.
- ASCAP: ASCAP is the most established and longest-serving PRO, launching back in 1914. Additionally, it’s the second largest PRO in the U.S., working with a library of over 18 million works. This not-for-profit organization protects members’ copyrights for public performance, including on radio and television broadcasts, live performances, and other opportunities.
- SESAC: SESAC is one of the few for-profit PROs, unlike BMI and ASCAP. The company was founded in 1931, and the SESAC catalog has remained small, with 30,000 members and about 1 million songs.
BMI vs. ASCAP vs. SESAC
PROs have similar goals but maintain very different structures, pricing models, and rules. Artists can choose which PRO to work with, and these subtle contractual alterations can make one seem more enticing than another.
| BMI | ASCAP | SESAC | |
|---|---|---|---|
| Business Structure | Nonprofit organization | Member-owned nonprofit organization | For-profit organization |
| Membership Cost (for artists) |
Free for artists; $150 for publishers; $250 for companies | $50 for new artists with no annual dues; self-renewing membership | None |
| Music Catalog | 17 million songs | 10 million songs | 1 million songs |
| Number of Member Artists | 1.1 million musicians and composers | 735,000 member artists | 30,000 members |
| History | Founded in 1939 to protect new music like jazz, blues, and country | Original American PRO founded in 1914 alongside copyright laws | Founded in 1931 to protect new music and ensure artists make a living |
| Contract Length (for artists) | 2 years | 1 year | 3 years |
| Payout Time (for artists) |
5.5 months | 6.5 months | 90 days |
| Royalty Split (for artists) |
50/50 split between songwriters and publishers | 50/50 split between songwriters and publishers | 50/50 split between songwriters and publishers |
BMI
BMI was founded in 1939 to protect public and recorded performances of artists in new musical genres like jazz, blues, and country. BMI still proudly protects new music artists and styles to this day.
Songwriters can join BMI for free, whereas publishers must pay $150, and companies are charged $250. As a business owner, you can get a blanket license for the entire BMI catalog, giving you access to popular artists like Shakira, Taylor Swift, Dolly Parton, and Sam Cooke. You pay to access 17 million musical works in a catalog that grows all the time.
Although their focus is on the U.S. and North America, BMI works internationally, so their understanding of copyright issues around the globe can benefit licensees. They also focus on how music is used on new technologies, from phones and tablets to games and streaming.
| Pros | Cons |
|---|---|
| Nonprofit status means this organization is only interested in protecting members. | Relatively long contracts can trap artists into relationships they may not want. |
| One of the largest catalogs of all PROs. | Relatively infrequent payments can mean artists don’t get paid as often as they might like. |
| For artists: BMI is free for you to join. | Complex contracts for business owners means it’s hard to predict how much it might cost to play BMI music legally. |
ASCAP
More than 735,000 artists are ASCAP members. While the ASCAP catalog may be smaller than BMI’s, a wide range of music options is included (such as Stevie Wonder, Leonard Bernstein, Beyoncé, Katy Perry, Justin Timberlake, and Ariana Grande).
Unlike SESAC and BMI, ASCAP is owned by its members, who pay a one-time joining fee of $50 and no annual dues. ASCAP’s Board of Directors is made up of artists represented by the company, who are nominated every two years.
The organization collects more international and domestic royalties for its artists than other PROs.
| Pros | Cons |
|---|---|
| Catalog includes major players like Stevie Wonder and Katy Perry. | Relatively small catalog of songs and artists to choose from. |
| Some artists appreciate being part of a member-owned nonprofit. | Some artists don’t have time to participate in a member-owned nonprofit. |
| For artists: A one-time joining fee eliminates the need for annual dues. | A long wait time for payment means some artists may not get the money they need on time. |
SESAC
SESAC is smaller than the other PROs, so it can focus on serving members as individuals. Famous artists, including Bob Dylan, Adele, and Mumford & Sons, are part of SESAC. Membership is exclusive, as artists must be invited to join.
SESAC may charge businesses more for their catalog of songs than other PROs since their focus is collecting income and distributing it to their artists. That being said, this can be a benefit if you are an artist. The organization fights for your licensing rights, so you can make more money.
| Pros | Cons |
|---|---|
| Catalog includes major players like Adele and Mumford & Sons. | Relatively small catalog of songs and artists to choose from. |
| For artists: Relatively short payment window means frequent paychecks. | Higher fees to use the songs included within the catalog. |
| For artists: No joining fee or monthly dues. | For artists: You must be invited to join. |
Which Licenses Do You Need to Play Music in a Business?
Can you work with just one PRO as a business owner and play any song you want? Not exactly.
Playing music legally in your business means paying people for the artistic works they create. Songwriters and performers deserve a share, but so do their publishers. And these teams aren’t required to share a PRO. A song you want to play could be protected by more than one entity.
Also, a relationship with one PRO isn’t a blanket license to play anything you want at any point. Before the first note comes from your speakers, you must ensure that it’s included within the catalog. Skip this step, and you could be violating the law.
Typically, businesses form relationships with all PROs to ensure full protection. It’s a very expensive and time-consuming process.
BMI vs. ASCAP: Which Is Better?
BMI and ASCAP are the two largest PROs operating within the United States, and they represent an incredibly large catalog of music and musical artists. Either could be a good option (whether you’re a business hoping to play music or an artist hoping to get paid), but you should understand the differences.
For Musicians
You’re not required to get an invitation to join either BMI or ASCAP. But which should you choose? Examining the pros and cons may help.
Potential deciding factors include the following:
- Contract length: BMI contracts are twice as long as ASCAP’s contracts. If you’re hoping to test your relationship before you sign up for the long term, this may be important to you.
- Costs: ASCAP requires a $50 fee for artists, while BMI charges nothing. Neither company requires annual dues.
- Payment frequency: Both companies pay their artists about twice per year, so there aren’t major differences between them.
- Structure and setup: Both organizations are nonprofits, but ASCAP is member-owned. Some artists find this structure appealing.
For Businesses
If you’re hoping to play legal music within your store, business, hotel, or other public establishment, you could sign up with either BMI or ASCAP.
Potential deciding factors include the following:
- Catalog size: BMI’s catalog is much larger than ASCAP's, offering you many more pieces to choose from as you create your business playlist.
- Represented artists: If you have a specific song, artist, or genre in mind, it pays to contact the company about that representation before you sign a contract. Both organizations have relatively short contract periods, so a song you love could switch ownership at any point.
- Potential fees: Neither company offers blanket statements about how much their catalogs cost per month. Both require businesses to reach out, explain what they want, and where it will play. Only then can you get a price-point comparison.
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With three different plans available and various levels of business-focused features, Cloud Cover Music handles the specifics, so you can easily and legally stream music in your place of business for a reasonable cost. Try our business music service free today and see how we can amplify your business! Terms and conditions apply.
References
Understanding Performance Rights Organizations and Which One is Right for You. (February 2023). Lawyers for the Creative Arts.
