ASCAP vs. BMI vs. SESAC

Do you ever wonder how musicians earn money from their music? They are paid in royalties, calculated and disseminated via a Performing Right Organization (PRO).

If you’re a musician and fail to sign up for PROs like ASCAP, BMI, and SESAC, you may not receive all the royalties to which you are entitled.

If you own a business, you can get licensed with BMI, ASCAP, and SESAC to ensure that you're paying loyalties and legally playing music in your business. There are pros and cons to each of these entities, but there are also alternatives that allow you to stream music easily and cheaply.

Choosing between PROs can be challenging. You may have questions like, ‘BMI or ASCAP?’, ‘What is ASCAP and BMI?’, and, ‘What’s best, ASCAP, BMI or SESAC, for independent artists?’

Don’t worry; we’ll answer these questions shortly. But first, let’s outline some essential background information on PROs:

What Is a Performing Rights Organization like BMI, ASCAP, or SESAC? What Do PROs Do?

Musicians, songwriters, composers, and other music performers or managers are professionals, and they are paid for their work.

A performing rights organization (PRO) helps music business 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 a performance royalty. 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 collect royalties for ‘public performances,’ which includes songs that get:

  • Played on the radio
  • Used in a film or video game
  • Played live
  • Streamed in a public space
  • Used in a commercial or T.V. show

There are thousands of artists and musicians living in the USA, so how are all these royalties collected and distributed?

The answer is: using cue sheets.

A cue sheet is the name of a document that outlines any songs used, when they were used, how much of the songs were used, and who used them. All of this information helps credit the artist. Any organization that uses your song (i.e., a restaurant, music venue, film company) must complete a cue sheet and send it directly to the PRO.

In the North American region, there are four major PROs, three of which work largely in the United States market. They are Broadcast Music, Inc. (BMI); American Society of Composers, Authors, and Publishers (ASCAP); and Society of European Stage Authors and Composers.

If you are a music professional looking for a PRO to license your work, which of these should you choose? Each has their own benefits and detriments. The right choice will be based on your needs as a professional, working artist.

Other types of professionals interact with PROs too. If you run a restaurant or retail location, you must pay specific licensing fees to play music in your store. Similarly, theaters, offices, and other businesses that want to play music need to pay licensing fees.

PROs work with these organizations on the best prices for licensing, based on business need and size. The exact catalogue offered by a certain PRO may be more appealing to you, as a business owner, compared to another catalogue.

men shaking hands after licensing agreement deal

The Difference Between ASCAP and BMI

PROs help businesses like restaurants, theaters, retailers, and gyms access popular music to set a specific ambiance for their customers. Many medium-sized and larger businesses pay all three of the biggest PROs (BMI, ASCAP, and SESAC), but you may decide you only need one for certain scenarios. We'll provide an overview of the three biggest PROs in this article, so you can determine if one catalogue is enough for your business or if you need access to all three options. Before we compare the first two (ASCAP vs. BMI), let’s review organizational specifics on each.

  • BMI: BMI stands for Broadcast Music Inc and is the largest PROs in America. They are a nonprofit organization with one of the most comprehensive available catalogues. They boast more than 17 million musical works from over 1.1 million songwriters, composers, and publishers.

    The company was founded in 1939 to protect the 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. BMI represents famous artists such as Taylor Swift, Lady Gaga, Kendrick Lamar, and Sam Smith.

    As a licensing organization with a massive music catalogue, BMI works hard to bridge the gap between companies that need music, and the musicians who produce popular or appealing songs. BMI has services geared toward a range of businesses. 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.

    As a business owner, you can get a blanket license for the entire BMI catalogue, giving you access to popular artists like Shakira, Dolly Parton, and Sam Cooke. You pay once to access 17 million musical works.
  • ASCAP: One of the original PROs, American Society of Composers, Authors, and Publishers is widely known as 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 10 million works. They launched as a not-for-profit organization to protect members’ copyrights for public performance, including on radio and television broadcasts, live performances, and other opportunities. Like other PROs, ASCAP collects membership fees from businesses that want access to their large catalogue and distributes this money back to member artists as royalties.

    Since its inception, ASCAP has protected musicians and composers in a wide range of genres. Some popular artists and musicians ASCAP looks after are Stevie Wonder, Leonard Bernstein, and Beyoncé, Katy Perry, Justin Timberlake and Ariana Grande.

    Unlike SESAC and BMI, ASCAP is owned by its members. ASCAP’s Board of Directors is made up of artists represented by the company, who are nominated every two years. The organization collects more money for royalties for their artists, and they collect more international royalties than the other PROs.

    If you are a musician, writer, or composer, being a member of ASCAP makes a lot of sense. Best of all, there is a one-time joining fee of $50 for new musicians, but no annual dues after that.

    There are over 735,000 artists who are members of ASCAP. While the ASCAP catalogue may be smaller than BMI’s offerings, this is still a wide range of music options, including many of the most famous performers in modern music. Your membership will self-renew if you do not terminate it, but the organization offers a lot of information on how payments are distributed and your payment is calculated.

ASCAP vs. BMI

If you’re a songwriter, you can save the $50 ASCAP membership fee by joining BMI for free. However, if you’re a publisher or company, it may be cheaper to join ASCAP. Aside from these price discrepancies, both companies are relatively similar.

It’s up to you to research and weigh ASCAP vs. BMI pros and cons before you decide what’s best for you as a songwriter, publisher, or business.

SESAC: History & Benefits

SESAC is the only PRO that operates for-profit, rather than a nonprofit basis like BMI and ASCAP. The company was founded in 1931, and the SESAC catalogue has remained small, with 30,000 members and about 1 million songs. This means that SESAC can focus on their exclusive catalogue, with famous artists including Bob Dylan, Adele, and Mumford & Sons. It also means that their profits aren’t siphoned back into the company as much as they would be with BMI and ASCAP. This may indicate that they spend less money improving their services and the music industry for their members. Additionally, SESAC is invitation only, so it isn’t easy to join. This organization goes only by its acronym since it stopped using the full name in 1940.

Again, they may charge you, as a business, more for their catalogue than other PROs since their focus is collecting income and distributing it to their artists. That being said if you are an artist, this can be a benefit. The organization fights for your licensing rights so you can make more money.

Although SESAC is difficult to join, it offers several benefits, including:

  • An option for artists to get monthly radio royalty payments (as opposed to the standard quarterly royalty payments)
  • 10% discount at Bertleemusic.com
  • 10% discount at Sprint
  • Discounts for airport parking
  • Discounted Nero Multimedia Suite 10
  • Discounted rate on CMA’s Sterling persons membership
  • 15% discount on the first year at Songtrust
  • 20% discount on the legacy learning system
  • 33% discount to American Songwriter magazine
  • 90-day free Musician Atlas online account.

The biggest reason to sign up with ASCAP, BMI, or SESAC is to access the royalties you deserve. Any time someone streams or performs your song in a public place, you could be eligible for payment. Any time your music is played on the radio, it becomes money in the bank.

But, this only happens if you, as an artist, publisher, or composer, work with a PRO.

Cloud Cover Music Is Your Music Copyright Solution Without Stress

Although each PRO is a unique, separate business, they often overlap in catalogue. Many of the most famous artists work with two or three PROs at a time, so their music can be more widely distributed. This may make it seem like you, as a business owner, can become a member of just one and still get the specific music you want, which is not entirely true.

Modern pop music and some other genres work with multiple songwriters. While there may be one performer or one band performing a specific song, there could be as many as 10 people behind the scenes, writing lyrics and music notes. The composers and writers of a song may not work with the same PRO. Some writers may work with one, others may work with a second, and the performers may work with a third, or all three of them.

None of the performing rights organizations collaborate for crossover on their catalogues. If someone has a license with them and only them, you need to pay the PRO to use that song. This means it is important to pay for access to all three of these major PROs. This covers your bases and ensures you are not violating any copyright laws if you play music for your business.

However, this can get pricey for you as a business owner, especially if you are a small or new business. What you thought would be a simple subscription to one performing rights organization quickly escalates to three subscriptions. There’s a better solution.

To make this as easy as possible for business owners, Cloud Cover Music works with several major PROs while also providing your technological access to a large catalogue. Cloud Cover Music works like Spotify or Pandora, providing a large catalogue that you can stream with our specific service.

We specifically focus on your company’s needs for music licensing, whether you need background music to create ambiance for your store or foreground music for a commercial you filmed. By collecting everything in one place, Cloud Cover Music is convenient for you, ensuring you are within copyright laws without stressing too much over these details.

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!

SOURCES