The Music Industry and Royalties
Music is something that is heard nearly everywhere you are. You could be standing in an elevator, driving in your car, shopping at your favorite store or even be frequenting your favorite nightclub or hot spot. Or maybe, annoyingly enough, you’re on hold waiting for someone on the phone. No matter where you are, the odds are good that some kind of music is playing. What you may not know is that for everyplace you hear this music, they are paying the owners of the music through something called royalties.
Royalties are a way for music artists, composers and songwriters to earn a percentage of money for the reproduction, printing and live performance of copyrighted works. One such company that aids in this is called BMI. “As a performing rights organization, BMI issues licenses to various users of music, including television and radio stations and networks, news media, including the Internet and mobile technologies such as ringtones and ringbacks; satellite audio services like XM and Sirius; nightclubs, discos, hotels, bars, restaurants and other venues; digital jukeboxes; and live concerts” [bmi.com]. This is one way for the use of copyrighted works to be monitored as BMI tracks the businesses to which they have issued licenses. The businesses then pay the royalties to the artist, writer, composer or lyricist.
In addition to BMI, there is another membership association named ASCAP; The American Society of Composers Authors and Publishers, created in 1914 that is very similar to BMI. “ASCAP licenses the right to perform songs and musical works created and owned by songwriters, composers, lyricists and music publishers who are ASCAP members and members of foreign performing rights organizations who are represented by ASCAP in the United States”(ASCAP). BMI and ASCAP both require membership from the artists that they represent. It is apparent that someone was thinking about this a long time ago. Many businesses end up paying license fees to both companies. There are many licenses to consider, but for this purpose I will just mention a few of the main ones to help give an understanding of the way this works.
A Mechanical license is when the music publisher gives permission for the works to be reproduced on cassette, compact disc, etc, to be sold to the public. “The mechanical royalty is paid to the recording artist, songwriter, and publisher based on the number of recordings sold” (Obringer.). This means that the more albums that are sold, the more money is made in royalties. For example, the first Led Zeppelin album is still available for retail, which means that to this day, the surviving members will continue to profit from royalties for as long as the album sells. Simply put, they have been receiving royalties for this album since 1969.
The next license I will mention is Performance Rights. This license allows music to be played live, on radio or television. The artist receives royalties each time his or her work is played. This is noticeable in many television shows. If an artist plays works owned by another artist or publisher, royalties are paid. This also applies to clubs with live music. In the case of live music, most clubs will pay a flat fee since there is no way to really track what songs are being played and when. Ready to take lessons yet? I would be. The thought of making money continually for something that I had done once sounds pretty enticing.
One other license that I think merits mentioning, is Print Rights. “This is a royalty paid to songwriters and publishers based on sales of printed sheet music” (Obringer.). Wow, all you have to do is write a song, sell it and reap the benefits.
There was quite a bit about this subject that I had not thought of before. Some of it I had known but some I had not. I guess I wouldn’t have thought that the music I was listening to when I was on hold was making money for so many people. Of course, I don’t mind I guess. A world without the music we listen to would be a pretty boring place. Time to practice.
(Orbringer, L.) [http://entertainment.howstuffworks.com/music-royalties4.htm]
BMI [bmi.com/gl/entry/533611]
ASCAP [http://ascap.com/licensing/about.html]
