Why You Should Think Twice Before Joining ASCAP, BMI or SESAC Part I

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It’s one of the top 10 questions I’m asked: ASCAP, BMI or SESAC? Which one should I Join? Here’s a rock ‘n’ roll answer: How about none of them. At least not right away.

All of these competing Performing Rights Organizations (PROs) spend a great deal of their members’ money selling “belonging” as if there is an immediate benefit to membership, like collecting money that they have been holding for you.  But experience indicates that you’d be better off waiting to sign with any of them. Wonder why? Here’s the truth about PRO’s in this three part series taken from Moses Avalon’s latest book, 100 Answers to 50 Questions on the Music Business.

Moses Avalon

ASCAP (American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc.) often called the “Coke and Pepsi” of performing rights organizations, will both tell you it is irrational not to join one of their organizations. They collect the bulk of all the performance royalties in the US, and will assure you that you cannot get your share unless you are a member.

ASCAP, BMI or SESAC?

Orig Photo By: Stuart Pilbrow

In their pitch they will make it sound as if your music is already out there earning money and the PRO is just holding it for you, like a bank, waiting for your application. But the truth is that unless you write a hit song, or a soundtrack for a TV show like The Simpsons you are unlikely to see any significant royalties, even if you are a member.

That said, the real question is not whether to join, or which one to join, but rather when is the right time to join either ASCAP or BMI (SESAC is by invitation and so the pros and cons outlined here are not really applicable.)

Many people who are new to the industry think they should sign with one or the other as soon as they can. The lavish events that both ASCAP and BMI host make one think that joining means there is an immediate chance to collect money. This is not true. Even if you are a member, you only get paid if:

1. There is money to collect for your musical works and, more importantly…

2. That you meet their requirements to receive money after you join.

Yes, signing a deal with a PRO, like so many other deals in the music business, is a guarantee of nothing.

In fact, it’s entirely possible that after you commit to a PRO, your song(s) could be earning money for them, but the PRO is paying you nothing in return. (See Part III about the pooling system for more on that.) Sounds crazy right? It is sad, but true. So, unless one of the PRO’s offers you a financial incentive to join, you should wait until you have written music that fills at least one of the following criteria:

  • It was recorded by a significant artist and the album or single is to be released in the next few months.
  • It was placed in a movie soundtrack that is about to be broadcast on a major TV network in the next few months.
  • It was used as a theme for a series that is about to be broadcast on a significant TV network– in the next few months.
  • It is currently getting a lot of play on a commercial radio station or podcast, or it has been tracked by a reliable service as being downloaded (legally) many thousands of times– now.

Notice that all four criteria listed above are either happening currently or scheduled to happen in the near future. Both ASCAP and BMI have payout systems that tend to respect events that are either happening in the immediate present, or around the corner. If you had a hit five years ago and are just thinking about joining now or you’ve just been signed to a major label but have yet to record even your first album, don’t expect to have any real negotiating leverage. Also notice which additional situations are NOT on my list above — writing the music for:

  • A TV commercial.
  • A soundtrack for a movie that has only seen theatrical or direct-to-video distribution in the US.
  • Independent films that show at festivals only.
  • A hot regional artist’s indie release.

For reasons that are too lengthy to go into here (but are discussed in detail in two of my books, Confessions of a Record Producer and 100 Answers to 50 Questions on the Music Business, these circumstances tend to not track on either ASCAP’s or BMI’s systems. However, any of these additional situations could someday metamorphose into one of the top four criteria if, for example, the festival film gets bought by a major studio and they air it on TV, or the local indie acts gets signed and marketed by a major label.

In those situations, which PRO you join could make a radical difference in your income. Since joining a particular PRO is the only bargaining chip you have for carving out better terms, like foreign rights, bigger advances, etc, it is in your best interest to wait till you have established leverage before you join.

Which direction your career takes prior to signing will also affect this decision. Are you a songwriter or have you become a soundtrack composer or are you both?

Each PRO has an accounting system that favors different types of public performances. (See Part III for which pays more for what.)

Both ASCAP and BMI will tell you that they pay the same, because to admit otherwise would get them into a bit of trouble with the law. (Google: “consent decree ASCAP” for more on this.) But this “we pay the same” pitch is a very transparent lie to catch them in. If you ask a representative of ASCAP how much BMI pays, they will tell you that they don’t know. And vice versa. How can they tell you that they pay the same as the competing PRO if they don’t know how much each other pays?

In addition, There are many cases of songwriter teams who are on competing PROs who receive wildly varying royalty checks for the EXACT same song performed in the EXACT same way. It is clear that they do not pay the same. (in my books I give detailed analysis on how each of their formulas work.)

To my knowledge the only critical analysis of the difference between the Coke and Pepsi of PROs is in the latest edition of my first book, Confessions of a Record Producer. If this is still a burning question after the explanation above, then I urge you to read chapter 20 in that book. Unfortunately, You’ll not find this information about the differences in each of their payment formulas anywhere else.

Another great book on this is Music, Money and Success, by the Brabec twins.

In Part II of this series on the truth about PROs, we’ll dive into the “non-profit” stasis that PROs like ASCAP and BMI claim to have.  What if this turned out to be one of the biggest lies in he music space?  Sign up for the free mailing list above or follow me on Twitter to be kept in the loop.  @mosesavalon.

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109 Responses to “Why You Should Think Twice Before Joining ASCAP, BMI or SESAC Part I”

  1. J Dill says:

    I have 2 irons in the fire on this. As a songwriter I wasn’t getting what my partner was each quarter. I called SESEAC and was told and I also have it in a email, was told I should write better songs if i wanted more revenue. The Revenue IS for our same songs. I also run a non-commercial radio station. I was told by BMI that the revenues we send go to the top 3% on the charts at years end. IF that includes Pop and top 40 Billboard, we don’t play them, so is this how my royalties are figured too? Years ago we did playlistings 2 weeks every year. I don’t mind paying those artists we play but why does some artists get royalties from us that we don’t play. SESEAC is a for profit business while ASCAP and BMI are not for profit. But try and get a payout ledger from them and they will refuse, which is against the law concerning tax exempt not for profits.

    • Moses Avalon says:

      None of the PROS are “non-profit.” You are mistaken there. ASCAP/BMI have a model that is like a non-profit, but that is not even close to the same as a tax exempt charity.

      ASCAP and BMI will do check matching between songwriting team, because of the “Consent Decree”that they operate off of– by law. But SESEAC is not a party to that factor. So they are not obligated to match. However, unless it was a special case involving a large settlement/Advance or a huge discrepancy I have never heard of an instance where they refused to match– until now.

  2. Bigband says:

    For my Bigband website ASCAP contacted me that they wanted a royalty for my mp3 files. About $1,700! The song samples were of my band performing short samples (less tan 1 minute)of hudreds of songs. I tried to negotiate, they insisted and so I eliminated all my mp3′s now my clients cannot sample my music and my band is performing far fewer gigs. I do not wish this treatment on anyone.

    • Moses Avalon says:

      You should have contacted me immediately. For a co-pay of $250 we would have spoken to them and convinced them to back off.

    • Kat says:

      Your making money off other people’s music you should pay, or learn how to make your own and stop whining. Even if your not “rolling in the dough ” ,you can’t complain about living in a house that some one else built after they decide to tell you that you need to pay rent or get out.

  3. Bigband says:

    Moses,
    Very sincere thanks for your very prompt response. The band last year performed 2 gigs. I really am not “rolling in the dough”. Again thanks, Dan
    PS did you know ASCAP is going after Verizon for ring tones?

  4. Jerome Sherman says:

    I had a producer I worked with place my music in a movie a few years ago.. I received no compensation for it. I actually didn’t know until I was watching Showtime, and heard my song playing in the film. Is it possible thT I can collect royalties from that?

  5. Pontea says:

    Thank you, Moses, for this article. I really needed something like this because I was clueless about PRO’s and whether or not to join one, even though people are constantly telling me to do so.
    -Pontea

    • Moses Avalon says:

      You’re welcome, however, I’m not saying you should not join one or both, just that you should have an understanding as to their differences and make an informed choice.

  6. Martin says:

    Hey there,

    by hazard I found this interesting blog and got some questions concerning BMI.
    I´m (actually) just a hobby musician for electronic music and come from Germany. I just made a remix for an US artist and he likes that track very much and would like to publish it. Finally he recommended to set up my own account at BMI so that the remix can be published on his label and that both of us can finally earn some money. He told me that time is perfect, because his album will be released next month and he addtionally wanted to spread some remixes too.

    As I´m really not that experienced, but already took a deep look on the BMI homepage, I´d be happy to get some answers to erase my last uncertainties:
    1, When I set up my account there, do I have to pay any quarterly or annual fee as a member/songwriter? Or is it free? Just found in their FAQs that if you want to copyright a song, it´s connected with costs…
    2, How will the payment process be? Will the label/publisher keep in contact with BMI regarding the number of clicks/plays, and based on this I would get the royalty?
    3, How big is the royalty, BMI pays? From the latest comments it did not look so satifsying…
    4, Is it enough to start up online or do I need to sign a real contract and if yes, is it easy to withdraw from the contract?

    Would be really happy to get some input here.
    Thanks a lot in advance!
    Martin

  7. Psyke P says:

    I’m registered with BMI and I have a song that’s taking off .. It’s gettin a lot of spins on the radio. What do I need to do to receive royalties?

  8. kindra says:

    Thanks for the article..hope its not to late….I just joined ascap 4 days ago…I have not title register my songs yet…new artist with no leverage yet..should I wait before I give them my songs or should I rejoin later under different name?

  9. P. Confused says:

    Hi. Useful info, thanks. I have a question.

    Some time ago some American musicians asked me permission to record a tune of mine, I gladly accepted. A few months ago they told me something about a movie-documentary being interested in that track, through the IMDb, or something like that. Supposedly they “might” use my song on that American movie, which will be released later this year, but it’s not yet confirmed that they will use it.

    The guys that recorded my tune are telling me to join a PRO as soon as possible if I want to get paid in case they do include the song in the movie.

    Now my question: Can I wait until it is confirmed that the song will be in that movie, and then join a PRO only if it does happen? Or should I be joining a PRO right now, before it’s confirmed?

    I don’t really feel like joing one, to be honest, especially because I’m from Spain and our PRO has a bad reputation, but of course I’m not a saint, if my song is going to be on cinema or TV I do want to get something out of it.

    What would you do in my position? Wait or not? Thanks a lot!

  10. Craig says:

    Hreat article you have written. I am considering very strongly on forming a publishing company, and I know I have to register the name. Is there any thing I need to know before doing this, what I mean between ASCAP and BMI, which is better for the beginner.

    Thank you very much.

  11. Canadian eh says:

    I am just about to sign up with SOCAN and they give no option, must choose which one is going to represent me as I am filling in, there is no option to not choose one. However, with limited to no knowledge of how these guys work, or why I am going to sign up with one versus the other, how do I decide? I am being asked to provide my own creative pieces for use in YouTube vids and some of my creations have piqued the interest of an emerging game app developer who is interested in using either the entire sequence or alternatively some slices of that piece I composed, for their new game app. HELP!

  12. Johnny Byng says:

    Is SOCAN different? I joined SOCAN back a few years ago and didn’t think much of it at the time. I played a talent showcase which did a cd and I started getting royalties from a local station playing my song. They played it a few times every couple months and it made me chuckle when I would get my couple bucks. I came upon this post cuz I was thinking of joining Coke or Pepsi. Maybe not now….

  13. Casey says:

    As a small business owner, I have to say I am very disappointed in the music industry for supporting these companies. I have a small diner and I can’t even play the radio for my customers who are eating.

    We used to have local bands come in and play, we would pay them and then they would get to promote their music and books other gigs. Now we don’t play any music at all. We forbid any music playing as we are scared of getting sued by one of these companies. They used to call us and write us letters saying we could be in violation and could be sued for tens of thousands of dollars. Now I feel like it’s 1943 in Germany. Sad, and Im afraid it’s going to get worse.

    As a small business owner, and I can’t see paying the $1500 a year to one of these companies, actually would be more if I pay all three of them. So we decided to not play any music. I’ve heard of other small business owners doing the same. America just isn’t what it used to be….Everyone is out to get someone.

    Thing I don’t understand is. If I decide to play the music that I bought. Im promoting that artist, Im not selling his music….It’s sort of backwards. Artist should be happy we are playing there music, and newcomers should pay business owners for promoting them….If we put the hat on the other head that is.

  14. MF says:

    “Artist should be happy we are playing there [sic] music…”

    The eternal cry of those that don’t understand how it all works. Artists can’t live off the “opportunity alone” – and by playing their music, you are (subjectively) improving the ambiance and marketability of YOUR business. That’s worthy of cold hard cash, not just some pat on the back. In fact, unless you’re actually offering to sell the merchandise of these musicians from whom your business benefits, it’s likely that your “promotion” is worthless – customer’s aren’t sitting around asking “who’s song is that?” and “where can i get it?”

    Bad enough these companies don’t REALLY pay the artists what they are worth… on top of it we have to constantly deal with people that don’t understand what fair use is. We’re supposed to do it just for the love of the art, right? Never mind if you can’t afford groceries.

    • Tim says:

      I couldn’t disagree more-If we aren’t out here listening then the “artist” doesn’t get to buy groceries either. It used to be that “artists” were going all over the country to independent radio stations and slipping the dj 10 bucks to play their record. Now that there are very very few independent radio stations in the country and most all of the stations are owned by a handful of companies this has all turned around.
      Reading the comments on this site it seems to me that (once again) it’s not the “artist” that is getting paid-it’s everyone else that hasn’t got a drop of talent that’s getting the money.
      To charge restaurant owners to play music is stupid. Now, the “artist” doesn’t get played in this persons restaurant,so, guess what? They aren’t getting paid either.Something tells me that even without Lady Gaga howling away in the background that this restaurant owners food still tastes good without her.

      • Moses Avalon says:

        The fee being discussed in this thread goes towards paying the songwriters, which typically are not the same as the performing artists. Are you saying the performing artist should get paid but not the songwriter?

  15. jjdoe says:

    In the music business, everyone makes money except the musician. These outfits are just racketeers, shaking down businesses. And true, artists should be paid, on some sliding scale, for others to use their work. But judging from the infinitesimal amount they get paid by spotify and such, I’m guessing the artists get hundredth’s of a penny on the dollar, for what the PRO’s are earning.
    And isn’t it nice, like the radio guy mentioned, that when a venue buys into the system, the big artists will see the most – whether they use their music or not!

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