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Megan A. Costello

Professor Gaide

Adv. Music Publishing

March 20, 2010

BMI vs. ASCAP: A Writer's Point of View

"If music did not pay, it would be given up. Whether it pays or not, the purpose of

employing it is profit and that is enough," said Justice Oliver Wendell Holms.

Performance Rights Organizations are set up to pay royalty fees, for publishers and

writers; also, to license those who would like to use: BMI, ASCAP, or even SESAC

member's material, for whatever it might be they need licensing for: performance,

synchronization, or new media. BMI and SESAC may be both performance rights

organizations and have the same concept, however, they both have very different

system and ideas: on how royalties are distributed, licensing, their members/affiliates,

and much more.

February 13, 1914 at the Hotel Claridge in New York City, ASCAP was formed by

music revolutionaries who were outraged by the issue of people and businesses that

used music, but didn't pay for it. For example, "…Victor Herbert brought a lawsuit

against Shanley's Restaurant for refusing to pay royalties. The fight took over two years

and went to the Supreme Court. ASACP prevailed."

(www.ascap.com/about/history/1900s.html) ASCAP had signed the first reciprocal

agreement in 1919 with the Performing Rights Organization of Great Britain. Today,

ASCAP has multiple reciprocal agreements all over the world.

Victor Herbert founder of ASCAP started ASCAP as a clearing house for public
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performance rights and royalties. An unincorporated membership organization owned

by its over 300,000 writers and publisher members, ASCAP controls the largest catalog

and market share of public performance rights of all the United States performance

rights societies. ASCAP licenses rights primarily via “blanket license,” whereby a

licensee wishing to publicly perform ASCAP-controlled music pays a single fee equaling

just fewer than two percent of the licensee’s gross receipts for the year, subject to a

minimum fee. In exchange, the licensee obtains the right to perform any composition in

ASCAP’s repertoire for one year. After subtracting its overhead expenses, ASCAP

apportions fifty percent of the collected money to member publishers and fifty percent to

member writers, with individual allocations within each group based on surveys detailing

how often particular members’ music was used.

In the twenties, when radio was invented it became the most significant sources

of income. “Some 11,000 local commercial radio stations and 3,400 non-commercial

radio broadcasters are ASCAP licensees,” (www.ascap.com/about/history/1920s.html).

BMI was founded on October 1939, in Chicago as a non-profit organization;

however, they were formed by the broadcasters. Because license fees were about to

expire---and they were tired of the expensive fee the broadcasters had to pay---the

broadcasters decided to create their own organization called, Broadcast Music

Incorporated (BMI). In February 1940, BMI started to function in New York City as full

performing rights agency. Therefore, when ASCAP raised licensing fees to the

broadcasters---by almost a hundred percent---radio broadcasters quickly shifted over to

BMI. Furthermore, BMI started an “open door policy” for writers and publishers;

therefore, those artists who signed under BMI now had an opportunity to be played
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more often, and more widely.

In ASCAP, you are considered a member. ASCAP members elect who should be

on the board of directors; whereas, in BMI it is owned by the broadcasters. The reason

why the licenses from ASCAP are more expensive then those from BMI are because

ASCAP performance licenses were based on the advertisement sales the radio stations

would get to create a profit. BMI would charge broadcasters what it would cost just

based on how many times they play a song. This brings us to royalty disbursement.

ASCAP sends out a total of eight checks a year to an actively played artist (four

distributions cover performances in the United States and four cover foreign

performances). This is because they already have a set fee and they will pay you on a

quarterly basis. All they need to do is collect the information on how many times the

song is being played, and who owns the rights to the song. “More than $0.88 of each

dollar we collect goes right back to our members in royalties. That is the highest

distribution ratio in the U.S.,” (www.ascap.com/about/ascapadvantages).

For domestic royalty checks ASCAP follows this system. A writer will receive, a

quarterly domestic distribution check for the second quarter of 2009 (April, May, June)

performances on January 2010. Then another quarterly domestic distribution for the

third quarter of 2009 (July, August, September) performances will be disbursed in April

2010. The following quarterly domestic distribution for the fourth quarter of 2009

(October, November, December) performances will be received in July 2010. Finally,

the first quarter of 2010 quarterly domestic distribution (January, February, and March)

performances will be collected by the writer in October 2010.

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BMI will distribute 902 million dollars for the year 2009. The society also

calculates its royalty payments based on surveying methods; however, BMI asserts that

it conducts more sampling than ASCAP, giving members more opportunity to have

music uses counted and paid.

On the issues of licensing ASCAP is said to be the top in “securing rights,”

for the ASCAP members by licensing more music users and “negotiating the best

license fees. Also, has been a leader in licensing websites and new media. ” BMI

licenses primarily via “blanket license,” for which it charges approximately 1.6% of

annual gross receipts.

ASCAP is completely cutting-edge when it comes to technology---claiming to be

the first U.S. performing rights organization to disburse performance royalties on the

internet. ASCAP has developed many revolutionary technological creations that has

said to set international standards for identification methods, for music, such as

MediaGuide. MediaGuide is the most comprehensive and accurate performance

tracking system---using advanced "fingerprinting" technology, MediaGuide has helped

composers---who have no lyrics to their musical compositions---track their musical

works, and be distributed the correct royalty fees. In the digital world ASCAP has

developed strategic alliances with leading technology companies to focus on being the

best in copyright protection ever.

Acknowledged as the leader international copyright, BMI understands that

today’s music marketplace is truly global. BMI is also recognized as the leader in

developing state of the art international royalty accounting and collection systems. BMI
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was the primary creator for digital tools. FastTrack is a system that assures rapid and

accurate accounting for foreign royalties. Because of close inner workings between BMI

and creators’ organizations in Austria, Belgium, Canada, France, Germany, Italy, the

Netherlands, Spain, Switzerland and the U.K. brought FastTrack, the world’s largest

technical alliance. FastTrack represents over 80% of the world’s music. When music is

played overseas---FastTrack logs those performances into the system.

ASCAP and BMI both help new musicians; Support for the future generations of

musical creators seems to be a very special focus for the performing rights agencies---

they both offer a wide variety of: songwriter workshops, showcase programs,

scholarships, grants and awards to help writers in the early stages of their careers.

These showcases include are considered major industry gatherings which spotlight

developing acts for invited audiences of: record company executives, music publishers

and artist managers.

BMI is also experimenting with podcasts; BMI’s See It Hear FirstTM podcast is a

monthly radio-format showcasing the latest BMI songwriters. BMI publicly stated on

their website that the podcast not only gets sent directly to thousands of industry

professionals, but is also heard around the world by people in nearly 100 countries. All

of the See It Hear First podcast series are available for downloading at

bmi.com/podcast, and on iTunes as part of Apple’s free podcast directory at

bmi.com/itunes. The podcast are known to feature songwriters/artists in monthly shows

ranging from: pop, rock to country, Latin, and much more. Furthermore, several of the

featured artists have been signed to major-label recording companies.

They both create awareness---ASCAP and BMI both offer the industries most
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respected insurance coverage for musical instruments and equipment from MusicPro. In

this economy we are lucky if we have health insurance, and performing rights agencies

are both two of the major factors why musicians have such a great opportunity.

MusicPro is able to offer all sorts of economical rates on: tour insurance, equipment,

instruments, even health and life insurance.

Because ASCAP members are “members” and not affiliates ASCAP members

have a voice. ASCAP is the only performing rights organization to hold an annual

membership meeting giving members the opportunity to learn about how ASCAP works,

and what they are working on from the president and staff. Members are able to voice

any: comments, questions, or concerns. Many ASCAP members participate in the

affairs of the organization by serving on multiple committees, such as: the Symphony

and Concert Committee, Latin Music Council, Commercial, Promotional, Announcement

(CPA) Advisory Committee; the Board of Review, and many others.

What makes ASCAP very unique compared to---not only BMI, but all

performance rights agencies---is ASCAP is the only U.S. performing rights organization

to offer a Member Card with a full-range of benefits and discounts created to make the

life of the working music professional a little easier, such as: easy access to exclusive

web tools, travel needs, software, insurance (health/equipment/touring/dental), online

education, financial needs, retail, associations, and a discount subscription program (all

major music periodicals and guides).

BMI is number one in the industry's most important awards and honors

presentations. Its roster of songwriters and composers is unparallel. Having such an

outrageous range of elite musicians including the industry legends to the best of today’s
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music hit makers. BMI songwriters’ and composers’ success is unequaled in the

industry, as evidenced by their dominance of the industry’s most prestigious awards and

honors presentations over the years. Here is a quick glance at the roster of BMI: John

Lennon, Chuck Berry, Dave Brubeck, Willie Nelson, The Eagles, Thelonious Monk,

Carlos Santana, The Beach Boys, The Neville Brothers, The Who, Aretha Franklin,

Waylon Jennings, Charles Ives, John Kander & Fred Ebb, Leadbelly, John Williams,

The Bee Gees, B.B. King, Antonio Carlos Jobim, and – via its affiliation with the British

performing rights organization PRS – David Bowie, Sir Elton John and Eric Clapton. The

more current artist would be: Kanye West, the Black Eyed Peas, Maroon 5, John

Adams, Juanes, Mariah Carey, Keith Urban, Lil Jon, Mike Post, Juan Luis Guerra, John

Legend, Tim McGraw, Conor Oberst, Keane, Don Omar, Thomas Newman, Snow

Patrol, Snuffy Walden, William Bolcom, Ivy Queen, Snoop Dogg and many more of the

music industries elite names.

ASCAP roster would include: John Mayer, Quincy Jones, Diane Warren, Bill

Withers, Ludacris, Beyonce, Jay-Z, Yo Yo Ma, Madonna, Outkast, Wynton Marsalis,

Howard Shore, Lenny Kravitz, Kenny Chesney, Missy Elliot, Usher, Marc Shaiman, The

Mars Volta, Black Eyed Peas, Kings of Leon, Jason Mraz and many others.

As for minors who become involved in ASCAP, or BMI---the process is the same

in both performance rights organizations---the minor has to mail in a paper form with a

parent or guardians signature on it.

In order to make a long story short, ASCAP and BMI are different in a few ways:

who they are owned by, who they are operated by, and the disbursement of royalty

checks. They are the same because they do try to promote their unsigned artist through
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numerous events and showcases, they both stress and utilize the new digital world we

all need to be aware about, and they are both eager to be the best at what they do.

However, the bottom line is, "If music did not pay, it would be given up. Whether it pays

or not, the purpose of employing it is profit and that is enough," Justice Oliver Wendell

Holms summed it all up in about two sentences. We need performance rights agencies,

and you need to belong to one if you are a writer, or publisher, so choose carefully it is a

big decision.
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Works Cited

BMI, "BMI 50th Anniversary History Book, The Explosion of American Music:

1940-1990," http://www.bmi.com/reading/archives/historyo1.html.

International Directory of Company Histories, Vol. 23. St. James Press, 1998.

Sanjek, Russell, and David Sanjek, American Popular Music Business in the

20th Century, New York: Oxford University Press, 1991.

http://www.fundinguniverse.com/company-histories/Broadcast-Music-Inc-

Company-History.html

www.ascap.com

www.bmi.com