Also in this issue:

PROs: US vs. Them

As the music business struggles to find some terra firma in a mercurial digital age, many industry activists and ideologues in the US are looking overseas for solutions to collecting & dispensing domestic copyright & royalty payments. At issue are the millions of dollars in foreign performance royalties that go uncollected every year.

Once again, the issue is fair compensation, but who are the beneficiaries and who is collecting fees on their behalf? And who is following the money?

Figuring out the conduits of royalty cash flow is a harrowing task, a chore that is usually relegated to lawyers and managers in the name of expediency and mental health. Yet, the fact remains that knowledge is power, and if the money is yours, you should know how to direct the flow to your pocket.

In the digital age, music is the canary in the gold mine and artists & other copyright holders stand to lose control of their intellectual property.

Know Thy PRO
Unearthed from beneath mountains of legal jargon, here are three indubitable truths about American royalty compensation for public performances of sound recordings:

1) In the United States, ASCAP, BMI and SESAC are responsible for collecting royalties for songwriters, composers and publishers whenever a sound recording of a musical composition is performed publicly, be it on TV, radio, at a sporting event, or in a film.

2) Those funds are labeled “performance royalties,” and they stem from the “performance right” for the underlying musical composition. This is completely separate from the “mechanical right,” which grants the reproduction and distribution of a musical composition under the qualifying regulations of a mechanical license.

3) The “performance right” for terrestrial radio and TV does not extend to the performers, session musicians or copyright owners of a sound recording.

And now, with digital watermarks that can track sound bytes & charge accordingly, the inevitable money grab rages.

With the signing of the Digital Performance in Sound Recording Act (DPRA) of 1995, the PRO SoundExchange was established to collect royalties for the performers, recording artists, and copyright owners of sound recordings whenever those recordings are transmitted digitally, or by satellite; a legislation that required webcasters, satellite radio stations, and cable subscriber channels to pay royalties to the performers and copyright holders for the first time in history. Learn More in the April 07 edition.

Yet, presently, no legislation exists in the US granting a full performance right to performers and copyright holders for terrestrial radio performances.

The Issue:
At least 75 foreign countries, including most of the European Union, do grant a full, comprehensive performance right for sound recordings. And, while foreign terrestrial radio broadcasters have licenses that require royalties to flow to songwriters/composers, publishers, performers, and copyright holders, there is no reciprocal right here in the United States. But this is old news…

The History:
The lack of a full performance right for sound recordings in the US is a direct result of an ancient claim made by terrestrial broadcasters that radio serves as a free promotional tool for artists to boost record sales.

However, as terrestrial radio continues to broadcast increasingly hit-driven programming, and record sales continue to plummet, the argument has lost much of its post-DPRA relevance, and the fact remains that American money is being left in foreign bank accounts.

Remember: while the issue of a full performance right may be the impetus, achieving equitable artist compensation for all parties involved is the primary objective.

The Lowdown
So, do foreign PROs do a better job looking after their members than US organizations? One industry insider that I turned to for advice likened the process to the exploration of a black hole.

Another simply said, “good luck.”

Some of the players were willing to go on the record:

“Foreign PROs do a much better job accounting for and collecting royalties,” says Michelle Shocked, a Singer/Songwriter/Activist who has at one time been affiliated with PRS (UK), and ASCAP/BMI in the states.

“The US PROs act like it’s a sieve or a net, or something, you know, like ‘you just can’t catch them all!’ And I think it’s just because things are so different over there. For so long, PRS had to deal only with the BBC.”

Says artist, producer and 2007 Independent Music Award Winner in the Social Action category, Piet Shaw: “I believe that the ‘famous’ PROs of the named countries like ASCAP, BMI, GEMA, SOCAN, et al, are absolutely trustworthy, so there’s no use in being picky.”

However, according to Shaw, there is one notable difference between US & Foreign PROs: “In most European countries the PROs hardly ever take anyone to court for any kind of copyright infringements as they, for example, do in the US. You have to take care of who is stealing your ideas…you report that to your PRO.”

One issue that irks many US artists is the fact that until foreign affiliates actually transfer the money to their US affiliates, ASCAP, BMI & SESAC have no idea that monies were even owed .

According to Mark Northam, editor and publisher of Royalty Week newsletter and the International Music & Rights Organization Directory, the problem is a matter of unity:

“In Europe, most of the countries have a single society to collect performing and mechanical rights for artists, and in most cases, if there is not one society, then the performing and mechanical organizations are connected at the hip.”

Northam is correct in the cases of SACEM-SDRM in France, JASRAC in Japan, GEMA in Germany, and the MCPS-PRS mechanical/performance alliance in the UK; all are PROs that are either aligned with, or part of a local mechanical rights society

There are advantages to affiliating with foreign societies. For example, ever since PRS (a performance royalty collective in the UK) and MCPS (the sister mechanical rights society) joined forces in 1997, artist polls have continually ranked MCPS-PRS one of the efficient “combined rights” collectives in the world. PRS even offers a “Live Concert Service” that dispenses royalties for live performance in UK venues.

GEMA offers a similar live performance royalty for their members in Germany.

IMRO, a non-profit collective in Ireland, for example, distributes foreign royalty payments on a monthly basis, and charges its’ members nothing for the endeavor. IMRO also keeps records of all reported performances up to 3 years preceding, including “unidentified performances.”

And, unlike most other PROs, IMRO allows its members to review the records.

Find out more about IMRO here.

Here, it should be known that American artists registered with ASCAP, BMI and SESAC are entitled to collect royalties for their foreign live performances through reciprocal agreements with foreign PROs, but most artists, managers & labels are not even aware that they can collect royalty payments for their foreign live performances.

According to Big Hassle Management’s Dawn Barger, who helps to guide the careers of The Decemberists, Clogs, and The National, “I’m not even sure that many (artists) even understand what the US PROs do.”

Say What?
How easy is it for an artist or manager to check for foreign royalties? Let’s go right to the source…

Follow the “international” link, on ASCAP’s website, and you will find a page that states:

“There are societies similar to ASCAP around the world, and we cooperate with them to ensure that our members receive royalties from performances of their works abroad. ASCAP has reciprocal agreements with foreign societies representing virtually every country that has laws protecting copyright. We license the works of their members in the U.S., and they license the work of our members in their territories.”

However, the ASCAP site make no mention of the divergence of practices and policies between ASCAP and their foreign affiliates, let alone a royalty for foreign live performances.

If you follow the ”foreign royalties” link on BMI’s site, you will also find that BMI has reciprocal agreements with PROs abroad. But you’ll also discover this attention-grabbing admission:

“When a royalty payment from a foreign PRO is designated for a specific BMI songwriter, composer or publisher, BMI pays that affiliate directly if BMI's records confirm entitlement to that payment. There are, however, instances where, instead of an affiliate's name, only a song title, film title or TV show name is provided by the foreign PRO in conjunction with a lump sum royalty payment to BMI. In those instances, we must do more extensive research to determine the entitled parties and their percentage splits and make an allocation in accordance with the data contained in BMI's records. Sometimes, this causes a minor delay in distributing the royalties.”

Why don’t US PROs make it easier for their members to register with foreign agencies? Mark Northam believes “They don’t want to lose money.”

So What?
Yes, American artists can affiliate with PROs oversees, and yes, it does happen. But, according to the majority of artists, managers, PRO representatives and activists interviewed for this piece, the endeavor will only be beneficial if the artist in question a) regularly releases material in the foreign PRO’s designated territory, and b) if that artist tours regularly in said territory.

According to Piet Shaw, “if it’s definite that you’re going to have a regular release, the process is easy as 1-2-3. You find out the PROs’ postal or online address and send them an e-mail or letter with your request. They send you back a ready-made form which you fill out and send back to them. With GEMA you have to pay about $50 as an entry fee. This is one time only, and valid for the whole durance of your membership.”

Adds Northam: Unless you have a very large catalogue, then it might not be all that beneficial. It might not be worth the hassle of dealing with different languages, eligibility fees, etc. But the thing to remember here is that you can carve up the world and have yourself represented as you like it. Many people will choose a foreign society and say, “represent me for the rest of the world.”

According to one American performing rights representative, the majority of cases in which American artists seek representation overseas occur when American artists release music exclusively abroad; in which case direct affiliation eliminates the American PRO “middleman.”

In any case, any artist seeking direct affiliation abroad should consult a delegate from the PRO in question to discuss the minutae of foreign membership.

Bottom Line:
Know your business, know your rights and watch where your money flows. It may not make you rich, but it is yours nonetheless. And just in case you need to be told, Michelle Shocked offers this bit of advice: “Music is a lousy career. If you’re looking for money, I advise investment banking.”

Joe Master is a journalist/singer/songwriter from South Jersey, where the air is expedient and the traffic is clean. He writes the weekly AfterDark music column for The Islander newspaper (www.jerseyshorenow.com), and performs regularly in the power duo Face For Radio (www.myspace.com/faceforradiotunes) on Long Beach Island. After a lifetime of being picked last on playgrounds, in relationships, and by academia, Joe is happy to join the MRG team. Mr. Master can be reached at joe@musiciansatlas.com, or you can message him at www.myspace.com/joemaster.