Foreign Performance Income
by Ben McLane, Esq.
If a songwriter composes a hit song, it is
quite possible that the song will receive
airplay in foreign countries. If so, there will
be what is called "performance money" due
that songwriter from the foreign countries
playing the song. This article will explain
the process of distributing "foreign
performance" monies to the songwriter.
Any serious songwriter should first become a
member of one of the United States
performance rights societies: BMI, ASCAP
or SESAC ("societies"). The songwriter will
enter into a contract with the society chosen,
giving that society the right to license the
public performance of that songwriter's
songs. The societies have arrangements with
the parties (radio, television, concert venues,
restaurants, etc.) who want to use the songs
in the societies' respective catalogs. For a
licensing fee, the societies will grant to that
user what is called a "blanket license," which
means that the user can play any song, by
any songwriter or publisher affiliated with
that society, any number of times.
Publishing companies enter into a similar
agreement with the societies.
The money earned by a songwriter from the
societies (the "performance royalty") is
proportionate to the volume of airplay of the
songwriter's songs. Performance royalties
are based on complicated formulas.
Basically, however, the societies monitor
radio and television airplay to determine how
often a song is heard and by how many
people. The larger the audience and the
more times a song is played, the more the
income. Since it is impossible to cover all
media outlets, the societies rely on estimates
based upon samples. After deducting
operating expenses, the societies divide the
fees up and pay it to their affiliated writers
and publishers. Societies pay quarterly.
All major foreign countries also have a
performance rights society. All of the U.S.
societies have "reciprocal agreements" with
the major performance rights societies
throughout the world. Based upon their own
individual rules and procedures, these foreign
societies log and (after deducting an
operating fee) pay the U.S. societies for
performances in the foreign territories of the
works that are in the U.S. societies' catalog.
The U.S. societies (after deducting their own
processing fee to analyze the foreign
performance monies) in turn pay the
songwriter the foreign performance money
earned. If there is a separate publisher of
the song, societies pay 50% to the writer and
50% to the publisher.
Now, and in the future, there is great
potential for money to be earned outside the
U.S. Hence, songwriters must position
themselves to be able to collect all that is
owed them. Joining a performance rights
society is the key.
Copyright 1998, Ben McLane
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