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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