Monday, November 8, 2010

Music Business/Law Tips - "Foreign Performance Income" (Part 2)

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.

Ben McLane Esq

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