Excessive Royalties of ASCAP and BMI

When American composers want to ensure that they will always share in profit derived from their works, they most commonly turn to BMI (Broadcast Music Incorporated) or ASCAP (American Association of Composers, Authors and Publishers).  Unfortunately, if composers don’t register with one of these agencies, it can become difficult to enforce royalties with time-consuming and expensive lawsuits.  If composers do register, those who wish to perform works protected by BMI or ASCAP become the victims of pricing that is totally out of line.

In 2007, I gave a concert that included PDQ Bach as part of the program.  (For those who don’t know, P.D.Q. Bach is a contemporary composer who parodies classical music, writing music as if he were “the oddest of J.S. Bach’s twenty-odd children.”)  My program was 90 minutes in length.  The PDQ Bach was only about 12 minutes of that (a couple preludes/fugues from the Short-Tempered Clavier, and the Two-Part Contraption in C and Rondo Capriccioso for Charles III: “The Reign in Spain” from Notebook for Betty Sue Bach).  It was a very small venue, and around 80 people showed up at ticket prices of $15/$10, which brought in something around $1040 (averaging around a $13 ticket price).  It seems to me that a truly fair scenario for calculation of royalty fees would have been:

  1. Calculate how much the copyrighted work contributes to the total length of the concert.  12 minutes divided by 90 total minutes = 13.3%.  The PDQ Bach was only 13.3% of the total length of the concert.
  2. Calculate the percentage representing the work of composing, publishing, and distributing (for the sheet music) vs. the work of promoting, producing and performing (for the concert).  Any number here is arbitrary (and certainly different in every situation), but it still seems more than reasonable to split it 50/50.  While concerts wouldn’t exist without the composer/publisher behind each work, a concert also wouldn’t exist without the performer/presenter.
  3. Multiply the gross income of the concert by the length and work percentages calculated in steps 1 and 2.  This would be ($1040) x (0.133) x (0.5) = $69.33, which would be a fair royalty for the composer and publisher to split.

Unfortunately, fairness is not a priority of those creating royalty formulas.  Here’s how much the PDQ Bach actually cost to perform, and how it was calculated:

  1. Add up the total minutes of the copyrighted work(s) performed (12 minutes).  Disregard the total length of the concert.
  2. Find out how many total seats there are in the venue you perform in (110 seats).  Disregard how many people actually show up.
  3. Send these figures to the royalty company so they can tell you how much you owe.  12 minutes, 110 seats – abracadabra, do the hokey pokey and turn yourself around – and it works out to almost $200.

Many weeks before the concert, I did the math above and quickly saw that the presenter was already going to have a difficult time covering their costs, even if all 110 seats were filled at the maximum ticket price (which would be $1650), because they had to pay me $1200, then they had promotion costs, program printing costs, tech costs, and venue liability insurance costs on top of all that.  I asked the presenting venue if they wanted me to find something else to play since the royalties for the P.D.Q. Bach were nothing short of disgusting.  Even though the P.D.Q. Bach was already in my fingers, and as much as I (and my audiences) love P.D.Q. Bach’s music, I kind of hoped that they would ask me to learn something else so I could call up the publishing company and inform them of the revenue they lost.  But the venue insisted I continue with the P.D.Q. Bach since they were funded with grants and donors that allowed them the luxury of not worrying about making profit at each recital.  Apparently very few of their concerts bring in a profit, so they just didn’t care.  I was happy to play the P.D.Q. Bach, but unhappy that the licensing company was being rewarded for bad behavior.

The licenser made almost 20% of the total gross revenue of the entire concert.  Seriously?  Suppose I had played a 90-minute concert consisting of 70 minutes of P.D.Q. Bach and 20 minutes of my own compositions.  If 12 minutes costs me $200, then 70 minutes would cost me $1077, assuming the formula is linear, which it may not be – but let’s still consider the logic here.  This figure actually exceeds the gross revenue of the entire concert itself, which would mean that the company is actually stealing all revenue generated by my own compositions, plus more.  Now, suppose the formula is not linear, and it would only cost me a “mere” $500 or $800.  It may be a shade of grey, but theft is still involved.  Anything exceeding the fairness formula I described above constitutes theft on the part of royalty companies, because they are preventing presenters, producers and performers from getting their fair share of compensation for their work.

And do they not care that they made money off of 30 empty seats?  Who are they kidding?  No wonder royalty companies require you contact them in order to get pricing – such blatant price gouging is certainly not good for publicity, and surely many composers, authors and publishers would avoid these companies if their royalty formulas (or tables) were more publicly visible.

What constitutes a public performance?  ASCAP went after the Boy Scouts and Girl Scouts for singing copyrighted songs around their campfires.  Despite retracting their greedy demands, I will never let them live that down, because this sort of thinking seems to permeate every policy they make.  ASCAP tried (and failed) to define a mere music download to be a “public performance” (Techdirt article).  ASCAP is seeking licensing fees from places that have a Guitar Hero arcade game (Techdirt article).  And for crying out loud, ASCAP would even like to collect royalties for 30-second audio previews found on iTunes (cnet article)!  Nevermind the fact that these 30-second clips clearly fall under Fair Use and serve as promotion for composers ASCAP claims to represent.  Wall Street, move over.  I think Google’s internal “Don’t Be Evil” motto could have been solely inspired by ASCAP. [Update on 7/28/14:  An exciting and promising lawsuit has been filed against Warner/Chappell Music to return millions of dollars in license fees for the song, "Happy Birthday" - see this Techdirt article].

What This Means For Composers

ASCAP is severely discouraging the performance of new works today.  They do not stand for artists;  they stand for themselves.  They are the music industry equivalent of real estate agents, who are quickly being replaced by the power of the Internet.  They are mostly arbitrary middle men who insert themselves into the profit equation and eat up far more money than the value of the services they actually deliver.  Upon closing, real estate agents can get paid tens of thousands of dollars for a grand total of 20, 40 or 80 hours of work.  At least real estate agents have to close before earning their money.  Royalty companies demand the money up front!  They ought to wait until after the concert so they can collect based on actual attendance rather than the theoretical best-case-scenario attendance.

What is the real alternative here?  I believe that composers are far better off representing themselves today.  If composers reduce their options to the essential economic reasoning behind each option, in my opinion the decision becomes much more clear:

  1. Be Represented By A Licensing Company (emphasis on justice):  Get paid for the vast majority of performances and recordings of your works and get compensated for violations of copyright without having to go to battle yourself, but with far less performances and recordings since performers/presenters have to pay punishing fees.
  2. Represent Yourself (emphasis on exposure):  Get paid for a smaller majority of performances and recordings of your works and get no compensation for copyright violations (or get compensation by going to court yourself), but with far more performances since performers only have to pay very reasonable fees.  There are no unnecessary obstacles getting in the way of exposure of your music to the public.

How many composers are going to be in a situation where they need the protection of a licensing company in order to recover a million dollars in copyright infringement penalties?  If the copyright infringement is truly that extensive, then obviously the composer would have sufficient case to get a lawyer to work for X% of the settlement (which royalty companies are going to take anyway!).  A licensing agency only becomes an unnecessary middle man in that case.  So the question then becomes:  is it really worth giving up all the extra exposure that results from a more open policy all in the name of small-time justice that may not even be necessary?

I haven’t had as much experience dealing with BMI, but I’ve heard there isn’t much difference between ASCAP and BMI.  Ultimately, licensing companies need to change their ways.  They won’t change their ways as long as they’re being rewarded for bad behavior.  Composers, authors and publishers need to send them a clear message that the benefit of their services far exceeds the cost the public pays for them.

About Chad Twedt

Chad is a pianist, composer, piano teacher and blogger with a Masters Degree in Piano Performance. He received the 2005 Nevada Arts Council Fellowship Grant for the composing and performing on his Ostinato CD.
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