A Performance Rights Organization (PRO) is an entity that collects and distributes royalties on behalf of songwriters, composers, and music publishers for the public performance of their works. Public performances include music played on radio and television, in live venues, online streaming services, and other public spaces.
PROs monitor and collect royalties whenever a copyrighted musical composition is publicly performed. They establish licensing agreements with various businesses and organizations that use music in public, ensuring that the creators and copyright owners are compensated for the use of their work.
PROs serve as intermediaries between creators and users of music. They track performances of copyrighted music, collect licensing fees from businesses and venues, and distribute these royalties to the rights holders (songwriters, composers, and publishers) after deducting a small administrative fee. PROs also provide licenses to businesses, allowing them to legally use copyrighted music.
Some well-known PROs include ASCAP (American Society of Composers, Authors, and Publishers), BMI (Broadcast Music, Inc.), and SESAC in the United States, PRS for Music in the United Kingdom, SOCAN (Society of Composers, Authors, and Music Publishers of Canada) in Canada, and GEMA in Germany, among others. These organizations play a crucial role in ensuring that creators are compensated for the public performance of their musical works.
Why do PRO's have a separate writer and publisher share
The distinction between a writer's share and a publisher's share in the music industry is a standard practice that ensures fair compensation for the various parties involved in the creation and distribution of music. Here's why this division exists:
1. **Creative Contribution:** The writer of a song is the person or people who create the lyrics, melody, and composition. This creative input is the foundation of the song. The writer's share is intended to compensate these individuals for their artistic contribution to the work.
2. **Financial Investment and Risk:** The publisher, on the other hand, is often a company or an individual who invests in the song's promotion, marketing, and distribution. They take on financial risk to ensure the song reaches a wider audience and generates revenue. The publisher's share is a way to reimburse them for this investment.
3. **Different Roles:** Writers and publishers play different roles in the music industry. Writers focus on the creative process, while publishers focus on the business aspects of music. This separation of roles justifies the division of income.
4. **Administration and Collection:** PROs (Performing Rights Organizations) collect royalties on behalf of songwriters and publishers. Having separate shares simplifies the process of royalty collection and distribution. Writers receive their share directly for their creative work, while publishers receive their share to cover their investment and administrative efforts.
5. **Negotiating Leverage:** Having a separate writer's share and publisher's share provides flexibility during negotiations. It allows songwriters and publishers to negotiate their individual deals, taking into account their specific contributions and the overall value they bring to the song.
6. **Fair Compensation:** Ultimately, the division of shares ensures that both the creative minds behind the music and the entities responsible for its commercial success receive fair compensation for their respective contributions.
It's important to note that the specific percentages for the writer's and publisher's shares can vary and are usually agreed upon through negotiations or contractual agreements. These percentages reflect the contributions, risks, and bargaining power of the parties involved.
Can a writer also be a publisher?
Yes, a songwriter can also be a music publisher. In fact, many songwriters choose to establish their own publishing companies. When a songwriter acts as their own publisher, they retain all the rights to their music and have direct control over its use and licensing.
By being both the writer and the publisher, an artist can maximize their earnings from their music. They receive both the writer's share, which compensates them for their creative work, and the publisher's share, which covers their investment in the promotion, marketing, and administration of their music. This arrangement allows for greater creative and financial control over one's work.
Establishing a publishing company does involve additional responsibilities, such as handling administrative tasks, collecting royalties, and negotiating licensing deals. However, it can be a strategic move for artists who want to have a more active role in their music careers and retain a larger portion of the profits generated by their creative work.
How do PRO's divide the shares between writers and publishers?
Performance Rights Organizations (PROs) divide the shares between writers and publishers based on the contractual agreements between the songwriters and their publishers. When a songwriter signs with a publishing company, they negotiate the terms of the publishing deal, including the split between the writer's share and the publisher's share.
The standard division is often 50/50, where 50% of the royalties go to the songwriter (or songwriters, in the case of multiple collaborators) and the remaining 50% goes to the publisher. This is a common arrangement, especially for new or less established songwriters.
However, the specific split can vary based on the songwriter's bargaining power, the level of success, and the negotiation with the publisher. Established and successful songwriters might have more leverage to negotiate a more favorable split, such as 60/40 in their favor, where they receive 60% of the royalties, and the publisher receives 40%.
It's important to note that these splits typically apply to the public performance royalties collected by PROs. Other revenue streams, such as mechanical royalties (royalties from physical or digital sales of music) or synchronization fees (for music used in movies, TV shows, commercials, etc.), may have different splits based on separate negotiations and agreements.
Ultimately, the division of shares is determined by the contracts and agreements made between the songwriter and the publisher, and these terms can vary widely in the music industry.