How do performing rights organizations work, and why are ASCAP and BMI under consent decrees?

Most songwriters first meet a performing rights organization, or PRO, when they ask where their radio and venue money comes from. Our page on collective rights management and music publishing places PROs among the other bodies that collect for a song. This page explains what a PRO actually licenses, how writers and publishers are paid in general terms, and why the two largest operate under federal court orders. It sits within our entertainment law work for music, film and TV.

How performance royalties move, step by step

1. Agree the split. Co-writers settle each person's share, ideally in a signed split sheet, because every later registration copies those numbers. Our article on music copyright ownership disputes shows what happens when that talk comes too late.
2. Affiliate. Each writer joins an organization, and the publisher, or the writer's own publishing company, joins for the publisher share.
3. Register the song with the organization. List every writer, publisher and share. That is not a copyright registration; our guide to registering a song covers that separate filing.
4. Music users take licenses. Bars, venues, stations and digital services pay for blanket licenses covering the whole repertoire.
5. Performances are matched and paid. The organization matches performance data to the registered shares and pays members under its own rules.
6. Rate disputes go to a federal court. If a user and ASCAP or BMI cannot agree on a price, either side may turn to a rate court in the Southern District of New York. Apart from narrow licenses for jukeboxes and public broadcasting (sections 116 and 118), song performance rates are not among those the Copyright Royalty Judges set (17 U.S.C. 801(b)(1)), as our page on who sets music royalty rates shows.

What does a performing rights organization license?

The public performance of musical works. The Copyright Act defines a performing rights society as an association, corporation or other entity that licenses the public performance of nondramatic musical works on behalf of their copyright owners, and it names ASCAP, BMI and SESAC as examples (17 U.S.C. 101). The right itself belongs to the composition's owner, who has the exclusive right to perform the work publicly (17 U.S.C. 106(4)).

A performance is public when it happens at a place open to the public, or when it is transmitted to the public, whether listeners receive it in the same place or apart, at the same time or at different times (17 U.S.C. 101).

A PRO does not license the recording. A sound recording's owner has no performance right under 106(4); its performance right reaches only digital audio transmissions (17 U.S.C. 114(a), 106(6)). That split is the reason an FM spin pays the writer and not the singer, as our page on why AM/FM radio does not pay recording artists explains.

Why do businesses license music through a PRO?

Because clearing thousands of songs one by one is not realistic. The Department of Justice describes PROs as licensing users such as bar owners, television and radio stations, and internet music distributors, and explains that these "blanket licenses" give users immediate access to millions of songs without separate negotiations (DOJ statement, August 4, 2016). Its 2021 statement adds that collective licensing also spares writers and publishers from having to license, or enforce against, many users one at a time (DOJ statement, January 15, 2021).

How do songwriters and publishers join and get paid?

Membership and payment run on each organization's own rules. According to the DOJ, ASCAP and BMI pay only their own members and do not account to members of other PROs (DOJ, 2015 review page). Money earned outside the United States follows separate rules, which our page on performance royalties from other countries outlines.

The decrees also give writers some specific protections. The 2021 DOJ statement lists five-year caps on membership agreements and a requirement that ASCAP and BMI accept as members any songwriter, artist or publisher who meets certain requirements.

Why are ASCAP and BMI under consent decrees?

Antitrust. The decrees resolved lawsuits the United States brought against each organization in 1941 under Section 1 of the Sherman Act, 15 U.S.C. 1, to address competitive concerns about the market power each acquired by pooling the public performance rights of its member songwriters and publishers (DOJ, 2019 review page). As the Department puts it, a blanket license sells the rights to many separately owned, competing songs at a single price, a practice that risks lessening competition (DOJ 2016).

The ASCAP decree was last amended in 2001 and the BMI decree in 1994 (DOJ, 2014 review page). They bind only ASCAP and BMI; the DOJ itself notes that other PROs operate without the same constraints (DOJ 2021).

What happens when a PRO and a music user cannot agree on a rate?

Each decree provides for a separate "rate court" that either side may turn to when they cannot reach an agreeable price for a license (DOJ 2016). The Music Modernization Act changed how those disputes are assigned: they now go to one of a number of judges in the Southern District of New York, rather than the judge who oversees the decree (DOJ 2021). The Copyright Office describes the change as assigning each new rate dispute on a rotating basis (Copyright Office MMA FAQ).

The same Act, Pub. L. 115-264 of October 11, 2018, repealed former 17 U.S.C. 114(i). That subsection had barred proceedings that set royalties for the public performance of musical works from taking into account license fees for the digital performance of sound recordings (§103(b)). A replacement provision, printed as a note to section 114, keeps that bar except in proceedings for digital audio transmissions other than transmissions by a broadcaster (§103(c)).

Small businesses have a separate route. An individual proprietor who owns or operates fewer than 7 non-publicly traded establishments where music is performed publicly, and who finds a decree society's license fee unreasonable, may file an application in federal court and serve it on the society (17 U.S.C. 513). The proceeding must start within 90 days after service and end within 6 months, either in the district that oversees the decree or at the seat of the federal circuit where the business sits; Georgia is in the Eleventh Circuit (28 U.S.C. 41). Meanwhile the proprietor may keep playing music by paying the industry rate, which is presumed reasonable, into escrow, and the result binds only that proprietor. Our page on federal copyright cases in Atlanta explains how federal court works for a Georgia business.

What did the Justice Department's reviews conclude?

The Department has reviewed the decrees periodically since 1941. The two most recent reviews on its website ended this way:

• 2014 to 2016. Opened at ASCAP's and BMI's request and closed by a statement dated August 4, 2016. The Division decided not to seek to modify the decrees, concluded that they require ASCAP and BMI to offer full-work licenses, and said it would not at that time support other proposed changes, including letting publishers "partially withdraw" from the PROs. Its 2021 statement records that the Second Circuit later affirmed a district court decision that the BMI decree permits fractional licensing.
• 2019 to 2021. Opened in 2019, with public comments due August 9, 2019, and closed by a statement dated January 15, 2021. That statement acknowledged continuing disagreement over the decrees, said continued review remains necessary, and said they should be reviewed every five years. It also noted that the Music Modernization Act requires the DOJ to notify Congress before moving to terminate one of them.

How is this different from SoundExchange and the MLC?

Different rights, different collectors. Noninteractive digital services that perform sound recordings can use a statutory license and pay a collective designated by the Copyright Royalty Judges, which the webcasting regulations name as SoundExchange, Inc. (37 CFR 380.2); our page on SoundExchange and digital performance royalties covers that side.

The mechanical licensing collective administers blanket licenses for digital phonorecord deliveries of musical works, which cover reproduction and distribution, and the statute says that system does not affect any right of public performance in a musical work (17 U.S.C. 115(d)(13)). An on-demand stream can involve both: it counts as a digital phonorecord delivery (115(e)(13)), and the service also needs a performance license for the song from a PRO or the copyright owner (114(d)(3)(C)). Our page on the Mechanical Licensing Collective and unclaimed royalties explains the mechanical side.

What changes the answer

• Which right is used. A PRO license covers only the song's public performance under 106(4). Copies, downloads and the reproduction side of streams are mechanical uses under section 115, priced as our page on the 2026 mechanical royalty rate explains.
• A statutory exemption. Section 110 excuses some performances entirely (17 U.S.C. 110). The small-business exemption covers only transmissions from an FCC-licensed radio or TV station, or a cable or satellite carrier for audiovisual programs, so a streaming playlist, a CD or a live band is outside it.
• Which organization. The decrees, the rate court and the section 513 route apply only to a society bound by a rate-setting consent decree, which today means ASCAP and BMI.

A worked example

Common mistakes

• Registering only as a writer, so the publisher share goes unclaimed when no publisher or company of your own registers it.
• Registering shares that differ from the split sheet or from a co-writer's registration, which invites a dispute over who is owed what.
• Expecting a PRO to pay for the recording or for mechanicals; webcast recording income and streaming mechanicals run through SoundExchange and the MLC.
• Assuming any radio in a business is exempt. Section 110(5)(B) has square footage, speaker and screen limits, and never covers streaming, CDs or live music.
• Treating the 2021 DOJ statement as the final word, when the Department said the decrees should be reviewed every five years.

What to do this week

1. Compare the split sheet for every released song with your registrations and your co-writers' registrations.
2. Confirm the publisher share of each song is registered, through a publisher or your own publishing company.
3. Check that your recordings are registered for digital performance income, as our SoundExchange royalties page explains.
4. If you own a business, measure its gross square feet without parking, count speakers and screens, and note where the music comes from.
5. Register your most valuable songs, using our page on copyright registration cost and timing to plan the filing.

Frequently asked questions

Does a performing rights organization register my copyright?

No. Registering a song with a PRO tells it who to pay; it is not a registration with the Copyright Office. For a United States work, registration (or a refused application) generally has to come before you can sue for infringement (17 U.S.C. 411(a)).

When someone covers my song, who earns the performance royalties?

The song's writers and publishers, because the cover performs their composition. Our page on cover song licenses covers what the covering artist needs to release it.

Does a PRO license let someone put my song in a video?

No. A performance license does not cover copying the song into a video, and the compulsory mechanical license does not reach audiovisual works, since "phonorecords" exclude sounds accompanying them (17 U.S.C. 101). Our page on who owns a music video explains the separate permissions a video needs.

What can happen to a business that plays music with no license?

Unless an exemption applies, the copyright owner may sue for infringement and seek actual damages or the statutory damages described above. Our page on copyright infringement damages explains how those amounts are set.

Can a songwriter license a song directly and skip the PRO?

For ASCAP and BMI members, the 2021 DOJ statement says the decrees prohibit exclusive licensing and protect members' ability to license their works directly. Other PROs are not bound by the decrees, so the terms of their membership agreements govern what a writer may do.

Zala IP Law advises songwriters, publishers and artists on affiliation, registrations, publishing deals and royalty questions. If you are choosing a PRO, setting up your own publishing, or tracing performance income that never arrived, request a consultation or call 404-313-1701.