Zoe Keating Tries To Make Sense Of The Performance Royalty System
Guest post by Zoë Keating.
As a DIY artist it's up to me to educate myself about the music business. I do my best, but some elements of it seem exceedingly opaque, in particular, performance royalties as handled by the performing rights societies such as ASCAP and BMI. The royalty "system" for radio and television is confusing enough, but I didn't really know anything about live performance royalties. Here's what I've recently learned.
A little over a year ago I got a booking agent, Mark Lourie of Skyline Music. He and the entire agency are wonderful and they've made a huge difference to my career. Not only does my agent get me great gigs, but he also makes sure I get the best possible deal and have a contract.
After a concert, there is this thing called "doing the settlement". This is where the artist or their representative meets with the promoter, goes over the financial outcome of the night in relation to their contract…and gets paid.
Sometimes the contract is for a percentage of the gross revenues, but more often for me, I get a guarantee and maybe a percentage of "net" if it was a positive number. The line item deductions that go into the calculation of net are things like sound & lights, staff, venue rental, advertising, insurance, etc. There tend to be many things in the calculation of "net" and I can't help but notice that one of them is ASCAP.
For example, at one concert I played last month the gross ticket sales for the night were $9336. Of the many expenses deducted, one of the items was $86 to ASCAP.
What is this? This is the nightly portion of a license fee that the hall pays to ASCAP for the permission to perform music by ASCAP artists in their venue. My compositions are registered with ASCAP, so I should get this money eventually, right?
Wrong.
When I've performed in the UK I listed all the songs I played on something called a PRS from and gave it to the venue/promoter. Six months or so later, I got a check for the percentage of the night's revenues due to me according to the PRS formula for that venue. So, thinking that maybe instead of placing the burden on the venue, ASCAP puts it on the artist… I called ASCAP to see how I should go about claiming these concert royalties.
The customer service representative on the phone said there was nothing for me to claim. He informed me that ASCAP pays out performing royalties only to the 200 top-grossing concert tours, as determined by Pollstar. They also pay royalties for "Live symphonic and recital concerts", whatever they are (he said I don't quality for those).
In other words….
Every day, thousands of venues are required to pay a percentage of their gross ticket sales to ASCAP who then gives that money to…let's look here on Pollstar and find the highest-grossing concerts for 2011….U2, Taylor Swift, Kenny Chesney, Lady Gaga, Bon Jovi, etc.
Looking online, I found an ASCAP program that I didn't know about. Perhaps in an attempt to compensate for this incredible distribution of wealth to the wealthy, ASCAP has something called the "ASCAP Plus Cash Awards". What are these amazing "awards"?
"For over 50 years, these special awards have recognized writer members each year for substantial performance activity in media and venues that are not included in performance surveys, or whose works have unique prestige value. The program has also been an inspiration to members just starting out to persevere in advancing their music careers. More than 4,200 songwriter and composer members of ASCAP received Plus Awards in their January 2012 disbursement…"
You have to submit an application to ASCAP to qualify for consideration (which I just did). The gist of it, as far as I can tell, is that if you are the winner of this black-box calculation ASCAP will make a special award to you of a portion of your own money. Awesome! I'll let you know if I "win".
It's been extremely interesting to discover how this music business works. I'll keep passing on information to you as I learn it.
p.s. To some of the commenters….I am composer and publisher of my works, and have both composer and publisher accounts with ASCAP.
Disclosure: Skyline Music is a sister company to Hypebot and MusicThinkTank.
This is an interesting post because I understand the confusion of it Zoe. I’m an indie artist myself who is looking for extra income streams and live performance royalties has been something I’ve tried to keep on eye on since I started. I’m a member of BMI as a writer and publisher. What I like about BMI is they have a program called BMI Live that they just started last year where if you write and perform your own material you get performance royalties. I play alot of open mics, showcases and smaller venues but I’ve consistently saw royalty checks from even these so I know an artist of your status should be able to as well. I think ASCAP should create a program such as the BMI Live one so that even the indie artist can receive royalties from performances where they may never see them from radio performance royalties. Or you could just switch PROs. I’ve researched a list of revenue streams that most people in the biz didn’t even know existed (even major artists and managers). SMH.
I am pretty astounded that the venue is passing off it’s ASCAP fees to you- I’ve yet to encounter that one! Pretty cheeky. Next they’ll be asking for a percentage of the janitor’s wages or the electric bill I guess!
More to the point- in these days of easy information transfer it’s crazy that ASCAP hasn’t figured something out about making their system work for the vast majority of their members who are not in the Top 200. I initially signed up with BMI because their system for ‘concerts and recitals’ applies occasionally to what I do. But the new BMI Live feature really is great. You log on, fill in some venue info, click on whatever songs from your catalog you performed that night, and that’s it.
“ASCAP pays out performing royalties only to the 200 top-grossing concert tours, as determined by Pollstar.”
That’s utterly ridiculous. They probably got away with it “back in the day”, but with more artists actually learning how things work in the music industry and going it alone without an actual label there will eventually be a backfire of a certain level of unfair treatment.
Maybe I’m a babe in the woods here, but let me see if I get this straight:
You pay them to pay you,
Venues pay them to pay you,
and you pay the venues to pay them to pay you.
It seems like a combination between a shell game and a perpetual motion machine.
The licensing rates in concert halls are calculated by percentage of ticket sales per concert….so it *is* a deduction from the night’s revenue, is it not?
I didn’t make this up, the rates and how they are calculated are listed in ASCAP’s concert licensing agreement which you can find online at:
http://www.ascap.com/~/media/Files/Pdf/licensing/types/CONCERT_BLANKET_WITH_RATE_REPORT.pdf
I also play in bars and clubs, how it works for them is an annual lump sum based on amount of live concerts per week and venue capacity:
http://www.ascap.com/~/media/Files/Pdf/licensing/types/BGT.pdf
In either licensing situation, I don’t get by what logic this is NOT a deduction from the night’s revenue, but I’d love to hear an explanation.
My comment got mangled, so I’ll post again:
The licensing rates in concert halls are calculated by percentage of ticket sales per concert….so it *is* a deduction from the night’s revenue, is it not?
I didn’t make this up, the rates and how they are calculated are listed in ASCAP’s concert licensing agreement which you can find online at:
http://bit.ly/GX1RJZ
I also play in bars and clubs, how it works for them is an annual lump sum based on amount of live concerts per week and venue capacity:
http://bit.ly/GX1RJZ
In either licensing situation, I don’t get by what logic this is NOT a deduction from the night’s revenue, but maybe I’m dim. Explain it to me!
Thanks for explaining the BMI Live features. I knew there were some working solutions for this problem.
I’m not a lawyer, so I could be very wrong, but it seems like this could be grounds for a class action lawsuit. I think it would be worth investigating.
Zoe, you should definitely apply for an ASCAPlus award. Considering that I’ve gotten one the past couple years, and I don’t perform live, the bar must not be too high ;). I’ve only gotten $100 a pop, but it takes all of 10 minutes to apply.
It’s also very strange that the larger the venue, the lower the percentage charged by ASCAP. So a small theatre gets charged 0.8% while an arena or stadium is charged only 1/4 that amount. How regressive.
ASCAP has had a solution for over 50 years … it’s called ASCAP Plus…
http://www.ascap.com/Press/2012/0313_ascapplus.aspx
The ASCAP Awards themselves would never make up for the amount of performing that a touring artist like Zoe Keating does. To apply for the award, you need to list all of your “achievements” for the year, like “scored 2 independent films, both of which played at Sundance and Tribeca, performed 50 live concerts” – that sort of thing. And even with a list of accomplishments like that, you’ll be lucky if you hit the $200-250 range for your ASCAP Award. This is one of those instances where that entire ASCAP fee for that night’s performance, perhaps less some tiny administration fee, should be paid to the artist who performed their ASCAP-registered and ASCAP-published works at a venue that was paying a performance license fee to ASCAP for that one specific artist that night. Why it *doesn’t* work that way, I’ll never understand… and why any PRO continues to get away with that sort of thing? I’ll also never understand.
It’s an absurd situation and my mind boggles at the fact that I still encounter apologists for ASCAP who should know better.
ASCAP has launched ASCAP OnStage, a new addition to ASCAP’s public performance survey. ASCAP members have an opportunity to receive royalties when their music is performed live at venues of all sizes throughout the country. Members log their performances for payment in ASCAP’s regular distribution: http://www.ascap.com/onstage
Thanks for the update!
Zoe, you aren’t understanding it correctly. In the ASCAP Concert licensing agreement…
Sect 1(b) “…and shale continue thereafter for addtional terms of one year each…”
Section 2(a) “This license is NOT assignable or transferable by operation of law…”
Section 2(b) “This license is strickly limited to the LICENSEE and to the premises wehre each concert is presented…”
Re-read those 10 or 20 times so they sink in.
Next, jump to the fee schedule…
“**”Gross Venue” means all monies recived by the LICENSEE or on LICENSEE’s behalf from the sale of tickets for each concert. Gross revenues SHALL NOT include… commissions or fees paid to automated ticket distributors…or other facility fees…”
And then near the bottom:
“Minimum Annual Fee. The minium annual fee payable hereunder shall be $230.00”
OK… so after you’ve read this a bunch of times… realize that you ARE NOT the licensee, correct? The venue is. So because of Sect 2 (a) and 2 (b), it is illegal for the venue to transfer this license onto you.
That means it is illegal to make you pay for the ASCAP royalties from your ticket sales.
You have to realize when they say GROSS REVENUE, they are talking about the GROSS REVENUE the venue makes after they pay out commissions (like your fee).
Also, here’s a scenario for you to contemplate. What if you decided to do an entire set of covers and all the covers are from BMI songwriters? Each venue has to pay an annual fee to ASCAP and BMI for the right to allow ANY SONG from either’s catalog to be performed.
This again is another reason why the fee isn’t supposed to be charged back to the artist’s ticket sales. It comes out of the gross revenue of the concert venue. The fact that they don’t charge you for BMI yet you have every right to perform BMI songs in your set as covers shows the problem with their assertion that you have to pay ASCAP since you are ASCAP.
You don’t. THEY PAY ASCAP for the right to have you performing there.
So there are several problems here. One is that the venues are ripping you off. Two is that your booking agent is letting them. And three your lawyer isn’t calling them out on this.
If you don’t have a lawyer, hire one ASAP. And get a good one. Specifically find an entertainment attorney that specializes in artists and copyright. Sometimes entertainment law firms are best since they usually have a separate lawyer for each specialty. So by hiring the firm you get access to a pool of lawyers with different specialties based on your needs. DO NOT just get any old lawyer. The music business is very complex and has a lot of “hidden” or “unspoken” terms and loopholes within its legal jargon. A real estate attorney or a tax attorney isn’t going to understand or even know about all of this. Look for lawyers that have a list of successful clients, preferably similar to you and your situation.
Yes the retainer might be expensive. But you get what you pay for. If you spend $2500~$5000 on a lawyer that ends up fighting for you and you end up earning an extra $10,000 to $20,000 that year, was the retainer worth it?
I should also point out that if you are getting screwed on this (paying ascap licenses for the venues) who knows where and how else you are getting screwed. You need a good lawyer to protect your company/business.
Nice one, there is actually some great points on this post some of my associates will find this worthwhile, will send them a link, thanks
http://www.surveytool.com/training-survey/
ASCAP needs to review this formula ASAP and allow the specific artist to reclaim their share of the performance license at any venue they perform.