performance rights

The next huge upset in online music

May 28, 2013: 9:39 AM ET

As digital delivery eats away at music royalties, performing rights organization ASCAP is seeing a boom in membership.

By Heather Muse, editor

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FORTUNE -- Just a decade ago, music streaming services like Spotify and Pandora seemed like a pipe dream: vast libraries of legal music that could be accessed with just a computer or phone. With Google entering the fray earlier this month with its Play Music All Access music service, streaming is definitely here to stay, and it's one of many factors motivating artists and songwriters to mobilize and fight for a bigger piece of the pie.

One way in which songwriters are fighting for their work is by joining performing rights organizations, or PROs.The American Society of Composers, Authors and Publishers (ASCAP), which has been in operation since 1914, has seen a jump in membership in the past five years, gaining 300,000 members in the past four years alone. ASCAP has 460,000 members. Broadcast Music Inc. (BMI), another PRO, has 600,000 members, according to its website.

"We're in a world where more music is being played more often on many devices," says Paul Williams, ASCAP president and chairman of the board, as well the songwriter behind such hits as "Rainy Days and Mondays" and "The Rainbow Connection." PROs are leading the fight in getting songwriters what they consider a fair share of royalties for any "performance" of a song, be it a play on a streaming service, radio, a video game, or television show, to name a few of the diverse avenues where music royalties can accrue.

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Songwriters have been struggling for performances to be recognized as worthy of garnering royalties since before the days of radio. "No matter what system the music is delivered on, the soul of the machine is the art," Williams says. "It's the music or the movie. The soul of the machine is worthy of decent payment."

Decent payment in the digital age has been hard to come by, as royalty rates on streaming services such as Pandora (P), iTunes (AAPL), and Spotify could be as low as $.006 per performance (or, 6 cents per 100 songs played), according to The Verge. "It's a struggle for survival," says Sam Hollander, a songwriter and producer who worked with artists such as Train and Gym Class Heroes. He's been an ASCAP member for 15 years. "My livelihood is under siege."

Even relative newcomers to the music industry understand the fight ahead. Priscilla Renea, a songwriter and artist who has been working in music since the age of 16, says at first, she didn't understand the level of protection PROs provide. "I'm in the Internet generation. I used to be one of those kids doing music before knowing better," she says. "I understand both sides of it" by growing up in the age of Napster and the wild west of file-sharing and illegal downloads.

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"It's interesting to me when people take music for granted," says Renea. "Imagine trying to drive your car without music, or watching a movie without music." Renea stresses that technology companies have to understand that content is not free. " I know what it's like when you create something and you want control over it," she says. "Without the music, they wouldn't have the product to sell."

Even as streaming rates are low, outlets such as radio and television still bring in the most money for artists. "Traditional sources are still the strongest," says Williams.

That doesn't mean that PROs are going to give up the fight any time soon. "This is intellectual property," says Williams. "They're writing from the center of their chest."

ascap

Courtesy: ASCAP

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