Royalty-Free Music Is Being Redefined by Musicians Who Forego PRO Membership

As large stock media companies more tightly define what makes a piece of music truly “royalty-free”, many musicians are choosing to forego membership in performing rights organizations (known as PROs) such as ASCAP (American Society of Composers and Publishers), BMI (Broadcast Music Incorporated), or SESAC (Society of European Stage Authors and Composers), among other international organizations.

PROs were originally organized in the early twentieth century to protect the rights of musicians whose compositions were being performed in public for commercial gain (i.e., radio, television, sporting events, business meetings, etc.). Once these artists united and began charging fees for such usage, a new type of royalty stream was created, known as the “performance royalty”. To composers, this type of royalty was separate from the “mechanical” royalties they earned through record sales and printed sheet music sales.

As an example of how significant performance royalties have become, in 2010 alone ASCAP collected $935 million for usage of music written by its members.

But in the wake of declining music production costs due to software innovations and the crowdsourcing of talent over the Internet, commercial music libraries are now receiving submissions from music composers who have chosen not to join these performing rights organizations, particularly composers from countries outside of the G-7 such as Russia, the Czech Republic and Nigeria. For these musicians, the number of bureaucratic steps through which a royalty payment must pass to finally make its way to them, make the potential for meaningful revenues from PROs extremely unlikely.

“I’m not an active member of any PRO in the first place because supposedly with royalty-free music the customer doesn’t need to pay any mechanical royalty fees, or extras,” says Manual Ochoa, a musician based in Argentina.”But the fact is that in my country it is very difficult to collect foreign performance royalties,” added Ochoa.

In many ways Ochoa’s free-agent status affords him opportunities and advantages which are not available to members of PROs.

For example, the upload agreement of iStockPhoto, a leading microstock photo website that began selling music in 2007, states:

“…if you are a member of ASCAP you may well be entitled to directly license your work but you are not permitted to upload it to iStock.”

And PROs define a public performance as “any music played outside a normal circle of friends and family”. This means that music created by PRO members can be much costlier to use in restaurants and hotels than music created by non-PRO members like Ochoa, thus providing Ochoa and other non-PRO musicians the opportunity to offer their music for a lower price.

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