Go Get Your Money

May 24, 2011
Understanding Foreign Public Performance Royalties


By George Howard(Follow George on Twitter)

Introduction
We spend a considerable amount of time discussing the role of copyright in the music business on the TuneCore blog. Because the entire music business stems from the six rights enumerated in copyright law that are automatically granted to a songwriter who creates an original work and either records or writes that work down, we feel very strongly that you thoroughly understand each of these rights.

As streaming continues to emerge as the dominant manner in which music is consumed, one of these rights — the exclusive right to publicly perform your copyright — takes on increased significance. As we have discussed in this space before, when a song is: streamed from a website, played on radio, broadcast on TV, and/or performed on stage, the copyright holder of the song must grant the broadcaster (website, network, venue, etc…) the right to publicly perform the copyrighted work. Typically, this right is granted in exchange for monetary compensation.
As negotiating and settling accounting each and every time a radio station or web site wanted to broadcast an author’s copyrighted work would be far too time consuming (and result in far fewer public performances of songs), clearinghouse agencies were created to negotiate public performance agreements between authors and broadcasters. In the United States, there are three clearinghouse agencies, known as Performance Rights Organizations (PROs): ASCAP, BMI, and SESAC.

As stated, each acts as an agent for the copyright holders (songwriters and/or publishers) of the songs, and issues licenses (for a fee) to the broadcasters which give these broadcasters the rights to publicly perform the songwriters’ works. From these collected fees, the PROs distribute the money (after overhead) to their affiliated writers based on the frequency and range that their works are publicly performed.

While slightly complex, this truly is the best system in order to straddle the line of encouraging works to be used, but honoring copyright law. In any case, no one has really come up with a better system.

Problems arise, however, in an increasingly inter-connected and globalized world, where once a song is created (particularly, once it’s uploaded to the Internet) attempting to corral it within the borders of any one particular country is, of course, impossible. Thus, the question frequently and justifiably arises: “How do I, a U.S. writer, get paid my public performance royalties when my song gets broadcast in another country?” This article attempts to answer this question.

Foreign Public Performance Royalties
As the vast majority of U.S.-based songwriters are affiliated with one of the above-referenced PROs (and if you’re not you should really consider doing so), I’m going to work off the premise that the real question is: “Can ASCAP (or BMI, SESAC) collect my international public performance money?”

The Berne Convention
In order to answer this question, we must take a very brief detour to the land of international copyright law. It’s easy to think, given all the recent Internet-related conversation about copyright, that it’s a new issue, but the reality is that we’ve been wrestling with copyright basically since people started creating things and copying them; the Statute of Anne was the first copyright act, and it was put in place in Great Britain, in 1709!

Roughly two-hundred years after The Statute of Anne, as international travel (and thus, the dissemination of works created in one country into other countries) increased, The Berne Convention for the Protection of Literary and Artistic Works (typically referred to as, The Berne Convention) was put into place in 1886. In short, the countries that have signed The Berne Convention (and nearly all industrialized countries have) must honor copyrights created by authors from other countries in the same way they recognize copyright in its own country.
For example, if you’re a U.S. author, and register your work in the U.S., but your work ends up getting exploited (sold, broadcast, etc.) in Spain (a Berne signatory, and thus a member of the so-called Berne Union), you enjoy the same amount of copyright protection as if you were a Spanish author with a Spanish copyright. While there are variants from country to country, for the most part the copyright laws that exist in the US are consistent with those in Berne Union countries.

Relationships between U.S. and Foreign PROs
Given the above, you can begin to imagine how reciprocal relationships between U.S. PROs and their equivalents in other countries might work. In essence, U.S. PROs license the works of their affiliated (i.e. U.S.) writers to the equivalent PROs in other countries, and these countries license their works back through ASCAP, BMI, and/or SESAC. The foreign PROs thus collect on behalf of the US writers and remit this collection to the U.S.-based PROs, who then pay out to their affiliated writers.

Of course, the devil is in the details, and there are some details to be aware of. First, you must question whether or not the local PROs are accurately reporting your usages to ASCAP, and, related, collecting the proper amount. This becomes a very real question when you factor in the fact that the U.S. is the only industrialized country that does not pay a public performance royalty to the copyright holder of the sound recording (typically, the label). Because of this, many foreign PROs refuse to enter into one-to-one reciprocal relationships with the U.S. because they (justifiably) feel that their (i.e. non U.S.) artists are not being fully compensated due to the U.S.’s refusal to pay a public performance royalty to the master holders/performers for terrestrial broadcast. Thus, these foreign PROs do not pay U.S.-based writers.
Additionally, there are so-called “at source” issues. As you can imagine, there are costs all along the value-chain with respect to collecting and disseminating these royalties, and the more intermediaries between the broadcasters who are paying the fees and the copyright holders who are owed the money, the greater the chance that the money will be reduced.
Because of both of the issues above (lack of true reciprocity of payment and diminished income due to multiple intermediaries) some writers deem it a good strategy to enter into sub-publishing arrangements with publishers who are based in foreign countries, and grant these sub publishers the right to collect public performance money on their behalf.
Alternatively, if you’re a qualifying writer (and what determines if you are “qualified” or not varies from country to country, but, as you can imagine, it always involves your works being exploited in these foreign countries with some frequency), you can affiliate with foreign PROs even while continuing to be affiliated with a U.S.-based PRO. However, as you can imagine, the U.S.-based PROs do not want you to do this (it cuts into their revenue), and thus may not make it an easy process for you.

Summary
As we can see, while there are mechanisms in place for the licensing and collection of your works in foreign countries, actually setting up the best strategy to ensure the maximum amount of benefit when your works are publicly performed is decidedly a non-trivial matter. That said, this is where we are in the music business today, and it will be the artists (and their teams) who work through these complexities in order to generate the maximum amount of revenue from their works who will be best positioned to sustain their artistic career on their own terms over the long haul.
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George Howard is the former president of Rykodisc. He currently advises numerous entertainment and non-entertainment firms and individuals. Additionally, he is the Executive Editor of Artists House Music and is a Professor and Executive in Residence in the college of Business Administration at Loyola, New Orleans. He is most easily found on Twitter at: twitter.com/gah650