Who Pays? The ASCAP, BMI & SESAC Conundrum

Who knew the song “Happy Birthday” wasn’t in the public domain? And what are those rights fees that show up in a settlement all about anyway?

Members of the “Who Pays?” panel tackled these questions and more in an attempt to demystify the world of rights organizations and pin down where all those fees end up.

For starters, “Happy Birthday” is owned by ASCAP. And, to put it simply, promoters or venues must pay rights fees to the three major organizations that represent the writers, composers and authors of music – ASCAP, SESAC and BMI – when they book an artist for a public performance.

Not many artists are doing it all on their own, and the people who help create the music “deserve fair compensation for the public performance of their works,” ASCAP’s Allen Alexander said. “The live performances are a source of real revenue for our members.”

Madeline Schilder of AEG Live echoed that sentiment.

“You have to remember that the artist actually doesn’t always own all the music and all the rights to the music that they play at the show,” she said. “Someone might write the words, someone might have arranged the music. The performing rights organizations represent all of the people that have those rights – not just the artist that happens to be performing it that day.”

According to federal law, if you want to perform someone’s music, you need to get prior permission from them, and that’s where ASCAP, SESAC and BMI come in.

“We are a service,” BMI’s Brian Philbin said. “Without us, everyone would still need to get that permission directly from the person who owns the rights to the music.”

But with a blanket license agreement, a promoter or venue can pay an annual fee, which covers them to use the music that each of the catalogs represent, he added.

So who pays the fees, then? Venue Solutions Group’s Russ Simons wondered where the responsibilities lie.

“If you’re doing a show with a promoter, a vast majority belong to the North American Concert Promoters’ Association, and the association has a blanket license with all of these organizations,” Schilder answered. “They’re covered and they have a license for all the shows they do at your building and they’ll pay the fees and report the show.”

Moderator John Scheck of the Pepsi Center was pleasantly surprised by the news, noting small buildings that often work with non-NACPA promoters or self-promote might find the organization to be a good resource.

“If somebody’s doing enough events as a building person, I might recommend that they join the association,” he said.
The times when a building co-promotes a show or promotes entirely on its own may require a little more work on the part of the venue, but SESAC’s Robert Pauley said rights organizations are always willing to take phone calls and clear things up.

“None of the people that work with us are bad people. Call them, ask questions,” he said. “You can learn what is the right way so that you’re not overpaying or paying double for something. From SESAC’s perspective, we only want to collect once for each performance. If the promoter has license for that show, we’re not going to license the venue.”

Rights organizations track the top 300 touring artists to collect fees. Often, they’ll contact venues or artists and ask for setlists in order to compensate the owners of the music. Philbin said that for BMI, “92 cents of every dollar we collect goes back out the door to people whose music you’re getting permission and licensed to use.”

And knowing that might make paying those fees seem a little less brutal.

“We probably as an industry haven’t done a good job of reaching out to these organizations who by all accounts would be happy to meet with building people and help them understand what’s in these fees,” Simons said. “My advice to everybody is that if it’s a part of your business you have a responsibility and an obligation to know more about it.”

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