There is a bit of strategy involved with affiliating with a performing rights organization in the United States. All the societies have a creative staff. The decision to affiliate with a particular society should be made after the artist/writer has taken some meetings with the performing rights society and decided if there’s more love coming from one than another.
Most of the time we like to wait until the music is fairly well formed and the band has gelled into a working unit before approaching the societies unless there’s a reason to move more quickly, such as getting a film or TV license, or substantial radio/webcasting play. In more experienced bands, the writers will already have an affiliation, so it is a good idea to know this in advance for purposes of servicing the creative staff with new music, competing for slots on compilations and festival shows, etc.
The major U.S. performing rights societies are the American Society of Composers, Authors and Publishers (http://www.ascap.com/), Broadcast Music, Inc. (http://www.bmi.com/), the Society of European Stage Authors and Composers (http://www.sesac.com/) and Global Music Rights (http://www.globalmusicrights.com).
There are, of course, payment differences among the societies. For detailed background we recommend reading Music, Money and Success by Jeff and Todd Brabec.
A recent case highlights the competitive nature of the U.S. PROs. In order to understand the issue in the case of Shane McAnally, you need to know a little bit about how PROs divide up the revenue they receive. With few exceptions, ASCAP and BMI license music users on a revenue share basis and receives various reports of song usage. Realize that unless the PROs don’t divide these license fees on an even pro-rata share. Instead they use a formula based on a weighting and credit formula. This includes something called the “Audio Feature Premium Credit” which is a kind of bonus. In a nutshell, and I’m sure they’d argue about this, but the bottom line is that the more successful you are, the more money you get paid because you are more successful:
Audio Feature Premium Credits (AFP – for audio performances only, where applicable): Songs that earn certain threshold numbers of audio feature credits in a quarter receive additional credits in that quarter. These credits are applied to performances on radio, satellite and audio streaming services.
There’s a certain logic to this–as one Nashville musician/songwriter asked me years ago about mechanical royalties, “if I get double scale for a session, why can’t I get double stat for a song” (meaning twice the statutory mechanical royalty rate). That ain’t crazy particularly given the sad state of mechanical royalties.
Shane McAnally left ASCAP to join Global Music Rights, or tried to. As reported in Music Business Worldwide:
Due to internal rules regarding exiting songwriter members, ASCAP continued to license McAnally’s catalog to US radio for two and a half years following his resignation. Yet, according to McAnally (pictured), ASCAP declined to pay him full quarterly bonuses (‘Audio Feature Premiums’) from his biggest hits after he left – despite his co-writers of said songs (and remaining ASCAP members) receiving their share of this extra money.
McAnally’s payments were apparently ‘phased out’ by ASCAP, who paid the writer 100% of his AFP bonus for the first quarter after he left the PRO, but then 75% in the second quarter, 50% in the third quarter, 25% in the fourth quarter – and 0% from then on.
Important: McAnally alleged that this ‘phase-out’ deprived him of $204,612.84 in ASCAP distributions as of his January 2016 accounting statements.
McAnally appealed his case through the rather Kafka-esque appeals process and ultimately prevailed. His case is a cautionary tale of how difficult and costly it can be to change PROs. The full ruling of the arbitrators is here.