Songwriters generate royalties when their songs are publicly played. This form of income is known as performance rights royalties and they are collected when a song in performed live at a concert or has been broadcasted on the radio, TV, etc.
Any songwriter who is receiving performance rights royalties is registered with a performing rights organization (PRO). These organizations were created to track and collect the royalties from listeners, and then distribute the funds to the songwriters and publishers.
The major PROS in the United States include Sound Exchange, ASCAP, BMI and SESAC . Sound Exchange collects digital performance royalties on services like Pandora or Spotify. Songwriters apply to be members of the performance rights societies to be sure they are being properly compensated for their work.
How PROs get Paid
Any outlet that plays music in a public setting is required to have a license to do so. While this includes obvious outlets like radio stations and music venues, it also includes public settings like amusement parks, bars, airports and hospitals. The license is purchased from a PRO, which is then paid out as a performance rights royalty to the associated songwriter and publishing company.
Performing Periods and Payments
ASCAP, BMI and SESAC pay their members on a quarterly basis. According to the Sound Exchange payment schedule, Sound Exchange distributes payments to their member either monthly or quarterly – mostly depending on whether the payment is distributed through ACH (automated clearing house) or via check. Sound Exchange started offering monthly payments in 2014 after recognizing that “sooner really is better.”
The following are the performance period and payment distribution schedules for ASCAP, BMI and SESAC:
ASCAP:
| PERFORMANCE PERIOD | PAYMENT |
| January-March | October |
| April-June | January (following year) |
| July-September | April (following year) |
| October-December | July (following year) |
SESAC (Domestic Royalty Payments):
| PERFORMANCE PERIOD | PAYMENT |
| January-March | June 30 |
| April-June | September 20 |
| July-September | December 31 |
| October-December | March 31 (following year) |
BMI:
| PERFORMANCE PERIOD | PAYMENT |
| January-Match | September |
| April-June | January (following year) |
| July-September | March (following year) |
| October-December | June (following year) |
Advances on Royalty Payments
Unfortunately, new and emerging songwriters don’t have the luxury of waiting on quarterly payments from their PRO – especially when bills are due or an unexpected expense occurs. Getting an advance on royalty financing payments could be the ideal solution for songwriters who need their money now.
Interested in a Music Royalty Advance?
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