Radio station royalties

Long time lurker, first time poster.

How are artists or labels compensated for radio play? It’s my understanding that the radio stations compile playlists that are then submitted to ASCAP, who then determine who gets what. The radio stations pay something like a nickel a song and it’s up to ASCAP to divide the money among the label and the artist. Is that right?

There are also a couple of other organizations that license some of the songs you hear: BMI (Broadcast Music International) and SESAC (could somebody please help me on that one?)

BMI came into being IIRC back in the early 1940s when ASCAP raised their royalty rates. A lot of radio stations told them to sit and spin and went with BMI and public-domain music (it was popularly called “the era of Jeannie with the Light Brown Hair” because that song’s copyright had lapsed and the stations beat that song to death, much like today’s stations do with NStync.)

This was also the era of the musicians’ strike, too.

Yes, that’s about it, although there may be sampling of playlists involved. In Australia at least, the performance fee varies according to listenership. As an occasional recipient of such payments, I should add: hoorah.

Generally, the radio station pays an annual fee. The fee for such a blanket license is determined by the number of listeners (See for amounts).

The fees are divided up by determining frequency of airplay. Here’s what ASCAP says:

Radio stations used to keep logs of all songs played; I don’t know if this is still in effect, but I’d suspect so. Stations probably keep a computerized list of songs going on the air and send it to ASCAP, which uses it to distribute the money.

As a side note to this, it isn’t only Radio Stations that are supposed to pay the royalty fees. Professional Disc Jockeys (wedding, parties, etc.), bars with juke boxes, and even large stores that playthe radio are supposed to pay the fees.

What happens if you don’t pay? Well, a friend of mine manages a bar and he says he has NEVER paid them though he does get a bill from either ASCAP or BMI (I can’t remember which) every three months. No one has ever called him or even sent a threatening letter to him.