U.S. Government Inspects Performance Rights Organizations Over Copyright Concerns
- 13 February 2025, Thursday
The US government is currently investigating Performance Rights Organizations (PROs) to address concerns about the financial and administrative impact on licensees, royalty distribution practices, and transparency. This inquiry aims to improve the efficiency and fairness of the licensing process, with particular focus on how these changes could affect independent artists and smaller publishers.
PROs in the United States: the current situation
Performance Rights Organizations (PROs) make sure that songwriters and publishers get paid whenever their music is played publicly—whether on the radio, in a restaurant, or at a live show. Organizations like ASCAP, BMI, or SESAC track performances, collect royalties, and distribute payments with the intention to compensate artists for their work.
As Music Business Worldwide explains, most countries possess one or more designated organizations that handle music royalties, each operating within its own legal and industry framework. In the United States, things look a bit differently. Besides its traditional, major PROs ASCAP, BMI, and SESAC, the country is also home to three newer organizations, GMR, Pro Music Rights, and AllTrack.
These organizations were partly out of digitalization and technological progress. For instance, AllTrack positions itself as a more modern, digital-friendly alternative that caters to independent artists. This makes the US somewhat of an exception. Additionally, while ASCAP operates as a non-profit, most U.S. PROs function as for-profit businesses, meaning that they compete with each other for clients and revenue.
For independent artists, the rise in PROs and potential gaps in royalty distribution could lead to more complexity and higher costs in managing their music rights. These challenges may disproportionately affect smaller or lesser-known artists, making it harder for them to secure fair compensation and navigate the licensing system.
U.S. Copyright Office inspects national PROs
This context has motivated the U.S. Copyright Office to look into potential issues related to performance rights organizations within the country. In an official notice, it explains that it is “initiating this inquiry at Congress's request to gather information on questions related to the increase in the number of PROs and the licensing revenue distribution practices of PROs.”
The request is related to reports from venues, which say they have received “demands for royalties from new entities claiming to represent songwriters, and threatening litigation if the demands are not met. (...) [c]onsidering that the possibility of substantial statutory copyright damages poses an existential risk for most bars, restaurants, and other small businesses, many feel compelled to pay these entities on top of what they already pay for blanket licenses from the traditional PROs.”
For this reason, the Copyright Office wants to know whether new PROs have increased financial and administrative costs for licensees, assess the overall impact on the licensing process, and receive recommendations from PROs regarding how they tackle clarity and certainty for entities seeking licenses to publicly perform protected music.
On top of that, the Office wants to better understand how PROs gather information on where and how works are performed publicly, whether lesser-known artists and smaller publishers are negatively affected by their current practices, and what information PROs make available to the public.
Finally, it asks whether “any gaps or discrepancies occur in royalty distributions, including situations where performance data may be unavailable or incomplete, and where PROs must rely on proxy or survey data for royalty distributions,” as well as how the current system could be improved with technology. The intention behind these questions is rooted in the concern that smaller artists may be unfairly and inaccurately compensated compared to established ones.
You can read the entire notice of inquiry on the official website of the federal register.
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