Money in Music Copyright - Part 3: Performance Rights

Performance rights (or "performing rights") is the "right to perform music in public," as opposed to private performance, which is to be "within a normal circle of family and friends" (see Wikipedia's definition of "performing rights").

Potentially, performance rights fees can be a huge source of passive income for very good music composers (if rules are followed).

Remember Paul, our fictitious music composer? He just wrote a song that is a hit in the listening public, right? The ideal story for Paul with respect to performance rights fees will be as follows:

GMA7 and ABS-CBN outdo each other to play Paul's song! One of them really hyped Paul's song up such that the other had to back off a bit. Part of the huge performance rights fee that GMA7 and ABS-CBN pays for all the songs they broadcast will now go to Paul.

In the same breath, SM, Ayala, Robinsons and other malls in the country pays performance rights fees to play Paul's song in their establishments to please their mall goers.

In fact, anyone who plays Paul's song in public is required by law to pay performance rights fee to the music composers or publishers. These include fastfood restaurants (such as Jollibee and McDonalds, among many others), convenience stores (7-11, MiniStop, etc), hotels and stores.

Even Churches should pay performance rights fee for the songs they sing in worship (see this!). 

Music performers pay performance rights fees. Remember Mr. Singer? He's the guy who sang Paul's song in the album produced by Mr. A-Producer. Even Mr. Singer will have to pay Paul a portion of his revenues from the concerts he makes as performance rights fee.

Get it?

Radio stations too are paying performance rights fees. I am aware of sentiments among radio stations against this. They say they are the ones who has made Paul's song popular! Why should they pay for a service they themselves provide? My only suggestion here is, why don't these radio stations approach Congress to amend the law?

Some people tell me, that their friends tell them, that the radio stations in the Philippines are the ones charging the music producers for the play time of the songs they promote. Then, someone told me, that her friend asked her why we Filipinos trust the radio stations when they say a song is #1.

No comment!

Now, Paul may be asking, "How on earth am I going to collect from all these music users?" Excellent question, isn't it?

Performance societies do that job. Paul has to seek membership with FILSCAP or the Filipino Society of Composers, Authors and Publishers. These are they guys who diligently collect performance rights fee from the music users I mentioned, and then distribute the collection to the music composers.

The distribution is according to a particular formula, which I am not privy to. Theoretically at least, the distribution is according to the number of times a song is played within any given period. For instance, if Paul's songs are played twice as much within the year than, say, John's songs, then Paul should get twice the share of John.

Ideally, everytime FILSCAP collects from the music users, each payment has an accompanying document that lists down the songs played by the mall, hotel, store, or restaurant during a given period. This document is the basis for distributing the money. I don't know if this is actually happening, but I pray that this is actually happening.

FILSCAP charges a certain percent of all collections for its operations. It has a staff that does all the work, and FILSCAP members must pay for the salaries of these staff. I have no idea at this time how much in terms of percentage goes to operation. Their US counterpart charges around 15%.

The responsibility on FILSCAP to collect performance rights fees is not a joke. I personally appreciate the voluminous work involved in tracking the usage of tens of thousands of songs. I pray they decide to automate, but the capital investment for this kind of endeavor can be overwhelming.

The least we can ask from FILSCAP is to be more transparent about its revenues and distribution schemes. I have seen their annual report once, and I simply thought they can do better than that.

Nonetheless, the Philippines still has FILSCAP, and FILSCAP is still the best bet that our music composers can get their rightful share of the performance rights fees that change hands every year.