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When you listen to a song on the radio or online, someone is keeping track of what's being played. Performing rights organizations do that to make sure songwriters and music publishers get paid. BMI is one of the big organizations that does this. The other is ASCAP, which turns 100 today. And in its old age, it's getting extra scrutiny for how it collects royalties in this digital world. NPR's Laura Sydell explains.
LAURA SYDELL, BYLINE: You may have heard this song.
(SOUNDBITE OF SONG, "GONE, GONE, GONE")
PHILLIP PHILLIPS: (Singing) When life leaves you high and dry, I'll be at your door tonight if you need help.
SYDELL: "Gone, Gone, Gone," which is sung here by "American Idol" winner Phillip Phillips, was co-written by Gregg Wattenberg. The song went to the top of the charts and that meant big bucks for Wattenberg.
GREGG WATTENBERG: U.S.-only hit songs could generate - when I say hit, I mean like top five, not like number 20 - can generate anywhere from one to $2 million in ASCAP monies.
SYDELL: A lot of that comes from radio play. But ASCAP got its start 100 years ago collecting performance royalties from dance halls and other live music venues. It still does. Any public place that plays live or recorded music from a club to a football stadium pays a licensing fee. The amount varies depending on its size, hours, popularity. The same is true for radio stations and online music streaming services like Pandora. Wattenberg says ASCAP pays him a percentage of the fees it collects based on how many times his song gets played.
WATTENBERG: ASCAP tracks all those plays, gives a credit to your name. And a credit with the stadium people is worth X per play. A credit with CBS is a different credit. And it sums it all up and you get a statement and you get a check.
SYDELL: But songwriters whose music hasn't hit the top of the Billboard charts have long said that the ASCAP system isn't as transparent as Wattenberg makes it sound.
(SOUNDBITE OF MUSIC)
SYDELL: Guitarist and composer Harvey Reid says he makes a full time living from his music, although he's never had a song top the charts. Most of Reid's income comes from performances and album sales, not royalties, though he does get radio play on smaller stations. He says the way ASCAP tracks radio play is biased.
HARVEY REID: They're more likely to sample radio stations that have higher listenerships, so it's statistically rigged.
SYDELL: Reid was so fed up with ASCAP he actually switched over to the other performing rights organization, BMI. But he says they both seem to distribute money the same way.
REID: I've made 30-some recordings that have been played on radio in this country for over 30 years, and I've probably made a couple thousand dollars from the performing rights organizations, which is probably not accurate. And there's lots of people like me.
SYDELL: However, Reid and Wattenberg say they've both seen the newest category of royalties grow a little in the past few years. The money comes from streaming services like Pandora and Spotify. ASCAP is an organization with a long history of litigation to make sure every new outlet pays songwriters and their publishers. Most recently, it's been in court fighting with the online radio service Pandora. Grammy and Oscar-winning songwriter Paul Williams is president of ASCAP, and he likens this moment to the early days of cable.
PAUL WILLIAMS: Where we first began to collect for our composers for their films that were shown on cable and television shows on cable, there was very, very small royalty involved. At this point, it's perhaps our largest single source of income to our writers is cable.
SYDELL: Last year, ASCAP documented more than 250 billion plays and song performances and paid out over $850 million in royalties. But the ability to easily track plays online has some ASCAP members wondering if they need the organization. A number of music publishers, including Sony and BMG, tried to pull out of ASCAP when it came to licensing rights for digital streaming.
But a judge ruled that the blanket licensing agreement ASCAP had negotiated with music publishers covers all media - traditional and digital - and cannot be divided up. Casey Rae is the interim executive director of the Future of Music Coalition, a non-profit that lobbies on behalf of musicians. He says ASCAP has a distinct advantage.
CASEY RAE: I, for one, think it would be very, very difficult to create an institution to go around to every single venue in the United States of America and then establish reciprocal agreements overseas and so on and so forth.
SYDELL: However, Rae agrees that lesser-known songwriters have good reason to be frustrated with ASCAP's accounting and ways of tracking plays. But in the digital era, every time a listener hits play on whatever device, it's possible to track it. ASCAP president Paul Williams say the organization is trying to adapt.
WILLIAMS: We're not at a hundred percent yet, but we're moving in that direction where we can keep track of and properly pay for every performance.
SYDELL: And in a world where more artists are recording, publishing and distributing their music without labels, Williams thinks ASCAP and other performing rights organizations will only become more important. Laura Sydell, NPR News.