While all six of these elements may come into play in the production of a film or video project, it is the performance right that is of overwhelming importance in the public transmission of television programming. In the United States (and elsewhere through agreements with reciprocal agencies), three licensing organizations administer performance rights for virtually all musical compositions still under copyright. These three organizations are the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Incorporated (BMI), and the much smaller SESAC (formerly, the Society of European Stage Authors and Composers).

ASCAP, the oldest of the three, was born of a 1913 restaurant meeting of composer Victor Herbert and eight publisher and composer associates who sought some mechanism to ensure that they would be paid for the public performance of their work. ASCAP began licensing broadcast stations to play the music of its member composers and publishers in 1923, when it signed a one-year $500 license with AT&T’s WEAF (New York). Perceiving themselves to be at ASCAP’s mercy when it came to the use of music in their programming, broadcasters formed the National Association of Broadcasters (NAB) to negotiate with ASCAP on behalf of the entire radio industry. (The NAB subsequently became U.S. commercial broadcasting’s major trade association and lobbying agency.)

BMI was created by the broadcast industry in 1940 in reaction to what stations perceived to be a large and unjustified increase in ASCAP’s licensing rates. Until BMI could build its own catalog, many stations that had refused to renew their ASCAP licenses could play nothing but tunes by Stephen Foster and other vintage music no longer under copyright. BMI soon signed affiliation agreements with Latin American, country, western, “race music” (black), and later rock-and-roll composers—musical genres that ASCAP had largely ignored.

SESAC was founded in 1931 by music publishing executive Paul Heinecke, with a catalog consisting primarily of European concert and operatic music. SESAC later dropped its full name in favor of the acronym and expanded its scope to encompass concert band, gospel, religious, and country music, opening a major office in Nashville, Tennessee, in 1964. SESAC is the only one of the three performance-rights organizations also to administer the mechanical and synchronization rights on behalf of its member composers and publishers.

Virtually from its inception, radio performance-rights licensing was accommodated via a “blanket license.” Stations paid the rights agency an annual fee based on either gross receipts (ASCAP and BMI) or market size, power, and hours of operation (SESAC). This license allowed the stations to play as much of the licensing organization’s music as they wished. This same business arrangement subsequently was extended to the new medium of television. As in radio, television-station rate negotiations with ASCAP and BMI are handled by an all-industry committee supported by voluntary station contributions. Because far less SESAC music is played on television, the dollars that organization receives are much lower, and stations deal with it separately.

Since 1950, the broadcast television networks have secured their own blanket licenses for the music in the programming and commercials they distribute to their affiliates. Even if they are network affiliates, stations still have needed their own blanket licenses to cover the music included in the syndicated series, local programs, and nonnetwork commercials they air. Since 1970, broadcasters have fought a number of legal battles in an attempt to reduce overlapping license coverage and bring greater flexibility and economy to the performance-rights clearance process. In 1970 the Columbia Broadcasting System (CBS) initiated an antitrust suit against ASCAP and BMI in order to secure the option of a “per use” alternative to the blanket license. However, in 1981, the U.S. Supreme Court reaffirmed the dismissal of the case. Four years later, television stations lost a similar skirmish over “per program” rates that tended to make this option far more costly than the blanket license.

Nevertheless, new licensing alternatives began to emerge. Following a series of legal maneuvers, ASCAP/BMI and television broadcasters began, in 1987, to negotiate a more economically realistic perprogram license option. Six years and several judicial proceedings later, the parties had substantially agreed to a feasible per-program license structure. This paved the way for stations more actively to purchase or lease their own music libraries for use in local productions and commercials—thus greatly shortening the list of programs for which they would have to pay an ASCAP or BMI fee. At the same time, major program syndicators such as King World began selling stations the rights to the music contained in their series for a small additional fee. Such “source cleared” deals are expected to become more and more common as stations seek to further reduce their ASCAP and BMI per-program payments. Meanwhile, in a 1992 cable television decision, the Supreme Court affirmed the right of cable networks to obtain the same blanket “through to the viewer” license that had been available to the broadcast networks since 1950. This greatly lessened the performance-rights liability of cable system operators. As a result of negotiations between the National Cable Television Association Music License Committee and the three performance-rights holders, local cable systems can now obtain blanket licenses to cover music used on local-origination channels as well as in locally inserted commercials and promotional announcements.

Local broadcast station blanket rates for ASCAP are determined through negotiations with the broadcasters’ Television Music License Committee. An industry-wide flat fee is set in these negotiations. This fee is divided among all defined television markets according to market size. The market fee, in turn, is spread among stations in that market on the basis of the household ratings achieved by each. Annual adjustments are made on the basis of changes in the consumer price index and number of stations in each area. BMI and SESAC fees follow a similar pattern and, essentially, are indexed to the ASCAP-negotiated figure.

An additional simmering controversy involves musicians and some recording companies. These interests sporadically have lobbied Congress to enact legislation that would require an additional performance-rights fee to be paid to the performers of a piece of music. The television industry counters that performers already have been compensated through existing rights mechanisms and have handsomely profited from the exposure with which television has provided them.