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Radio Airplay 101 - Performance Royalties from Radio

We are always asked by people releasing their first record, "Will I get BMI/ASCAP royalties if I get airplay?" This question is similar to asking, "If I open a restaurant, will I make money?". While it is the job of BMI/ASCAP/SESAC to pay airplay royalties, it's also the job of restaurant customers to pay their check at the end of their meal. But most new restaurants don't make a profit, and most records pushed to radio don't make more than a few dollars from royalties. Our recommendation: Don't do radio for the purpose of royalties. Do it instead for other reasons... like tour distribution. There are some exceptions (one out of a hundred records do make some money), but you wouldn't open a restaurant if you knew for a fact you only had one chance in a hundred of making it.

The reason that a new indie act will probably not see a check from BMI/ASCAP is that they will not get enough spins on the larger stations. BMI/ASCAP does pay for college spins, but even they state that they pay only about a million dollars a year for all college records. The problem is that there are about a thousand records mailed to college radio EVERY WEEK in this country (not all stations get all records, of course,) so using the very numbers from BMI/ASCAP would show that each record gets $20. But what you don't see is that most of the money goes to less than one percent of all the records... the major label and major indie records... because they get the majority of spins, because of the level of marketing that they do. So the majors get a bit more royalties from college radio ($200 to $500?), and the small indies get nothing.

With commercial radio, there is no comparison... unknown indies make zero royalties in comparison with even midsize indies. If you are a grassroots indie with your first release, don't even waste the energy with BMI/ASCAP... spend your time instead trying to find paying gigs, and sell your CDs there (i.e., tour distribution.)

On the other hand, if you are indeed a midsize indie (meaning your average title scan 50,000, and you have been doing this for at least three years,) with at least good indie distro, and if you are getting newspaper press in at least 50 of the top 100 markets, and if your videos are also airing in these markets, and if your gigs are pulling 100 to 500 paid people to see just your act, and finally... if you have some good low-medium level radio promotion ($50,000 or more) going into your next release, then you will probably get enough airplay to be getting some good sized royalty checks, although probably not enough to pay for your radio promotion.

The point here is that small indies have a certain amount of time they can spend on dealing with different areas of marketing, and BMI/ASCAP issues should not be one of the first things dealt with. By all means use radio, but use it for getting more paid gigs (and more people at those gigs) so that you can make some money each night by selling CDs and merch while you are there. And use radio to get referrals to newspapers/magazines, stores, even labels and managers. Use radio chart results to build your marketing kit. Use non-commercial radio to drive people to your site. Use commercial radio morning shows to showcase crazy tunes and jokes. Just don't try to use radio for royalties.

Next topic: Why Clear Channel is Irrelevant to Indies

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