Setlist Licensing: The Live Performance Royalty Obligation Most Independent Artists Don't Know Exists

When an independent artist performs a cover song at a venue, the copyright holder of that song is theoretically entitled to a performance royalty. That royalty is collected not from the artist but from the venue. Venues that host live music are supposed to hold blanket licenses from performing rights organizations, primarily ASCAP, BMI, and SESAC, that authorize the public performance of any song in those organizations' catalogs.

In practice, the system does not work perfectly. Many smaller venues do not hold proper blanket licenses. Some venues hold licenses from some PROs but not others. And most artists performing covers have no idea whether the venue where they are playing has the appropriate licensing in place.

What Blanket Licenses Cover

A blanket license from ASCAP, for example, authorizes a venue to allow the public performance of any song in the ASCAP catalog, which includes hundreds of millions of compositions. The venue pays ASCAP an annual fee based on its capacity, admission charges, and the proportion of its programming that includes live music. ASCAP distributes the resulting pool to songwriters and publishers based on performance data.

BMI operates similarly. SESAC, which is a for-profit PRO, operates with a different licensing model but serves the same function.

An artist who performs an ASCAP-registered cover at a venue with a valid ASCAP blanket license is operating within the licensed framework. The songwriter receives their share of ASCAP's distribution. The venue has its liability covered. The artist has no direct royalty obligation.

An artist who performs the same cover at a venue without a blanket license is in a more complicated position: the venue is technically infringing the copyright, and theoretically the artist is as well, though enforcement actions against performing artists rather than venues are rare.

What Independent Artists Should Know

For independent artists who perform original material primarily, the blanket license question matters primarily when they include covers in their setlists. The practical guidance is straightforward: ask venue operators whether they hold blanket licenses before accepting a booking at venues where the licensing status is uncertain.

For venues that book live music, the licensing obligation is their responsibility, not the performing artist's. But artists who develop relationships with venues benefit from understanding the framework.

The more consequential licensing obligation for independent artists is ensuring their own original material is registered with their PRO so that when it is performed publicly (at their own shows, at festivals, or by other artists), the performance royalties are tracked and distributed to them.

The Setlist Data Gap

A persistent problem in live performance royalty distribution is data: PROs need to know what songs were performed at which venues to accurately distribute performance royalties. Smaller venues rarely report setlist data to PROs. Large venues and festivals typically have reporting obligations built into their blanket license agreements.

That data gap means that performance royalties for independent artists performing at small venues often go undistributed to the appropriate songwriters. The money exists in the pool but cannot be allocated without accurate performance data.

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Building the Business Infrastructure Before You Need It

The most common error independent artists make in the business side of their careers is waiting until they have a commercial success before building the infrastructure to support one. The registration with PROs, the publishing administration, the accounting systems, the legal entity for the label, the distribution agreements, the touring documentation: all of these should be in place before the record that requires them arrives.

That preparation is not bureaucratic overhead. It is the condition that allows commercial success to translate into commercial benefit. An artist whose song breaks through without having registered their publishing rights is losing money in real time. An artist whose live performance revenues are not being tracked and documented is building a career without the financial documentation that future business relationships will require.

Operations like Mollohan Production Inc. work with artists on exactly this preparation, not because the business side is more important than the creative side, but because the creative work is wasted if the business infrastructure is not ready to capture its value.

FAQ

What is a blanket license? A blanket license from a performing rights organization (ASCAP, BMI, or SESAC) authorizes a venue to allow the public performance of any song in that organization's catalog. The venue pays an annual fee, and the PRO distributes the resulting pool to registered songwriters.

Who is responsible for venue licensing? Venues that host live music are responsible for obtaining blanket licenses from the performing rights organizations. The performing artist is not directly responsible for the venue's licensing compliance.

Does performing original songs require different licensing? Performing original songs that are registered with a PRO generates performance royalties that flow to the songwriter through the PRO's distribution system, provided the venue has appropriate licensing and the performance data is reported.

What happens when artists perform at unlicensed venues? At unlicensed venues, the songwriters whose works are performed do not receive the performance royalties they are owed. Enforcement actions by PROs typically target venues rather than performing artists, but the legal framework does extend to performers in theory.

How does setlist data affect royalty distribution? PROs need accurate setlist data from venues to distribute performance royalties correctly. Smaller venues rarely report this data, creating a gap in royalty distribution for independent artists performing at those venues. Large venues and festivals typically have reporting obligations built into their blanket license terms.