The Business of Commercials!! 235City. Local offices handle all work within their jurisdiction but are gov-
erned by the rules of the national office. Union scale (minimum payment)
differs depending on the type of work and the area of the country.
Members pay an initiation fee to join the union and then pay yearly
dues plus work dues, which are based on a percentage of each payment
received through the union. A percentage of all monies collected goes to
the international office. For work performed under the Commercial
Announcements Agreement, additional payments are due every 13-week
cycle for the life of the commercial. Sometimes the same music used on
the original spot(s) is dubbed into new commercials. In this event, each
musician on the original session is entitled to additional payments.
Members receive pension benefits and are able to participate in addi-
tional benefits if they choose.
Performing-Rights Organizations: BMI, ASCAP,
SESAC, and SoundExchangeAirplay of commercials generates performance royalties. Not all agencies
allow composers to collect performance royalties. Most advertising agen-
cies and their clients own the publishing rights to compositions written
for their commercials; the writers’ contracts are work-for-hire agreements,
which means that composers assign their rights to the agency/client.
Broadcast Music Incorporated (BMI)
The following information is a quotation from the BMI website (www
.bmi.com/home.asp):
BMI is an American performing rights organization that represents
approximately 300,000 songwriters, composers and music publishers in all
genres of music. The non-profit-making company, founded in 1940, col-
lects license fees on behalf of those American creators it represents, as well
as thousands of creators from around the world who choose BMI for rep-
resentation in the United States. The license fees BMI collects for the ‘‘pub-
lic performances’’ of its repertoire of approximately 4.5 million
compositions—including radio airplay, broadcast and cable television car-
riage, Internet and live and recorded performances by all other users of
music—are then distributed as royalties to the writers, composers and
copyright holders it represents.
If a composer of a commercial is a member of BMI and the agency/
client is willing to pay performance royalties, the commercial must be reg-
istered with BMI. BMI collects and distributes performance royalty
income.