THE VALUE OF A SPIN… $0.0000955 PER LISTENER, TO SONGWRITERS ON US
RADIO IN 2014
Now that ASCAP and BMI have revealed their revenues for 2014, and we have some data on SESAC (thanks to Moody’s), we can estimate the value of a Spin, per listener, to Songwriters from performances on US Radio, in 2014.
The estimates that follow are based upon figures that have been publicly released by a variety of sources (e.g., ASCAP, BMI, RAB, Arbitron, Nielsen) as well as my own estimates within these sources. And so, to the extent that these sources and my adjustments are correct, this estimate should be as close as plausible.
Importantly, I have shown my work, so please feel free to come to your own conclusion.
The Short Story
Given 2014 reported revenues, combined with audience and listening statistics, it would seem that the per performance, per listener value of the Spin on US Radio in 2014 would hover somewhere around:
$0.0000955… for the songwriter/composers/lyricists $0.0000955… for the publisher(s) $0.0000281… for the PRO (average across ASCAP/BMI/SESAC) or $0.000219 <- in Total for Songwriters, Publishers, and PRO
Importantly, since performing artists, musicians, and labels are not paid for performance on Radio in the US, the figure above describes only those payments made to or received by songwriters and composers.
Small numbers can be tough, but the above means that Songwriters receive about 1/10 of 1/10 of 1/10 of a penny for each performance, per listener, on US Radio.
Or, approximately $95.50 for a performance to 1,000,000 listeners.
The Long Story
$177,432.445 <- Estimate of ASCAP collections from US Radio* $171,854,300 <- Estimate of BMI collections from US Radio** $32,013,800 <- Estimate of SESAC collections from US Radio***
(A) $381,300,545 <- Estimate of Total PRO collections from US Radio
243,451,000 <- number of US Radio “active listeners,” weekly (Arbitron/RAB)
13.40 <- Number of listener hours (average) per week (RADAR/RAB, Nielsen) 52 <- Number of weeks per year 10.25 <- Number of songs per hour****
(B) 1,738,775,732,200 <- Estimate of Total number of unique performances
$0.000219 <- Value per Spin, per Listener for each performance (B /A)
Since the PRO takes some percentage of this value as Administrative fees, and these fees average around 12.85% between ASCAP and BMI, then about $0.000028 per performance, per listener, goes toward Administrative Fees paid to PROs (i.e., ASCAP, BMI, SESAC).
Publishers, afforded 50% of the payments, post fees, would earn $0.0000955.
While Songwriters (i.e., composers and lyricists) would earn the remaining 50%, or approximately $0.0000955 per performance, per listener.
Importantly, this oranges-to-oranges comparison is something not even the PROs themselves prefer to do. For example, BMI states that 98% of its monitored performances come from the internet, while 2% come from Radio—a discrepancy that results from the organization considering a performance to thousands,or millions, of people on the Radio (apples) as equivalent to a performance to a single person, or account, on the internet (oranges).
**BMI is less transparent than ASCAP. When it comes to numbers, BMI releases only top-line revenue/distribution figures, and seems most excited about percentage increases in their Twitter, Instagram, and YouTube followers. And so, this estimate is a function of simply multiplying BMI’s top-line revenue ($977 million) by that proportion of ASCAP’s top-line revenue that can be attributed to Radio (17.59%).
***SESAC, being a private, for-profit company, is the least transparent of the US PROs. And so, this estimate simply takes a percentage of of total collections attributable to Radio, similar to that experienced by ASCAP, and multiplies it by Moody’s estimate of SESAC’s total collections in 2014 ($182,000,000).
**** Estimating the number of songs played per hour on US Radio appears to be a mix of Art and Science. 10.5 assumes about 40 minutes of music per hour, with songs that are just under 4 minutes in length.