How the SESAC Dispute Highlights the Role of Performing Rights Organizations in the Music Industry

Knowing how Performing Rights Organizations (PROs) operate is key to understanding how musicians earn royalties and how businesses and platforms legally use music. In September 2024, fans of artists like Kendrick Lamar, J. Cole, and Young Thug found their favorite music videos pulled from YouTube. These removals were prompted by a contract dispute between YouTube and SESAC, a PRO that represents many prominent songwriters and publishers. This dispute had far-reaching implications as videos featuring artists not directly affiliated with SESAC, such as Nicki Minaj and Beyoncé, were affected if SESAC-represented creators contributed to the content.

The videos in question could have been posted by the artists themselves or by platforms like Vevo, depending on who owns the copyright. While it is not YouTube’s job to monitor every piece of content, the platform can face significant copyright infringement penalties for hosting unlicensed music. To avoid such liability, YouTube removed the videos during the dispute. Fortunately, the dispute was resolved quickly, with SESAC announcing a renewed licensing agreement to ensure fair compensation for its affiliates.

This incident highlights the crucial role PROs play in the music industry, particularly in managing copyrights and royalties for artists.

What Are PROs?

PROs are organizations that represent the copyrighted works of songwriters, composers, and music publishers. Artists in the United States usually have one PRO represent them but may have others represent them internationally. Most counties have at least one PRO to manage music rights locally. In the United States, there are three main PROs: ASCAP, BMI, and SESAC. A PROs primary role is to grant licenses to businesses, such as restaurants, hotels, retail stores, to play artists' music. These licenses grant blanket authorization to use all the music within the PRO’s catalog, which includes songs by various artists, in exchange for a licensing fee.

Once fees are collected from the licensees, the PRO distributes them as royalties to its affiliated songwriters and publishers. This system ensures compliance with U.S. Copyright Law, which mandates prior authorization for public performances of copyrighted music. For licensees, it simplifies the complex process of obtaining permission from individual copyright holders for each song they use.

The SESAC and YouTube Dispute

The YouTube-SESAC contract dispute demonstrates the importance of obtaining and maintaining a licensing agreement. When agreements lapse, it can result in the removal of copyrighted works from platforms, affecting creators, collaborators, and fans. SESAC’s catalog includes works by many influential artists, meaning its licensing terms can impact a significant portion of the music industry.

Without a valid license, businesses risk infringing on federal copyright laws, which carry hefty penalties ranging from $750 to $150,000 per unlicensed song.

Why Are PROs Important for Musicians and Businesses?

For musicians and songwriters, PROs ensure creators are paid when their works are used commercially, providing a steady stream of income from royalties. This is especially critical in an era where digital streaming platforms and public performances dominate music consumption.

Each PRO operates independently and represents a unique catalog of music. In the United States, SESAC, ASCAP and BMI cover almost all copyrighted songs. Businesses seeking full compliance often need licenses from all three organizations to avoid copyright infringement. While this may seem inconvenient, it is a far simpler process than negotiating with individual rights holders.

Conclusion

The SESAC-YouTube resolution emphasizes the need for fair agreements and compliance with PROs. For artists and songwriters, PROs ensure fair compensation, safeguarding the value of creative work. For businesses and platforms, securing the proper licenses is not just a legal requirement but also a means of respecting and supporting the sustainability of the creative industries. For fans, the return of their favorite music videos highlights the complex system of rights and licensing that enables them to enjoy their favorite music across various platforms and spaces.

Sources

•  A beginner’s guide to performing rights organizations (PROs), splice, Jan. 19, 2023, https://splice.com/blog/performing-rights-organizations-guide/#:~:text=How%20do%20PROs%20pay%20artists,the%20most%20sense%20for%20you.

• Marc Griffin, Videos by Kendrick Lamar, J. Cole, and More Pulled from YouTube Amid SESAC Dispute, Vibe, Sep. 30, 2024, https://www.vibe.com/news/business/kendrick-lamar-j-cole-videos-pulled-youtube-sesac-dispute-1234927432/#.

• Murray Stassen, YouTube Strikes Deal with SESAC, Begins Reinstating Music Videos by Adele, Kendrick Lamar and More Following Licensing Dispute, Music Business Worldwide, Sep. 30, 2024, https://www.musicbusinessworldwide.com/youtube-strikes-deal-with-sesac-begins-reinstating-music-videos-by-adele-kendrick-lamar-and-others-following-licensing-dispute/.

• Soundcharts Team, What Performance Rights Organizations Do: How a PRO Can Maximize Your Royalties, Jan. 28, 2020, https://soundcharts.com/blog/performance-rights-organizations#what-is-a-performing-rights-organization.