Once a year, in May, ACUM conducts a major royalties distribution that comes mostly from public performance - music played in public venues.
Since this is one of the largest income sources for creators in Israel, we'll explain in depth how public performance royalties are distributed at ACUM.
ACUM collects royalties from three main public performance sources:
- Music in businesses - cafes, restaurants, bars, clubs, malls, gyms, municipalities and more.
- Live performances - This is the easiest to calculate. There's a performance, there's a lineup, and one or more of the organizers, producer, venue etc. are responsible for reporting the lineup and transferring payment. Performance royalties are specific to each performance and distributed according to the reported lineup.
- Celebration events - Over 60,000 weddings, bar mitzvahs and other celebrations take place annually in Israel, with thousands of songs played. If we could monitor every venue, we'd know exactly what was played and when, but that's not yet feasible.
How Does ACUM Distribute the Money?
ACUM collects royalties from cafes, malls, municipalities, events and more. Annually this involves tens of thousands of songs. The royalties collected aren't for specific uses of individual works, but for use of many works without businesses reporting exactly what they played.
This means that in most cases there's no precise information about what was played in each business or at each event.
To understand ACUM's distribution model, you need to know two concepts: repertoire and usage coefficient.
Repertoire is a group of works with a common denominator. It consists of lists of thousands of works. Currently there are about 15 types of repertoires, with the two main ones in public performance distribution being Celebration Events repertoire and Businesses repertoire.
All songs are attributed to performances in various businesses across the country. Over the years, Israeli culture and public music consumption change, requiring addition of smaller but significant repertoires - such as sing-along, folk dance, electronic music, children's songs, Greek music and more.
The authority to add, change or remove repertoires lies with ACUM's Board of Directors.
Importantly, one song can appear in multiple repertoires depending on its popularity. For example, a song can rank in the top 10 of the Music Providers repertoire, at position 67 in Hotel Radio repertoire, and at position 70 in TV repertoire. Royalties will come from all these repertoires according to the song's popularity level.
How Is Song Popularity Determined?
Usage coefficient is a metric that reflects a song's popularity level within each repertoire. Ultimately, next to each work and repertoire appears the song's usage coefficient - where it ranks within that repertoire.
The method of determining usage coefficient varies between repertoires. For the Businesses repertoire, to distribute royalties fairly and logically, the song list is composed of weighted data from radio and TV plays during that year, plus digital platforms - YouTube, Spotify, Apple Music etc.
This weighting also includes karaoke play data and playlists received from music providers to businesses. This data is combined and translated into a usage coefficient assigned to each work in the Businesses repertoire.
In the Celebration Events repertoire, DJs directly report to ACUM actual plays from about 2,000 events annually. From this real data, a list of the 100 most-played works that year is compiled.
Meet the experts: dozens of professionals submit to ACUM twice yearly their estimated lists of most-played songs at celebration events. They rank them 1-10 by popularity level.
They don't know each other, cannot be ACUM members or relatives of members, undergo careful selection and rotate every three years - all to maintain maximum objectivity.
After weighting expert rankings together with DJs' real play reports, the usage coefficient is determined for each work in the Celebration Events repertoire.
For other repertoires, similar processes are performed, ultimately resulting in song lists with popularity levels for each repertoire.
This sounds complex, and it truly is, mainly taking time. Businesses pay annual royalties to ACUM, so only after year-end do we know how much was collected total and what songs were played that year.
Besides Israeli songs, we also hear foreign music, so royalties are divided between us and creators abroad.
The third and final distribution stage is allocating received royalties to various repertoires. Royalties from each source are attributed to relevant repertoire types.
For example, royalties from restaurants and cafes are mostly attributed to the Businesses repertoire, but also to Celebration Events repertoire.
Royalties from music you dance to at weddings or family events are all attributed to Celebration Events repertoire.
Royalties from municipalities are attributed to multiple repertoires: sing-along, folk dance, holidays, ceremonies, celebrations and more.
Ultimately, under each repertoire type, royalties accumulate from all collection sources and are distributed according to the work lists within each repertoire and their usage coefficients.
Public performance distribution differs from broadcast royalties. If my song plays on radio today at noon, I'll receive specific money attributed to that broadcast from the broadcasting corporation, based on actual plays - because every play is reported.
Public performance distribution is more complex than other royalties sources, because it involves royalties collected from thousands of different businesses and events, for many songs.
Since public performance is based on collecting from thousands of entities, gathering and distributing royalties accurately is somewhat complex and takes time.
The distribution is for the entire calendar year, reflecting usage during that year. Therefore it's done in May for the previous year.
All processes are computerized, involving weighting, decoding and data processing, checked multiple times both computationally and manually. All distributions are ultimately approved by ACUM's Board of Directors.
If you want to learn more, in your personal area on the ACUM website you can find a detailed document with ACUM's complete royalties distribution rules. And of course, if you have questions, always feel free to contact the Members Department.