The hospitality industry is searching for options to find common ground with PROs so that music creators are compensated for their creative works and small business can grow.

 

Mission and Values

FMLC’s mission is to make the music licensing system simpler, fairer and more transparent for small businesses.

FMLC members are small business owners who need to make everyday decisions about how they operate their establishments. When analyzing their costs for music, they want to know:

o   what music products they are paying for,

o   how fees are calculated, and

o   if their music licensing fees are proportional to the amount of music they play.

The current music licensing system is enabled by the Copyright Act and it is not achieving its intended purpose. FMLC members value music and identify with the idea that creative artists need to be paid for their creative works. However, the current Copyright Act enables performance rights organizations (PROs), like ASCAP, BMI and SESAC, to take advantage of their market positions over the industry’s smallest stakeholders.

The FMLC seeks to modernize the music licensing system so that creative artists are fairly compensated for their works and small businesses can make informed decisions about what music they use.


Background

The Copyright Act of 1976 serves as the bedrock upon which the music industry has been built. It provides the music industry the intellectual property rights to capitalize on creative works. It grants certain exclusive rights to the owner of a copyrighted work, which are different from those enjoyed by a mere owner of a copy of the work. The exclusive performance right allows the copyright holder to control the public performance of certain copyrighted works. A performance is considered “public” when the work is “performed in a place open to the public or at a place where a substantial number of persons outside of a normal circle of a family and its social acquaintances are gathered.”


On its face, the public performance right is implicated when a restaurant or bar plays copyrighted music over its speaker system to its customers from the radio, television or from an iPod or CD. While listening to music on the radio or on an iPod privately will not ordinarily constitute copyright infringement, it is the public performance aspect of using music in a business environment that is the basis for the need for permission from a songwriter or publisher.


the Fairness in Music Licensing Act of 1998 - WE'VE BEEN HERE BEFORE

Sonny & Cher, 1973

Sonny & Cher, 1973

The work of the National Licensed Beverage Association (NLBA) helped result in the passage of the Fairness in Music Licensing Act of 1998 (FMLA) and the Sonny Bono Copyright Term Extension Act. The FMLA clarified the “Homstyle Exemption”, which allows bars, cafes, and restaurants, to play the radio and show television programming, but do not authorize the playing of recorded music.

More specifically, small restaurants (under 2,000 sq./ft.) and bars (under 3,750 sq./ft.), playing only radio or television, not charging cover and aren't using more than six speakers are exempt from music licensing fees, while playing recorded music (like music from an iTunes collection), live cover band performances, jukeboxes and internet radio (like Pandora, Spotify and Apple’s iTunes Radio) don’t fall under the FMLA exemption.

Congressman Sonny Bono (CA-44)

Congressman Sonny Bono (CA-44)

Each year, PROs provide bar and restaurant owners with a “take-it-or-leave-it” proposition: pay higher rates for the music played in your establishment or face costly litigation. Despite the difficult economic conditions businesses in the hospitality industry have faced, each year bar and restaurant owners agree to the raising music licensing costs.