Arizona Update: Paying for the music: Local bars, musicians open up about copyright fees - The Prescott Daily Courier

February 28, 2016
2/28/2016 6:01:00 AM

Jason Wheeler
The Daily Courier

Take a walk down Whiskey Row any given night and inevitably, there will be music coming from at least one bar. 

There's a lot of music that's played in Prescott bars, clubs and restaurants and not all of it is original to the performing band. Most people enjoy hearing covers of popular music, but what most don't realize is that there are fees venue owners must pay regarding these cover songs to licensing organizations such as the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc. (BMI) and SESAC. These organizations represent numerous songwriters, composers and music publishers and collect licensing fees from businesses that use music from their represented musicians. 

The amount a venue owner pays in licensing fees is based on a number of factors, said ASCAP Head of Licensing Vincent Candilora. One factor is the approximate size of the audience that may hear the work being performed, he said. 

"For clubs, venues, restaurants, bars, what we do is use the occupancy posted by the fire code, Candilora said. 

"It's a good number in the sense that we don't set that number, the establishment doesn't set that number. The number is easily available. I could very easily say to you 'can you go over and take a picture of your fire code and email it to me so I have verification of the size of the establishment."

Other factors include how often music is played at an establishment and whether or not the music is recorded, live, via DJ or karaoke, BMI Executive Director of Corporate Communications & Media Relations Jodie Thomas wrote in an email. Using a venue with an occupancy of 100 that plays music three nights or less per week without a cover charge as an example, the licensing fee would be about $491 per year, Candilora said. If there is a cover charge, that would mean an additional $198, which comes out to $689 per year, which is $1.88 per day, he explained. As for BMI, licensing fees could be as low as $350 per year, Thomas wrote. Money collected from the fees goes to the musicians as well as the organizations' overhead. ASCAP sends out about 88 cents in royalty distributions per every dollar collected and BMI sends out about 87 cents per dollar. 

However, a license with one organization allows the performance of only the copyrighted music represented by that specific organization, according to the BMI licensing page. In order to have music in an establishment that is licensed by different organizations, a venue owner must pay for separate licenses from the various organizations. Robert Kolar, general manager of The Point Bar & Lounge, paid about $2,000 for a license to play music licensed by ASCAP and BMI, two years for one organization and one year for another. 

"If I played Pandora for business only, then I could get out of it because they have a license through all those entities," Kolar said. "But because I have live music and most likely those live musicians are going to play cover tunes, there's really no way I'm getting out of it." 

If ASCAP or BMI find out that a venue is presenting licensed music to patrons without having paid the licensing fee, the venue could be sued for violating copyright. According to United States Copyright Law, authors own the exclusive rights to their compositions as they are the authors' intellectual property. While music may be sold, transferred or inherited, music and lyrics under copyright protection cannot be reproduced, distributed for free, no profit or profit, performed in public, played via recording in public even if the CD is owned or have a derivative work or arrangement for public use made from them, according to the Public Domain Information Project website, In the last 15 years, hundreds of venues have been sued by the organizations, including Trunk Space in Phoenix and Whiskey Rose in Glendale, which was sued for $90,000. A business owner who chooses to play copyrighted music in their venue must have a music license, Thomas wrote. 

However, neither ASCAP nor BMI immediately file lawsuits. Candilora explained there are multiple steps between getting in touch with a venue and filing a lawsuit. When a new bar opens, the organization goes to the establishment and explains who ASCAP is, its library of music and how the fees are derived. Then follow-up phone calls start. If those go unanswered, a licensing manager will be sent out to the venue to see if there are any questions. BMI also spends a lot of time educating business owners about the value of music and the importance of having a license. Legal action is only used as a last resort, Thomas wrote, adding that sometimes years are spent trying to educate business owners. 

"If we encounter a business that isn't licensed, we work hard to explain the need for a music license and why songwriters are entitled to be paid, and often rely on such payments in order to continue to make a living," Thomas wrote. 

From the other side of the bar

Venue owners don't see themselves as being educated by the organizations. They see themselves as being harassed. Kolar said he was getting calls every day and Jana Harris, owner of Big Easy Bar said BMI started calling her every day after moving locations, including doing so during the winter when the bar isn't open. She was told that even playing music from an iPod off a stereo speaker still required a licensing fee, but that it was fine if the music came from DirecTV's music channels. Last year, Harris started getting calls from ASCAP at least once a week, she said. 

"I'm a small venue, I get maybe five people here on a weekend. I can't afford to pay their fees when I have musicians in here playing and I'm the only one that's listening," Harris said. "I haven't been sued yet, but they've threatened to sue." 

It seems that allegedly the organizations don't always make their presence known as Kolar and Harris say they've had undercover agents from the licensing companies posing as customers on nights with live music. Local musician Wes Williams, of the Wes Williams Band, also said he's been told about undercover agents being sent to venues who haven't paid the fees. 

People come into the Big Easy Bar all the time trying to catch something, Harris said. She mentioned people from the liquor board and health department as well and brought up one Thursday night during set up for the night's Karaoke and open mic. 

"They came in early, he was setting up. I knew they were spies because of what they were saying ... they're throwing all this stuff at me that I know for a fact are lies, but I don't know who they're from. They start asking Dylan all these questions about what kind of music he plays, how often he plays, what he does and all this kind of stuff," Harris said, adding that they ordered a drink, walked around, heard what was being played and left and the day after, she got a call claiming to have "documented what we were playing, the times we were playing and I need to pay." 

Candilora denied that ASCAP sends undercover agents, stating that all ASCAP licensing representatives are salaried employees, wear photo ID and identify themselves as being from the organization. People anonymously going in to establishments are not ASCAP representatives, he said. 

Williams said that from his point of view, it's harassment as well which, when coupled with the fees are part of what causes the little bar and venue owners to go out of business. On one hand, Williams said he understands as he's all for the correct compensation. However, pushing venue owners to the point of being terrified doesn't do any good, he said.

It's creating a Catch-22 said local musician Christian Berry. Musicians are getting gigs and then asked if they could play all original music when it used to be that the venue owners didn't want only original music because often people would leave, he said. Now, they ask for all originals because they don't want to be hassled, Barry said. 

"It's gotten to the point where every local musician has been affected," Berry said. 

Harris confirmed Barry's point, noting she tries to have the musicians at the Big Easy Bar play as much of their original music as possible. While the bar is a great place for musicians to experiment, it's still hard since customers want to hear cover songs, she said. 

In a separate email, Berry called the method employed by the organizations the "shoot myself in the foot" method, noting that when he lived in Los Angeles, the whole idea was to have as many people hear your music as possible. 

"That was how songwriters became successful," Berry said, adding that he became a musician because he heard his favorite bands and learned to play like them. He said he "never would have become a songwriter without that exposure." 

More than that, with the little guys starting out playing covers, it makes who is being covered more famous as people ask where those songs are from, Berry said, adding that it's all part of "paying your dues." 

When it comes down to it, an organization like ASCAP is trying to fulfill its obligation to its songwriters when their music is played, Candilora said. But something else to consider was their obligation to licensees to make sure they're not at a competitive disadvantage, he said. 

"We're going to contact the establishment across the street that isn't paying. Once we contact an establishment that's continuing to use our members' music, we don't go away, we can't stop calling them. That's our obligation," Candilora said. "It's kind of unfortunate that club owners tend to use an excuse that they can't afford to pay the fees when in fact they can certainly pay the fees if there are people coming to the establishment and buying their beers and other services to listen to the music. That comes down to the quality of the group and the type of music that's being played."