Many musicians may not realize it, but every time they perform live, the venue hosting the event is required to pay fees for any cover music played. These fees are mandated by Performance Royalty Organizations (PROs) such as the American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC. While these organizations aim to ensure fair compensation for music creators, there are growing concerns about their impact on small businesses that sporadically host live entertainment.
The Purpose of PROs
PROs were established to safeguard the intellectual property rights of music creators, ensuring they receive compensation whenever their music is publicly performed. These organizations collect licensing fees from businesses and organizations that use music in their establishments, such as restaurants, bars, clubs, and live music venues. These fees are then distributed to the songwriters, composers, and publishers based on various factors like the frequency of performances and the size of the audience. They represent millions of musical works and serve as intermediaries between music creators and businesses that use music in their operations. Their role is not only to collect and distribute royalties but also to monitor public performances, enforce licensing agreements, and advocate for the rights of their members.
And for the record, I like that idea. I love the idea that hardworking songwriters are reimbursed for their talents. However, in my experience, none of the great songwriters I know have made a dime unless they manually enter in a performance. Let’s be real, there are no PROs in the crowd writing on a notepad the songs that are being performed, and therefore there is no accountability towards who should get paid. There is nobody checking… period. I’m not all that smart, but if there is nobody checking, how does the money get distributed properly? It doesn’t. BMI has recently provided an online option for performers to account for performances of their material, which seems like a start in the right direction. However, I’ve personally already seen this abused by an individual in the community that didn’t even have a song and said they performed at one of our locations. BMI paid them because there is no accountability. This means that now there is another level of fraud on the horizon taking away from songwriters. It’s just bad.
Hurting Small Businesses? And More Importantly, Musicians?
While the mission of PROs is to ensure fair compensation for music creators, the fees and licensing requirements they impose can present challenges for small businesses, particularly those with limited resources that host live entertainment only occasionally. Rather than options to pay the statutory rates per song performed by the artists, a yearly fee is created based on factors of the size of the business, if people dance, how many TVs, do they have karaoke?, how about a jukebox?, dance floor?, total capacity… etc. Each one of those factors will determine the amount the venue will need to pay. Mind you, not just one, but several PROs. Sure, it’s the cost of doing business, however, when you are dealing with spending thousands so you can have a guy or gal play an acoustic on a Thursday night, small businesses start to wonder if live music is worth the expense. There are actually venues which now stipulate if you report to the PROs, you are not invited to play (just heard that last night… CRAZY!)
Furthermore, understanding and complying with the licensing requirements set forth by PROs can be complex and time-consuming for small business owners. The process often involves navigating through a maze of legal jargon and paperwork, which can be overwhelming for those without legal expertise or dedicated administrative staff. Failure to obtain the necessary licenses or comply with PRO regulations can expose small businesses to legal risks, including lawsuits and financial penalties. PROs are like a mafia and aggressively pursue businesses that use music without proper authorization, regardless of whether the infringement was intentional or inadvertent. This in itself is enough to scare venues into not doing live music. It’s no joke, check out the articles below.
- BMI sues Mississippi nightclub over music licensing. Owner calls fees legal ‘extortion.’
- Old Town bar is being sued for playing ‘Fat Bottomed Girls,’ other popular songs
- ASCAP goes after Meadowlark Bar for $27,000 in music copyright lawsuit
- ASCAP Levels Lawsuit Against Sixth Street Music Venue the Nook
So here is my concern. If the amount of money being paid to PROs is not reimbursed somehow through the live music being performed, venues will stop doing live music. If the PRO’s continue to use threat tactics to venues, this encourages the decline of live music. All in all, these things impacts the musician’s ability to have a job as well as the songwriter’s ability to make money when live music is no longer affordable. Everyone loses.
I suppose that’s the cost of doing business with live music and if it were not already bad enough for bands and musicians, expect a “fee” to be taken from the band in the future. I could easily see a venue trying to offset the payment of the band with some sort of fee.. which doesn’t sound good to me as a musician, or maybe the venue just can’t afford to pay as much because of the fees.
I don’t know what the future holds, but I’m not a fan of the money grab with zero accountability and the money not going to the right people. Not a fan of fees based on the full potential capacity…etc. I think Congress should look into this a bit deeper and maybe rewrite some of the rules regarding the abstract fees.
The other frustrating thing is most venues don’t pay it; they just ignore it and hope to not get sued. I can’t in good faith do that, but likely the venue you are supporting with live music does not pay any licensing. If you are a songwriter and want to be on the side of the PROs, you probably shouldn’t be playing those places, but who am I kidding, this stuff only matters when money comes out of your pocket. LOL.
Rant over.