ASCAP turns up the heat on music venue licensing <br> <i>24 lawsuits filed against bars, clubs, restaurants</i>

It may cost patrons $5 to see a cover band at a local bar. But if the venue isn’t licensed properly, that show could cost it its business.
The American Society of Composers, Authors and Publishers filed 24 lawsuits late last year in 11 states (none in Rhode Island) alleging copyright infringement by nightclubs, bars and restaurants due to unauthorized performance of music for which ASCAP clients own the rights.
The potential cost for the performances – which could include a live cover, a DJ or even playing a homemade mix-CD – depends on a judge’s ruling, between $750 and $30,000 per song.
Restaurants and bars contacted for this story refused to comment or did not return phone calls. Even AS220, which long has prohibited the performance of covers on its stage – except those in the public domain – because it refuses to work with licensing agencies, declined to comment on its policies.
But Dale Venturini, president and CEO of the Rhode Island Hospitality and Tourism Association, said the issue of music licensing is crucial to all of her organization’s members that play music in a manner that enhances their business. That goes for clubs that host karaoke nights or restaurants that play music as background ambiance for patrons.
“A lot of people think you have to pay these fees only if you play live music,” Venturini said. “If you play anything other than a small home radio that doesn’t have speakers hooked up to it, you have to pay the fees.”
The association offers its members discounted licenses to Broadcast Music Inc., the publishing company that represents nearly half of the music compositions in the industry. Other than BMI, restaurants could pay fees to ASCAP, which represents the second-largest block of publishing rights, and SESAC, a company that represents mostly international compositions but only represents about 3 percent of U.S.
songwriters.
According to BMI spokesman Jerry Bailey, the organization functions as a nonprofit set up to track performances of songs, whether it is on the radio or television, or played at a bar or hotel. The idea is to track royalties owed to songwriters, who would be unable to monitor every time their songs are played.
About 87 percent of the license fee collections at BMI go directly to the songwriters, he said.
BMI does offer licenses of varying prices to different types of establishments, Bailey said. The amount an establishment pays depends on the capacity, the types of performance of music and how much revenue is derived from the use of music at the business.
“If you’re only operating a small restaurant and you’re only playing CDs in the background, your fees are substantially lower than if you’re operating a nightclub and you have live bands several nights per week,” Bailey said.
If a restaurant or business owner doesn’t want to pay the fees to BMI, ASCAP or SESAC, there are other options. XM Satellite Radio and Sirius Satellite Radio, the two largest providers in the relatively new medium of satellite radio, offer packages to businesses, Bailey said.
In turn, those companies pay fees to three publishers.
For the hospitality association, Venturini said that the organization uses Muzak for its call-waiting music. Muzak – which gained a reputation for producing soft rock instrumentals of popular hits for commercial use but transitioned into a provider of actual songs for commercial use – saves the association from the headache of determining what publishing company is licensing what song.
“We would have to pay three different companies otherwise,” Venturini said.
However, there are the cases when a business refuses to pay the publishing companies or the commercial providers such as Muzak.
BMI recently sued a Pennsylvania bar for hosting a cover band despite never having received a license. In that case, Bailey said that the company had tried working with the owner for an extended period of time – calling him 47 times and sending 21 letters to the business – before deciding to take action.
Before the company does proceed with any legal claims against a business owner, it will send a researcher who goes in undercover to document BMI songs being played.
“We spent several years trying to work with that business owner, but that business owner simply refused to license,” Bailey said.
“Eventually, we sent a researcher in to verify what we already suspected.”