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Pubs and PROs: Making Sure Your Live Gig is Properly Licensed

A couple of weeks ago, a friend of mine called to pick my brain about music licensing. She lives in an old town in the Hudson Valley that has a burgeoning music and arts scene. She’s a jazz singer and, possessing an entrepreneurial bent, she produced a series of live jazz concerts at a local restaurant. Given that her day job is in publicity and marketing, it wasn’t surprising the performances were well attended — and well received. Everyone, my friend, the performers, the restaurant owner and the patrons, seemed happy.

Then my friend told me that the restaurant started getting phone calls and letters from the three performing rights organizations (PROs), ASCAP, BMI and SESAC. For the uninitiated, PROs license the right of public performance in copyrighted (i.e., non-public domain) musical works, a right granted under the US Copyright Act. More specifically, they license “non-dramatic” rights, so musicals, operas, ballets and other “dramatic” works aren’t works that the PROs license (although individual songs from such works often are – yes, this can get complicated). PROs license radio and TV stations, web sites, arenas, concert halls, nightclubs and, more to the point, bars, restaurants and other similar establishments where music is performed. While there are certain exemptions for having to pay for using recorded music under very limited circumstances, where a restaurant or bar is playing live music, the PRO piper must be paid.

Now, the three PROs each do the same thing, albeit in slightly different ways and some songwriters will prefer one over the others. Think of them as Ford, Chevy and Dodge. They issue “blanket” licenses to licensees, such as a restaurant or club, which entitles the licensee to play any or all of the songs in that PRO’s repertoire however often it likes, all for a set fee based upon the establishment’s music usage. It’s kind of like buying a ticket to an all-you-can eat buffet. But, the key is no one PRO has a majority of the popular repertoire in any genre, so a venue frequently has to take a license from all three of them. But that’s still way more efficient than trying to get individual licenses from the owners of dozens, if not hundreds, of songs.

As an aside, my friend mentioned that one of the musicians said that he was a member of ASCAP and that therefore he could perform all the music that ASCAP licenses, kind of a gratis blanket license. I said that wasn’t quite correct. The PROs obtain “non-exclusive” rights from their members. So, if a musician is performing his own songs, he can do so freely without the venue having to take a license. But, that doesn’t mean he can license public performances of songs by Jerome Kern, Thelonious Monk, or Bob Dylan, writers, represented by ASCAP, BMI and SESAC, respectively.

As someone who once was a legal beagle at BMI as a card-carrying member of the “copyright police” who would prosecute infringement actions against venues that performed music – and it was always live music we went after and only after numerous attempts to get the owners to take a license– I know that the staffs at the PROs are doing their best to collect the public performance royalties the songwriters are entitled to under federal law so that they can earn a living, pay their bills and continue to write the music we want to hear.

My friend said that even though the owner was happy to have the live music, he didn’t want to pay for the licenses. I suggested that they have a cover charge, a portion of which would go to the owner to pay for the licenses over time, and the rest to the performers. She said that neither she nor the owner wanted to do that as many patrons simply wanted to have a meal and might go elsewhere if there were a music charge. I then suggested that she continue to do what she’s done (as is common in many clubs) that instead of a cover charge, she passes the hat around to the patrons who make voluntary contributions to the musicians but, as with a cover charge, a certain percentage would go to the restaurant off the top to pay for the licenses over time and the rest would go to the musicians.

In fact, I suggested that this could even be a selling point in that she make a short announcement, including a suggested donation amount, stressing that they’re doing the right thing to ensure that not only the performers of the music, but the people who wrote the music, get paid their due. She thought it was a great idea. Unfortunately, the restaurant owner didn’t. So, when I followed up about a week after making my brilliant suggestion, my friend said that she was going to stop being an impresario for the time being.

That made me sad. The PROs want music to be performed. They’re not in the business of saying “no,” but the writers they represent are entitled by law to be paid. So, it’s a major bummer when musicians lose a gig because the owner doesn’t want to pay the freight. But what can my enterprising friend do?

Here’s one possibility: There are lots of venues, bars, clubs, etc. that regularly perform live music and have licenses from the PROs. That’s a sunk cost for them. She might find a venue where they don’t have music at a particular time (e.g., 6pm as most shows don’t start until 9pm) or a night such as a Sunday or Monday when the place is silent. Maybe the atmosphere won’t be ideal, but the owner can maximize the value of the license it’s already paying for (although the fees are somewhat calculated based upon how many nights the venue has live music).

The venue might also see it as an opportunity to experiment with other genres, such as an early set of jazz and standards at a place that typically plays covers of classic rock or country and thereby increase its customer base. Because the PROs want their licensees to get maximum value for their license fees (so that they’ll continue to pay and have music), the General Licensing departments of the PROs could actually be a resource to suggest venues for that kind of situation.

I’m curious to know if any of you have any other suggestions for my friend. And if you’re curious about how and why ASCAP, BMI and SESAC license bars, restaurants and clubs (what they refer to as “General Licensing”), please click here, here and here. And you might also read my post about how the CEOs of the PROs feel about upcoming challenges and opportunities for their business.