ASCAP, BMI, GMR and SESAC are the three performing rights organizations (PROs) that were created as clearinghouses between the creators and owners of copyrighted music and the people who want to publicly perform or play this music. Most songwriters, composers, lyricists and music publishers join one of these organizations and the organizations then collect and distribute fees on their behalf. Think of the music you play as the product created by composers and owned by music publishers. Copyright laws require that you obtain advance permission to play their music (or use their product). Royalties are the compensation that composers and publishers are entitled to. All three companies explain that over 80 percent of fees collected are distributed to the copyright owners. Because it would be virtually impossible for a restaurant owner to negotiate separate licenses with the copyright owners (composers or publishers), blanket agreements with these companies allow restaurant owners to play music from the companies’ repertories.
Some alternatives might include the following:
- Attempt to negotiate separate licenses with the copyright owners for each piece of music you want to use (not really a reasonable option).
- Limit the music performed to works in the public domain (difficult to determine).
- Use a jukebox, but remember that you must have a Jukebox License Agreement from the Jukebox License Office. You would still need licensing agreements with the PROs if you charge admission, if the jukebox is activated in any way other than through coin operation, or if other music is played in addition to the jukebox.
- Use a commercial music service like Sirius XM, Muzak or DMX. They pay the licensing fees for you, but you would still be responsible for any other music played which is not supplied by the commercial music service.
- Play only radio or television if you meet the exemptions outlined later in this article.
The companies will ask how music is played in your establishment, how often it is played, and the occupancy of your business. Some of the questions asked when calculating the fee: Do you play live music? Is it performed by multiple singers or a single singer? Do you play recorded music—CDs, tapes, records, jukebox, DJs, karaoke, or video tapes? Do you charge admission or a cover? Is there dancing to live or recorded music? Do you play tv or radio?
Each organization represents different songwriters, composers, music publishers and copyright holders. Subsequently they license only the works from their copyright holders. For example, a license with ASCAP does not give you the authorization to play music in BMI, GMR or SESAC’s repertory. You can’t assume that you are only playing music from one company.
The law states that the owner of the establishment where the music is being played is responsible for obtaining the required authorization. Paying a band or DJ doesn’t mean you have satisfied this requirement.
When you play any copyrighted music in your restaurant without proper authorization you are breaking the law. If you are caught, the fines you face can be much higher than the cost of the licenses. Infringers of copyright law are subject to a civil suit in federal court with damages ranging as high as $100,000 for each song performed without proper authorization. If you are found to have infringed on a copyright for commercial advantage or private gain, you face criminal sanctions.
The price you pay for streaming services, like Pandora, only covers the right for you to listen privately to the music. When you play streaming music, tapes, CDs or any other personally purchased music in public it becomes a “public performance.” The copyright owners of the music have the exclusive rights to public performances.
Possible exemptions include the following:
- If your restaurant is 3,750 square feet (including the kitchen, storage areas, bathrooms, etc., but excluding the parking lot) or smaller, you do not have to pay royalty fees for playing radio and television music.
- Restaurants over 3,750 square feet may be exempt from fees if they have four or fewer televisions (no more than one per room, diagonal screen sizes of 55 inches or smaller) and six or fewer speakers (no more than four per room).
Members of WRA are entitled to special savings of up to 20% on BMI Music Licensing for eating and drinking establishments. This program provides the following discounts for each individually licensed restaurant member.
- 5% discount on BMI licensing fees just for being a member
- 5% association online discount on licensing for being a member and paying @ www.bmi.com/ede
- 10% timely payment discount for paying your fee in full within 30 days of invoice
Contact BMI at 800.925.8451 for more information.