When Should a Small Business Pay ASCAP or BMI?

Small businesses and licensing fees to performing rights organizations

Small businesses and licensing fees to performing rights organizations

Ganka Hadjipetrova, Esq.

A growing number of small businesses are being unpleasantly surprised with letters from performing rights organizations, such as the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI), with indirect or direct threats of copyright infringement.  The performing rights organizations, or PROs, which manage musical copyrights on behalf of their owners, request that businesses pay a licensing fee for playing in their shops musical recordings from the PROs repertoires.  Small mom and pop stores, for whom legal advice may be prohibitively expensive, must then decide whether to pay the PROs or disregard the letter and possibly face a court action for copyright infringement.  This article focuses on the small business’ risk of incurring copyright liability for playing music in its business space without the rights owners’ authorization and suggests courses of action to minimize that risk.

The brief answer to the question of whether playing musical recordings within a small business’ space amounts to copyright infringement is:

–        “no” for radio and television broadcasts over the air, whether played in public or not; and

–       “possibly yes” for musical recordings played in any other manner, for instance, MP3 files on a computer or free Internet radio, and in public.

The right to perform musical recordings belongs exclusively to the copyright holders.

United States copyright law protects original works of authorship[i] and entitles the authors to a number of exclusive rights.[ii]  The owners of copyrights in sound recordings, for example, have exclusive rights of reproduction, adaptation, distribution, and public performance of the recordings.[iii]  These rights are independent from one another and a waiver of one right does not waive the others.  For example, purchasing a copy of a sound recording only gives reproduction and distribution rights and does not permit the purchaser to further reproduce and distribute the copy or to perform the sound recording in public.  Under the Copyright Act, to perform a sound recording means to play the sound recording directly or by means of any device.[iv]

Thus, a store or other small business playing musical recordings through a playback device or a radio receiver engages in a performance under the terms of the Copyright Act.  Performing the recordings in public therefore creates copyright liability for the business unless such performance is authorized by the copyright owners, fits within a statutory exemption, or falls outside the statutory definition of “public performance.”

The law provides two defenses against claims of infringement of the public performance right.

Assuming that a small business is not authorized to play the recordings, the discussion below analyzes the two potential defenses against a claim of infringement: (1) whether the “homestyle exemption” applies to the situation; and (2) whether the playing of music recordings in the business can be considered a non-public performance.

1)    Section 110(5) exemption (“homestyle exemption”)

Section 110(5) of the Copyright Act provides an exemption for the reception of radio or TV broadcasts in an establishment open to the public for business.[v]  The purpose of the “homestyle” exemption is to release from copyright liability anyone who merely turns on, in a public place, an ordinary radio or television receiving apparatus of a kind commonly sold to members of the public for private use.  The basic rationale of this clause is that the secondary use of the transmission by turning on an ordinary receiver in public is so remote and minimal that no further liability should be imposed.

The exemption only applies to a single radio or television receiving apparatus of the type used in one’s home.  If the broadcast signal is received in an establishment of an area smaller than a certain gross square footage – less than 3,750 square feet for a food service and drinking establishment and less than 2,000 square feet for any other type of business – the law puts no limitation on the number of loudspeakers and TV monitors that may be connected to the receiving apparatus.[vi]  Where the gross area of the business exceeds these minimums, the law imposes limits on the number of loudspeakers and TV monitors as well as on their placement and – in the case of audiovisual monitors – their size.  The device must be relatively small and of limited sound producing capacity.  In addition, the business may not directly charge customers for listening or watching the broadcasts and the signal may not be further transmitted.  The broadcaster itself must be licensed by the Federal Communications Commission.[vii]

The case of playing music on so-called Internet radio (e.g., Pandora) likely falls outside the scope of the homestyle exemption.  The language of the statute expressly limits the exemption to “a radio or television broadcast station licensed as such by the Federal Communications Commission.”  Internet radio transmissions, although seemingly fitting the same logic as radio and TV broadcasts over the air, do not require licensing by the FCC and are thus not squarely covered by the 110(5) exemption.

On the other hand, Pandora and other free Internet radio webcasters are usually licensed by the performing rights societies such as ASCAP and BMI and one could argue that the logic of the “homestyle exemption” should be extended to such radios as well.  This argument, however, has not been tested in court yet and it is not clear whether courts would accept it.  The safest course of action is to avoid playing Internet radio without authorization from the copyright holders.

An alternative to free Internet radio is satellite radio.  In contrast to an Internet radio service such as Pandora, satellite radio subscription for businesses is covered by the homestyle exemption.  SiriusXM for Business is a paid subscription service which handles copyright royalties for businesses.[viii]  Through such a subscription, the business would avoid having to pay licensing fees to the different performing rights organizations.  The business may choose to listen through an internet reception or through a satellite receiver.  It should be noted, however, that the licensing fees for most performing rights organizations amount to an annual sum not substantially different than that charged by satellite radio.  Depending on the negotiated price, a company may be indifferent between paying to one performing rights organization and subscribing to satellite radio.  The advantage of a general license to play that society’s repertoire regardless of the device chosen, e.g., personal computer or another audio system, may be overridden by the need to pay a licensing fee to several PROs, not just to one.

2)    Definition of Public Performance

Another possible defense against a claim for infringement is that the performance of the recordings is not public.  According to the statutory definition, a sound recording is performed publicly when played “at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.”[ix]  Courts have ruled that public performance of musical pieces encompasses the playing of recordings over a stereo system in a business establishment for the entertainment of customers.[x]  Public performance occurs even where the customers are not directly charged for listening to the music.[xi]

The question arises whether the performance is public if the place where the music is played is the staff’s work space to which customers do not have access.  In that case, there would be a strong argument that the performance is not a place open to the public.  This argument may not be applicable to stores where, as is commonly the case with bakeries, for example, the staff’s work space is not fully enclosed but is separated from the customer space by a half-wall sales counter.  Because the enclosure is only partial, the sound from the sound system located in the work space easily travels to the customer space.  As long as the sound is loud enough for the music to be distinguishable to the customers, it may be difficult to argue that the playing of the music is not a public performance.

Conclusion:

Where mom and pop stores play musical recordings, they engage in a performance of copyrighted material under the Copyright Act.  If the music sound is clearly audible in the space designated for customers, the playing most likely infringes the owners’ exclusive public performance rights in the sound recordings.

Possible Courses of Action:

  1. Switch to broadcast radio only.

If the business switches to playing broadcast radio through one homestyle apparatus only, it may do so without risk of any copyright infringement liability.  In the case of a food service and drinking establishment of less than 3,750 gross square feet or of another type of business with an area of less than 2,000 gross square feet, the business may connect any number of loudspeakers or TV monitors to the receiving apparatus.  The loudspeakers and monitors may be located at any place within the business and the adjoining outside space.

        2.   Play music at a reduced volume.

The business may play musical recordings in the staff work space but do so at a low volume so that customers would not be able to hear the music or would hear it at a level that would not meaningfully add to the atmosphere of the customer space.  Where the business has a half-wall or an open-wall counter, the wall may be built higher or into a full wall so as to prevent or decrease the traveling of the sound to the customer areas.

Such a course of action would necessarily involve a certain risk.  It is possible in this case that copyright holders in the music played may choose to sue for infringement of their public performance right.  In a case where the rights owners prevail, the business may be subject to injunctive relief and substantial damages.[xii]  The law allows the owners to sue for either actual damages[xiii] or statutory damages.[xiv]  A performing rights organization would likely sue for statutory damages as it would be difficult to prove actual losses and profits.  The court has discretion to determine the amount of statutory damages in a range between $750 and $30,000 per individual copyrighted work infringed, i.e., for each song played.[xv]  It must be noted, however, that a PRO will likely face challenging proof issues in identifying the pieces infringed.

Although it is unlikely that the PRO will choose the expensive path of litigation, it must be kept in mind that this option is available to them.

       3.   Pay the respective annual PRO license fee.

In view of the potential risks of an infringement lawsuit and the cost associated with litigation, which may run in the tens of thousands of dollars, the better course of action may be to enter into a licensing agreement with the PRO.  It must be noted that businesses always have the option of negotiating a lower fee than asked based on their individual circumstances.  Knowledge of the law in the area would help in such negotiations.

It must be noted that each performing rights organization manages the rights to a separate repertoire of musical works.  To ensure that all music played in its space is authorized, businesses must obtain licenses from all PROs.  Currently there are three PROs – the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC.  ASCAP and BMI control the rights to most musical pieces.  If a business chooses this course of action, it will then face the decision whether to buy licenses from one, two, or all three PROs.  The licensing fees will vary according to the individual circumstances of the business, such as type of business, customer space, and business hours.  Typically, the cost to a small business to obtain an annual license from one of the larger PROs, such as ASCAP, is in the range of 300 to 500 US dollars.

      4.   Do nothing.

Once the business has received a warning letter from a performing rights organization requesting a fee payment, the PRO will continue to keep track of the business and insist on payment.  Failure to respond to the PRO’s letter may lead to a much greater risk of litigation and the business would be ill-advised to follow such a course of action.



[i] Copyright Act of 1976, 17 U.S.C. § 102(a).

[ii] 17 U.S.C. § 106.

[iii] 17 U.S.C. § 106(4).

[iv] See 17 U.S.C. § 101, definition of “perform.”

[v] 17 U.S.C. § 110(5).

[vi] 17 U.S.C. § 110(5)(B)(i)(I) & (ii)(I).

[vii] 17 U.S.C. § 110(5)(B).

[ix] 17 U.S.C. § 101.

[x] See Lodge Hall Music, Inc. v. Waco Wrangler Club, Inc., 831 F.2d 77 (5th Cir. 1987); Blue Seas Music, Inc. v. Fitness Surveys, Inc., 831 F.Supp. 863 (N.D. Ga. 1993).

[xi] See Bagdadi v. Nazar, 84 F.3d 1194, 1199 (9th Cir. 1996) (showing copyrighted instructional video in private language school was “public performance” where school was open to public and video was intended to be performed for students in classroom setting).

[xii] 17 U.S.C. § 501 et seq.

[xiii] In that case the copyright holder has to prove actual damages to him or her plus whatever additional profits the infringer obtained as a result of the public performance. 17 U.S.C. § 504(b).  The court may also award litigation costs and attorney’s fees. 17 U.S.C. § 505.

[xiv] 17 U.S.C. § 504(a).

[xv] 17 U.S.C. § 504(c).

231 thoughts on “When Should a Small Business Pay ASCAP or BMI?

  • Although generally accurate, the article draws a distinction between music that is played in such a manner that it can be heard by anyone in the store, or only by employees. There is no such distinction in the Copyright Law. Indeed, the legislative history of the 1976 Copyright Act makes it clear that performances in “semi-public” places such as factories are, nevertheless, to be treated as “public performances” under the federal copyright statute.

    Richard H. Reimer
    Sr. Vice President – Legal Services
    American Society of Composers, Authors and
    Publishers (ASCAP)
    One Lincoln Plaza
    New York, NY 10023
    Phone: (212) 621-6261
    email: rreimer@ascap.com

    • Yes, you would be well advised to pay the fees to all three performance rights organizations since each of them represents different artists and publishers. Obtaining licenses from all three organizations will provide you with greatest assurance against copyright infringement claims for playing music recordings without the authorization of the rights holder.

  • I am reading the article concerning ASCAP. My question is regarding a small personal training gym. Since it is basically background workout music that is being played over Pandora, etc. Would I still have to pay these fees to ASCAP or BMI. Would I have to pay to both> How would I know who to pay fees to if not both.

  • As in the case of the previous commentator, the most prudent course of action would be to pay the licensing fees to the performance rights organizations (PROs). The playing of musical recordings in the gym, a business establishment, amounts to public performance. Public performance requires the permission of the copyright holders. As commented earlier, the rights organizations represent different authors, so it would be best to obtain licenses from all PROs. For more information, you may go to the licensing pages of the main three PROs:
    ASCAP (http://www.ascap.com/licensing/); BMI (http://www.bmi.com/licensing/); SESAC (http://www.sesac.com/Licensing/Licensing.aspx).

  • What about a private gym vs. a public gym? For example I attend a small private gym that is with trainers only. I can’t go in and use equipment willy nilly like at Ballys. Do they still need to pay an ASCAP fee to play Pandora? Or what if I brought in my own ipod and played Pandora on their soundsystem?

  • My son is considering being a mobile dj. He has a system and has played a couple of private parties. Does he need a license to play for a block party?
    All the “clubs” he is interested in are lincensees.

    • I dj and have been for many years it is the responsibility of the venue. not of your son. unless he owns the places he will be playing he doesn’t need to worry.

  • I own a fairly small restaurant (42 seats) with an attached RV park. Ocassionaly, myself,folks from the park and a few local musicians get together and jam. Also 2 or 3 times a year I actually hire a band to play for the enjoyment of anyone who wants to listen. There is never any charge for this or any requirement to purchase something. Any & All are welcome. We do not have any other music such as a juke box, or stereo or CD’s etc., Nor do we have a dance floor. BMI has told me I must have a license if I have ANY music. Is this true? Also, someone told me that music that is more than 20 years old becomes public domain… since all we ever play is all of that and older, would that make me exempt from purchasing a license?

    • Dee, I know this is a little late but they want you to pay money in case someone plays something copyrighted. They don’t care about money taken or received, whether you pay the band or if there is a dance floor. They want to extort (obtain by threat) money from you even if you have only ever played original music and never intend on playing anything but, because they hate the idea of you having music that doesn’t include paying them for the privilege and they KNOW that you can not resist stealing from them by playing a cover song at some point in time. So to answer your question, if you play almost anything popular or recorded in the last 50 years then yes, you are at risk of being sued for copyright infringement. The song “Happy Birthday” (yes, that “Happy Birthday” that you’ve sung at every birthday party you’ve ever been to) is copyrighted until at least 2030 and brings in over $2 million a year to ASCAP, the music licensing body. They want you to pay them for the pleasure of singing this to your children (though they’d probably not get away with that in your house though YOU ARE BAD), and countless restaurants, parks and schools have been forced to pay to sing it. You can read about it at unhappybirthday dot com, where they actively encourage you to tell the authorities when a dastardly girl scout troop or church contributes to rampant infringement by celebrating a member’s birth.

      Public Domain is anything that has been specifically designated as copyright-free (like the artist expressly placed the work into the public domain), the rights have expired (generally somewhere around 75 years after the creator’s death in the US), or recorded/published before 1922. Unfortunately 20 years is no where near long enough.

  • I am a private non profit club and received phone calls and threats from ASCAP a year ago after several conversations we paid the fee which was over $500. Today I received a call from BMI now telling me that I have to pay them fees as well. This is ridiculous! What can I do legally, ASCAP lead me to believe that once I was covered with them I was fine now I have to pull out more money for the same exact thing.

    • Just pay the one licence if your willing to do some research. You can access both catalogs from ASCAP or BMI and have only certain songs played at you event. `The main problem with this whole thing is both company’s refuse to share in the booty. They say “we split the revenue with our publishers and writers”, but that continues to be the biggest lie out there. I believe we need a congressional inquiry into all PRO activities and finances. When was the last time these guys were investigated?

  • The best thing for any business owner is to have licensing in place for any music that they play. I work for PlayNetwork and we provide custom, personalized music for over 70,000 business locations today. For less than $500 per year you can get your own personalized music and PlayNetwork covers all of the licensing associated with that music; not just ASCAP, but BMI, SESAC and all licensing for every song played in your establishment. When you sign up with us there are no more conversations with any of the PRO agencies.

    Feel free to email me if you have additional questions or go to our web site http://www.playnetwork.com/#/contact/

    bjames@playnetwork.com

  • ASCAP BMI and SESAC all claim they are non-profit orgs. But it started out with ASCAP, then here come SESAC now we have to pay 2 companies then here come BMI now we have to pay 3 companies. Then if you have digital you have to pay AMI and others for other types of music. It is absolutely immoral. They are ruining America. They are against small business and trying to put them out of business, unfortunaltely they are succeeding. It is like buying your shoes. The designer gets their money the manufacturer gets their money and the retailer gets their money then you have to pay to wear them in public and pay more if you dance in them.

    • I am currently a small business (under 150 cap) that BMI is currently suing. They came (snuck) into my establishment with a recorder during a night of karaoke and requested specific songs only they cover.
      I have a license with ASCAP and their website claims they are a “one-stop supplier for your music needs”. Not so much.
      If they succeed in their lawsuit, I will be out of business too.

      • Ugh. That would tick me off so bad. I’d be tempted to sneak into their place of business and burn it to the ground. Good luck friend.

    • SESAC is a for profit company but that doesn’t matter. All three were in business before the 1939 cutoff date. Songwriters who belong to one cannot belong to the other two. The chance that you are not playing music from all three is probably zero.

      The bad news is that there are three. The good news is that there are only three.

  • Hi i am starting up a coffee/game shop in St. Louis MO. I am wanting to play music in the establishment with out paying $500 a year. The building is 5,000 sq feet. If I have comprehended your writing above correctly my only other options would be playing PUBLIC radio. Would I be able to hook up speaker to this? And would I be able to play this off of my computer W/O getting sued?

  • I heard something from a Muzak employee. We have a small gym (Curves) with <80 members total. We get <25 members/day who work out regularly.
    He asked me how many speakers we have. We have 2. He said that we don't need to pay the fees if we have less than a certain number. Also, if we are playing music that's older than 50 years, which happens to be a faveorite of the majority of our members. The licensing fees are way too much for our small business. Is he right? I'm trying to find this online.

  • I’m a musician who works one night a week in a local tavern. The owner has dutifully been paying ascap and bmi for years. Now, sesac is after her. I told her I am 100% certain we never play any music licensed by SESAC and am willing to sign a letter stating that. Wouldn’t it be their job to prove otherwise?

    • yes. SESAC generally works with gospel groups and foreign music licence. Tell them to give you a catalog of their music and do a search. Also you will find that if your playing early R&R , ASCAP pretty much blew off R&R and Blues off. So you might find that your tastes don’t really jive and you might not need an ASCAP licence.

    • You’d be surprised who SESAC represents. Bob Dylan and Neil Diamond are perhaps the two biggest artists whose music is covered by SESAC.

  • So it sounds like the exemptions to pay apply to a dance studio with only 2 speakers in the studio. The music is not for their entertainment and they are not being charged to listen to it. It is for the students who are learning to dance under instruction. What say you?

    • Are they having to pay to get into the studio? If so, then the studio would not be exempt since there is no way for people to listen to the music without paying.

  • I’m thinking of starting a 4th company so I can (snicker) act on behalf of songwriters too. It sounds lucrative. What exactly would I need to get started shaking down bars, mall stores, fitness centers and the like for one of those annual license fees? Thanks, A. Leech

    • You would need an Act of Congress and permission from the Federal Courts, the Dept. of Justice and probably the Library of Congress. In 1941, it was decided that three were enough (snicker).

  • The fees for BMI, ASCAP and SESAC only pay the authors of the music, not the music itself that is played by the artist. If you are streaming the music online via the internet, you need to register with SoundExchange, in order to pay royalties to the performers of the sound. This is the company that will distribute the money back to the artist that performed the music. If you are thinking of adding that music into a video production you need to have a Sync License and Master Use license, this is the same even if you recorded the music from a background source, such as a cheerleader, dance recital. This is available from the Harry Fox or the music label themselves.

    Also, SoundExchange is now attempting to make Radio pay to play there music “SoundExchange has been at the forefront in the fight for performance royalties for traditional terrestrial radio. Currently, there is no performance right for over-the-air broadcasts. Artists and record labels are not compensated when their creative works are used by traditional radio.”

    http://www.soundexchange.com/faq/#question-8144

  • I am a solo acoustic guitarist. I play mostly covers. I am continually told by small venue owners that they are worried about these bullying mafia organizations. Many have been harassed, and some are hesitant to hire me to play because they cannot afford the exorbitant yearly fees, let alone from three organizations! There should be an option where the artist can keep a list of the songs that he/she plays throughout any given engagement, and then send a nickel to pay for the use of each of the songs. That way, the actual person who wrote each song is paid, regardless of where they are on the ladder of popularity. There may be a small joining fee for the cover artist to become a member, and this would certainly encourage more songwriters to join and list their original music. This would also take the pressure off the struggling venue owners, and I could get more work, enabling me to pay my bills! Just a thought.

  • These music right laws, that I assume congress passed to protect songwriters and make sure they get paid by establishments as in Bar’s and Restaurants, might at one time been a good thing. But now there are so many many more talented musicians playing covers for a living and there are more musicians than there are night clubs that have live cover music. Personally, as one of those musicians, I think the musicians should be the ones that pay a yearly fee. That ( might ) lower the annual fee and still bring in more revenue for BMI and ASCAP. The laws need to be revised and it is going to take the same musicians who receive royalties to change them. I wonder how many scams have gone down due to someone claiming to be with BMI then walking away from a bar with a songwriter dues.

  • BMI has come knockin’…. Five of us old timers used to get together to play and sing for free at a burger shop. The burger shop owner is also the cook, waiter, lead guitar, and singer. The owner is open 12hrs/5 days a week serving mostly local farmers. I would bet there are less then 20 customers per day and BMI is putting the pressure on like he is a trendy NY coffee shop. We’re just tired old farmers getting together inbetween hamburgers and resting a spell playing some good old American country music. Other then putting a closed sign up, any suggestions?

    • Yep, we just wanted to have live saxophonist at a charity event that we (as the business) make nothing at, and just for one day. They said it doesn’t matter. You have live music.

  • FIGHT THIS! As a musician I have heard about bar owners being threatened by BMI ASCAP and it’s a joke. These are nothing more than a group of lawyers with some music industry background getting filthy rich off of innocent people. Let’s say for a moment that it’s legit. Do they have people go around and copy set lists of cover bands so they know how to spread the money around? Does a one-hit wonder like A-HA get the same amount of money as say Neil Young from this “organization”? I saw an interview with Mr. Young where he was asked if he received money for this and he said he got a check for $12 once. Where did the rest of the money go? Into someones pocket is my guess. So, I say it’s a SCAM, stand up and fight.

    • Yes they do go around with a list of cover songs.

      I am currently a small business (under 150 cap) that BMI is currently suing. They came (snuck) into my establishment with a recorder during a night of karaoke and requested specific songs only they cover.
      I have a license with ASCAP and their website claims they are a “one-stop supplier for your music needs”. Not so much.
      If they succeed in their lawsuit, I will be out of business too.

      • Guys, it’s not a scam, it’s the law.

        I’m an independent performing songwriter who plays originals. I report my set lists to BMI and earn substantial royalty payments as a result. When a venue doesn’t have a license, I don’t get paid (and I don’t play the venue again).

        There’s a reason we affiliate with an agency like this, because if we go individually to the venue owners asking for our royalty payments, we’d be laughed out of the place.

        • Please inform us of who you are, so we can ensure that your music is not played when you are not being paid for it!

        • WTF, doesn’t the bar pay you when you play? You mean the bar doesn’t pay but ASCAP, BMI cut you checks for gigs? Hard to believe.

        • What the PRO organizations do not tell you is how much money they make for themselves. 10% of all the money they collect is kept and paid to very rich executives. I believe in the copyright laws as stated but the fees have gotten so out of hand that it is hard to make a living.

          As far the independent performer, if you were paid to perform at the venue than you were paid for your songs that you performed. You own the rights to the songs you sang and the venue paid you for your performance. How much more money should you receive. What if we all finally get fed up and decide not to play any music? How much money will you get then? Also, how will anyone hear you or see you perform? The world seems to be structured about greed than arts.

          • with the pittance most music venues in the US pay their musicians compared to say Europe shut up. Songwriters need to eat as well. I presume you have music to draw in custom that you would not normally get.Are you giving away free food and drinks? Stop whining. If you want good songs to be played then the songwriter needs paying. Any wonder there is so much poorly written songs out there at the moment. The truly great songwriters have probably given up due to the theft of their work.

        • Really? Come on man – having people hear you play has been and always will be the best way to gain a following and become a success. You and all other musicians should be friggin GRATEFUL when a bar or nightclub or restaurant or whatever venue lets you play there – let alone PAYS you for playing there. I’m a consultant who helps a lot of bars and restaurants to improve their business and I see this a lot. I got clients saying “screw playing music” – because of this. You guys are hurting yourselves more than your helping yourselves. You should work with your rep organizations to loosen up on the small venues. Support them and they support you. Sure, go after people who are truly STEALING your music and performances, but lay-off the places that are legit. You should be ashamed.

      • LeShawn, maybe you shouldn’t be illegally playing music you don’t have a right too. BMI LEGALLY came into your establishment and caught you playing music you didn’t have a license too (you shouldn’t have had them available in the karaoke system). I am sick of people flouting the law and then complaining when they get caught. You only license songs from artists belonging to ASCAP? Then don’t play music or allow music to be played by artists belonging to BMI or SESCAP

      • I don’t think most businesses have a major problem in paying a fair share to royalties (assuming it goes where it supposed too), but the fact there are 3 different outfits out there is pure and simple extortion. I too am being sued by BMI, absolutely ridiculous since I am loyal member and pay my dues diligently to ASCAP…where and when does the BS end???

  • If I rent a limousine or limo bus and bring my own music on my mp3 player is the company I rent from obligated to pay this money that these people are talking about?

  • I’m trying to find the answer to Missy’s question myself. Isn’t a limousine or limo bus considered private property that is under the control of the person renting it? Members of the public can’t just get in your limo. I thought copyright laws were about public performances. If a customer brings cd’s or dvd’s into the car to play for themselves, how could that be copyright infringement?

  • The giants of the music industry is like they dont get enough money from the sales of CDs from Artist ,but now they want to get more profits from the customers that buy the product and play it in a place of business !
    We already pay for the music i dont feel that that is fair to a business owner it all , it is more dificul to do business this days with such of laws ,

    • These royalties go to the writers and performers of the songs and is where a large chunk of their money comes from. You think they make much money from CDs? Hahaha. It’s been broken down before by many artists. If a CD costs $15, the artist ends up getting less than $2 from it (various people gets cuts from it, with the studio getting most of it).

  • ASCAP came a knocking at our Bar/Restaurant. We ignored them and continued business as usual.. Probably got five letters.. ASCAP or any of the others cannot afford to pay attorneys $350 an hour to fight every bar, restaurant store etc. they send letters and hope people will pay their crazy fees.. Bovine excrement.

    • You guys don’t have to play the music you know. No body is making you. The copyright is owned by someone else, so it’s their terms. Or, you could just write and record your own music to please your patrons. These fees are a few dollars a day. Pennies per patron.

      • pennies per patron. i work at a restaurant we have live music and satellite radio. we pay the “commercial” satellite radio which SHOULD cover that? and BMI now ASCAP is calling saying we need to pay them for their cut. if the owner pays all three majors plus the commercial radio license that is somplace around 2000 bucks a year. we do NOT bring in that much business (after payin the live acts we occasionally have) from music to cover that plus make money from it. in the restaurant business a “few pennies per patron” is the difference between making it or not. why can the PERFORMERS who GET PAID to PERFORM. not pay a fee to the companies? this law seems to take from everyone and likewise screws everyone.

        • if you are paying for the commercial service that cover licensing for that music only. if you provide proof to the agencies that you subscribe to something like XM for Business they’ll stop.

          live music is a different story, which involves public performance fees.

      • you are missing the point “song writer” …most sane and responsible owners DO NOT have a problem with paying a fair share, it is the duplication of fees that is crazy! It literally is thousands of dollars out of pocket per year to comply. I am happy that DJ’s and Bands do not have to pay, but really? the bar has to pay to 3 separate outfits yet the DJ’s and Bands that play coer songs etc do not? It is abuse and BMI etc know it.

        • There is no duplication among the PROs. An artist belongs to only one of them. That means the artists covered by ASCAP are 100% different than those covered by BMI or SESCAP. You can check their catalogs and only play songs from one of them.

    • Hi Robert, not sure if you’ll get a notification for this, but did anything escalate? They just started picking on me, and I don’t want to pay them and then whoever else comes knocking… I’m a SMALL private instruction dance studio, less than 700 sqft of space and one speaker. This seems out of control.

  • Im a small gym owner with approx 125 members, I have one tv with dish network and a radio (local stations) in the free weight area. I also have exercise classes-Zumba-which instructors are using their music and Silver sneakers class that we buy from the silver sneakers people, am I subject to buy this membership for ascap.

    • Yes, as well as the licenses from BMI and SESAC. Since you don’t have live music, the fees will be comparatively low.

  • Music licensing for business/commercial spaces is extensively complex. The easiest way for small businesses to avoid any potential hassles and eliminate legal risk while also enjoying music in the store environment is to get a service like XM for Business. These services pay all royalties and licensing fees on your behalf (SESAC, ASCAP, BMI, etc) as part of the monthly service so you’re never at risk, and you get premium programming at the same time.

    At the present time, you can also get a discount on XM for Business service, with free months of service or radios/antennas. Check it out at http://www.xm4biz.com/spring13.

  • ASCAP and BMI are 100% not-for-profit organizations. They are basically a collective of songwriters that license the songwriters’ copyrighted music on their behalf. So, they aren’t “getting rich” of these fees. They actually distribute all the fees to their members — the songwriters who make a living from these royalties. Big famous guys like Neil Young or Bruce Springsteen get bigger distributions as their songs are played alot more often. Small guys get less. come on guys, there is a reason why businesses use music — it sets a mood, it entertains, it helps sell product. Can you imagine going into a bar or gym that had no music — where its silent??! Music has a value, and it is worth the few dollars a day to have it in your business, and to compensate the songwriters that created it for you to use. As a musician, I am disgusted that so many of you take us for granted and feel you can use my product for free. I need to make a living too, you know.

    • I understand where your coming from. Musicians who play covers should pay the fees. Otherwise small business owners don’t hire musicians anymore. We stopped having love music. I must get 20 requests a week to play and now I say no Talk to ASCAP

    • And yet every little musician I know who is a member of ASCAP has NEVER received a royalty check from them. Odd how that works. Since they are NOT actually tracking who is playing what, they don’t pay squat to the majority of the people who’s songs are licensed through them? Who gets the checks and how is that decided?

      • Two parties can help solve this problem. The act can report their setlist online very easily if they are affiliated with BMI/ASCAP. They will be paid (if the venue holds the proper license). The venue can also report who performs live at their venue and also put a setlist through.

        I earn between $10 and $20/gig for small rooms with no cover charge, simply by reporting my set list to BMI after every gig.

        • Indie Songwriter is a shill for PROs.

          There is not a single avenue for musicians and songwriters to get paid from the vast majority of establishments that have been shaken down by ASCAP, BMI, and SESAC.

          Coffee shops with ambient music, clothing stores, yoga studios, gas stations, restaurants, gyms… None of these establishments keep playlists, nor should they be expected to. But still, four or five hundred dollars per year – from every public establishment – is going to each one of the three licensing organizations.

          Hundreds of millions of dollars are going into ASCAP, BMI, and SESAC’s coffers with no record of whose music is being played where.

          • Stop trying to advocate for companies to violate copyright laws because you want them to play copyrighted music without permission

    • to the music guy:you should thank us small business onwners/bar/restuarant…by playing your music.if you want your music to be heared, we are here to play your music… I think this is the only way you can advertise your PIECE of work/your music.. so people will start buying or listening to you….how can you be known w/o us playing your music….”NO SALE,YOURE GOING TO BE UNKNOWN, I think we need to do the reverse you should pay us by advertising///playing your music…WHAT DO YOU THINK.SO STOP THINKING THAT WE OWE YOU A MONEY BY PLAYING YOUR MUSIC……

      • Actually the law states that you must receive permission from the copyright holder to play music in a place of business, so I dare you to run your bar or restaurant without music for a month and see how your bottom line does.

        Music is a product that has value and its creators should be compensated. Do you give away your gym memberships/drinks/meals away for free because it will be great exposure?

        • Actually yes… I do. I appreciate your efforts and dedication to maintain the rights of musicians and recording companies. What you are failing to see here is that small business owners who may not actually even fit into this category are being bullied and some even put out of business. I support the music industry and would be happy to pay an agency that will actually cover my needs. Not three separate entities claiming to provide the same service. There needs to be a clearer system where all parties are protected.

      • Wow. What an ignorant attitude. I suppose you give away your food for the exposure, in hopes that more people will come and eat your food for free. Because, after all, no one is going to know about your food unless you give it away. To hell with whatever it costs to make the food and serve it (or record the music), you’re going to be unknown. Why do you think we owe you money for eating your restaurant’s food?

        • Hmmmm atxphotoguy althought I agree that everyone should be paid for their product/work, yours is a flawed comparison because it failed to highlight the fact that people already PAID for the music by purchasing the cd/mp3. A more accurate comparison would be if the restaurant owner sold you the food and then wanted to charge you extra money if you ate it in public.

          Maybe there should be 2 different prices for the same song. Say pay $1.29 for songs that won’t be played in public and a higher rate for songs that you intend to play in public. That way the money goes to who it really needs to go to instead of having this vulture companies in the middle pocketing the money. In stock photography you pay a slightly higher price if you intend to use a photo on several different marketing material. Just a thought.

    • You should understand the facts before posting this comment. ASCAP and BMI do not work for free. They may be non-profit but everyone who works there gets paid and the collection agents get a percentage for what they do. If these organizations charged affordable fees than most venues would gladly pay.

      Further, the only reason that these organizations charge the venues rather than the performer is because the musicians who play covers would not bother getting licensed to perform the cover songs. It is very ironic that cover band musicians are paid to perform but they do not care to reimburse the songwriters for their work. Everyone must think that bar owners are rich, lol.

      • The collectors actually work on a commission. I stumbled across one of their goal sheets online when researching a BMI rep. They act just like a small balance collection agency.

      • Those who release commercial covers of songs DO pay the original artist. If you, for example, did a cover of “Smooth Criminal” and released it for sale, Michael Jackson’s estate would get a share of the revenue every time someone bought your cover of the song.

  • My workplace has been getting letters and phone calls from BMI demanding that we purchase a license from them. My workplace is a small, double express drive thru coffee shop. Our public occupancy amount is zero as there is no place for the public to come in and order or sit down for their meal. We play music on the local radio station inside the workplace with no speakers or anything feeding any music outside the building. In fact we just use a small single cd boombox. There is no public access to the music at all. It is just for the 2-3 people that work inside the building. 90% of the time we have it on to listen to our local talk show in the mornings. Do we need to pay this fee to BMI in order to listen to our radio?

  • If a company has multiple store locations, can the company pay a single annual licencing fee to the 3 PRO’s to cover all store locations? Or does each location need to pay its own fee?

    Also, if SiriusXM is permitted, would PAYING for Pandora and Spotify be a legal option?

    Thanks!

    • Paying for Pandora or Spotify only provides for private listening (check out their Terms of Service), so no. I would love to see Spotify provide an option for that, though.

      XM for Business specifically negotiates with the PROs to give you a package deal. Lots of chains use this to skirt the larger cost of licensing individual stores. Stop & Shop, Dunkin’ Donuts, Starbucks come to mind.

  • PLEASE SHARE>>> I am currently a small business (under 150 cap) that BMI is currently suing. They came (snuck) into my establishment with a recorder during a night of karaoke and requested specific songs only they cover.
    I have a license with ASCAP and their website claims they are a “one-stop supplier for your music needs”. Not so much.
    If they succeed in their lawsuit, I will be out of business too.
    PLEASE DO NOT IGNORE THEM!

    • Plea down and agree to a license. Unfortunately, although ASCAP may advertise them as such, they are not the only PRO, and you need to license all copyright material that is performed (live or via recording).

  • I am a restaurant owner who is being threatened by BMI. My thoughts are to let them go ahead and sue the restaurant llc. Good luck collecting.

  • I operate a small, private marina. Once a month I would have a small, afternoon function for my boat owners. Three hours of food, relaxation and a group of guys playing music.

    BMI is harassing me and telling me I need to license with them. We have a TV and it is on sporting events, weather or news programming.

    In looking at the licensing fees, I would have to pay over $900 annually for a three hour per month party….and that’s just to BMI….wait until the others come a callin’! Time to pull the party plug!

  • Hey, a good summary of the licensing issue. My friend just started a franchise business and he was planning to play some music in house. I think he would be very unhappy when he reads this. The licensing fee is ridiculously high, isn’t it?

  • We bought a sports bar and grill in February. The past owners had music venues at various times. We have not. BMI contacted us and we told them this. We have a Jukebox that another company owns and we pay the fees. Other than that we haven’t had anything. They have called my husband repeatedly even after that and a few weeks ago they called my place of employment. I must say I was not happy. I told them that we haven’t had any music and because of them we probably won’t. And for them to track me down and and call my employment was stalking and harrassment. If they didn’t stop I would file Charges. She said that she would take our names off the list. I believe in paying for what we use, but until I decide what I want to do they need to leave us alone. If the amounts are too high we won’t have it because we are a small business in a rural area. I have many employees that need to be paid before we have any of these events. I would pay if it wasn’t so expensive. So probably will never have anything. I have a family to support. That is why my husband and I have full time jobs outside of our business we don’t get paid yet this year. Local economy needs to pick up first.

  • heck we played music from the bible , BMI said they own that to well if they belive in the bible we all came from the same place and that my friends means that i get a check from the big 3 so whats up brothers and sisters you want your cut

    • Last I checked, there was no musical notation in the Bible, so someone else had to create the music, and deserve to receive compensation.

    • mike, there are no songs in the Bible. What you are playing are songs written by songwriters based on stories from the Bible. If you ever look, for example, at a gospel song book at a Church, you will see the copyright info for each song and see who owns the rights to the songs. Stop trying to get away with playing copyrighted songs without paying the people who wrote the songs.

  • if I have a company where I hire a local band to play outside do I need to license my business? or if I hook up speakers and play Pandora do I need one>?

  • Was the question about whether one has to pay a license fee if one pays for a subscription to Spotify or Pandora (not the free version) ever answered? Would this be treated the same way Satellite Radio is treated? Thank you.

    • This is not the same. Satellite radio in fact is only okay if you have XM for Business. They make a specific deal with the PROs to compensate for public performance rights in addition to the usual fee for private listening.

      Spotify and Pandora, even the paid versions, are only for private listening, and do not pay royalties for public performance rights.

  • We have a very small tavern, max is 49 total, which we have never went over 30. BMI is harassing us saying we could have 100, and that we have a dance floor, must be in 1person toliet, lol. Our jukebox is paying 20% fees up front. BMI says we need to still have a license just in case we decide to bring in a DJ, we had a DJ once that was paying ASCAP to play their music. Sounds like a double-dip of getting money from both parties, so I keep the jukebox, nothing else….no more dj because I refuse to play into this game, they sell their list to each other so then they all come after you…its a tough business and dont need their harassing techniques. They hire ppl to harass you and pay them a commission, with quotos to meet or they loose their jobs, so you always pay more than its worth…so we stay with jukebox, they get what we use….if they come back then I will serve them papers through the courts to stay off my property, since we are so small, everybody knows your name, we demand their picture ID to enter my establishment, then I know their name, that sort of gives us an even playing field…I play fair, pay for what I use, but I refuse to throw away money I dont have on their threats. Its a sad day in America when these idiots go after our public schools, scouts, and such for singing around a campfire or a group sing of “Happy Birthday”, GOD BLESS AMERICA!

    • We have a small bar that brings in maybe 50 people on a band or dj night. When I discussed with the BMI rep paying the yearly minimum ($343 I think) since there was no listing for my crowd size the rep said that was impossible. Said they have to go by my square footage. I received 2 different quotes. One for over $900 then after negotiating with the rep I received a 2nd quote for a little over $700. When I asked another rep about them changing the totals at their discretion i got no real answer, only threats of legal action if I didnt pay. Strangely, they go by the square footage of the entire building not taking into account that only 1/3 of the building holds customers. I tried explaining this to the rep but could not get them to understand. I then told the rep that I would ensure that no one would play BMI music but I was told that was “impossible”. I asked what if we only had them play public domain music and was again told “impossible”. I have asked several businesses in my area that are roughly the same size as mine and some larger if they are contracted through or being contact by BMI. I have yet to have one say yes. And, BMI refuses to say what businesses have licenses with them. It would seem that they would be more than willing to provide this information as proof that they are legitimate with what they are doing. They also claim that other businesses will lie about having licenses. That makes no since at all.

    • A songwriter can’t belong to more than one PRO. BMI pays BMI members, SESAC pays SESAC members and ASCAP pays ASCAP members. No “double-dipping”. Songs can be cowritten by members each belonging to a different society.

  • We were recently contacted by a ASPCA agent. We pay for business pandora, and play the radio. He said that we were in violation of the law. We have a gym, family owned small business. If we have to pay the 1500 he wants us to pay i will be laying of an employee. I think this has gone WAY to far. I want to protect the artists not these jokers. I wish the people who they are supposed to be protecting would read the types of people being targeted by these guys are. Come to our buildings, homes, etc. We already pay so much money in other expenses, now add another 1500 or more!!! Come on, there has to be a medium here.

    • Wow,
      I too have a small fit studio with fixed members. We often each bring our own Iphone to plug into the speaker, play pandora, I do pay for the commercial free pandora.

      So, I will have to pay all three licensing agencies? Will more come after me?

      Ascap has sent an email demanding money back to 2010…

  • Question…what if a small restaurant plays purchased CDs of music whose artists are not affiliated with BMI or ASCAP? Can you technically file a lawsuit for infringement? Is it right for these organizations to want to charge licensing fees when the artists are not even affiliated? Thanks!!

    • Technically an individual artist who is not affiliated, or whomever they elect to collect on their behalf can file a lawsuit. If you want to work out individual deals so you don’t need to worry about licensing, have each act you’re playing sign a contract waiving performance rights at your venue. Be mindful that SESAC is another PRO and may represent artists not on BMI or ASCAP that you are playing.

      • The PROs don’t represent the artists. They represent those who create the music, the songwriters. The artists will play and sing what they want.

  • These people act as if they are an enforcement agency. They will harass, threaten, treat you terribly and do any underhanded low down thing they can. One poster referred to them as “Mafia”, they are not far off. One poster said it’s only “pennies a day” That’s not so, between the three they wanted 4000 bucks a year for a 2000 sq. ft. club. I paid BMI at first then came to the conclusion that my place was just to small to profit from a band. So we stopped having them. That was 3 years ago. The club was closed a year ago and BMI is still billing me and demanding money, ASCAP calls and demands I join them. They absolutely use strong arm and intimidating tactics. If they are trying to bully you, then you need to file 2 complaints: one with the attorney General or comparable consumer protection agency in your state and one with the Federal Trade Commission. These threats and extortion attempts need to stop. File complaints with anybody that will listen!!!!

    • and you have never called to tell them you are out of business? SESAC and BMI fees can be found online. Business owners can call ASCAP for a quote. There is no way a small club can be billed $4K a year. As a business owner, I know this. Shame on you for lying.

  • I’m so sorry to hear everyone is being bullied by these performing rights societies and I understand where the confusion lies. We all grow up listening to music, we hear it everywhere and we feel like it is free. But music is a product, writers create the composition and artists perform it to make a living. Think about it like this…when you open up a restaurant, you know you will need to purchase napkins and salt and pepper shakers with the understanding that you will provide them for free to the customers. This is part of your business plan. You don’t go to the suppliers of the items and just take them, you purchase them. The suppliers then pay the people who make the napkins and that’s how the napkin people make their living. It’s the same with music. Like the napkins, you would like to provide music for free to enhance the diners’ experience. Also like the napkins, the music has been created by composers and artists as their way of making a living. Therefore, it should make sense that you also need to purchase the right to use the music. This should be part of your business plan as well, but it is often overlooked because, as a consumer, we are unaware this even exists. Again, because we are surrounded with music, we think it’s free, but please know that someone is paying so that you can listen to that music. For instance, the radio stations pay licensing fees the performing rights societies. So it may be free to you while you are listening in your car, but the radio station has paid for the right to broadcast it. Likewise, the restaurant owner is paying the three performing rights societies and SoundExchange in some cases so they can provide an atmosphere for you to enjoy your meal, just like they are paying a supplier to provide napkins so you can wipe your hands. Think about it, if you were to take the napkins from the suppliers without paying, there would be a heavier toll to pay than a BMI guy knocking on your door. People just don’t think about music like this because it’s not tangible. I completely understand that, we don’t grow up learning about that kind of stuff and it’s so easy to take for granted. I understand the frustration and I’m hoping this puts things into perspective a little more. In answer to a few of your questions, you can play terrestrial radio in your shop if it is under a certain square footage (see article above for details), and you absolutely can play music of any kind in your limo as its not a public setting(see para 2, Definition of a Public Performance).

    • As a producer of free outdoor festivals (some which are very small), my issue is not that I’m unwilling to pay a licensing fee to BMI & ASCAP, but the fees they are charging are not based on the music played. If BMI & ASCAP were to send me an invoice listing their members’ music that was played, then I would gladly pay. As the system is set up now, we’re being asked to pay a flat rate based on estimated attendance, with no accountability on their end as to the distribution of the monies received.
      I totally understand the cost of doing business & having music at a festival is an important component, but when the licensing fees, in some cases, are twice as much as our entertainment budget; it just doesn’t make sense.

      • Mary Lou, you make a really great point!! I never thought about it from this aspect. I know setting a flat fee is easiest for ASCAP/BMI, but it’s not really fair across the board. It would be nice to see a rate system in place. That would require someone standing up and leading the charge. You never now, it could happen! The business is in a huge flux right now, it will be interesting to see how things play out.

        Susie Q, I don’t work for a performing rights society, but I do work in music and I see the idea behind the royalties that ASCAP/BMI collect. I do feel like writers/artists should get paid for bringing music to our ears. But going back to what Mary Lou said, the system really is unfair. ASCAP/BMI could care less, it works for them. Again, I think it would take someone to lead the charge to change this.

        • The consent decrees that govern ASCAP and BMI can be looked up online. They and SESAC offer blanket licenses for flat fees. The courts and congress have decreed that’s how this works.

  • My guess is that all those who responded in favor of BMI & ASCAP likely work for those companies.

    Its a bunch of BS in my opinion and just a loop-hole and tactic to harrass small business owners.

    So someone tell me this… If there is a Zumba class going on with a LICENSED Zumba instructor teaching the class then why is there a need to pay extra licensing fees? Also, if you are being harassed for having Zumba at your fitness center than I urge those particular individuals to contact Zumba’s legal department at legal.compliance@zumba.com

  • As a musician and future venue owner, I love this discussion. I definitely understand and am in favor of paying the PROs. Songwriters and copyright owners deserve to be paid, and as Cat says, preparing for this in the business plan is as important as any other customer experience requirement.

    I would never condone the tactics or arm twisting that goes on, but I will say this: as a business owner, do the homework on understanding copyright law as it pertains to public performances. Understand what you need to pay according to how you plan to offer public performances of copyrighted works. Pay the PROs. Should you feel the fees are too high, tell them that you are willing to pay according to your usage model, and make a reasonable and fair deal with them.

    Document the deal you have offered them according to your usage model, and document all of your dealings with them. If the PROs refuse to accept your offer and say ‘all or nothing’, then allow them to take you to court.

    Copyright law does not provide for the fee structure that is charged, only that the PROs have a right to collect on the behalf of the holder of copyrights and the songwriters. They do NOT have a free license to harrass! Business as usual in America: negotiate. Don’t let the bullies win. Use legal tactics such as documentation and FTC and local commerce complaints so this is on your side should you go to court.

  • ASCAP AND BMI ARE DOING GREAT HARM TO THE MUSIC INDUSTRY BY MAKING THREATS AND DEMANDING OUTRAGEOUS FEES FROM SMALL NEIGHBORHOOD VENUES, I HAVE BEEN IN BUSINESS FOR 25 YEARS AND JUST NOW AM BEING BOMBARDED BY THREATS FROM ASCAP AND BMI, I AM JUST A SMALL NEIGHBORHOOD BAR THAT HAS ALL ORIGINAL METAL BANDS ON SATURDAY NIGHTS, BMI INSISTS THAT IT’S IMPOSSIBLE FOR BANDS TO PLAY ALL ORIGINAL MATERIAL, WTF??!!??!!??

  • As a small biz owner I am not paying for ahem “legalized extortion” These entiries have it all wrong. If I play broadcast radio in my bar, I am promoting the artist w/o due compensation. I’ll be sending ascap and bmi each an invoice for $350/a year for the promos.

    Oh if I see Bono begging on the street, I’ll buy him a coffee. Irish cream to be sure.

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