It seems that for many years now the music industry has been under attack. Piracy has been around for years and with the digital era it ran out of control with the launch of Napster and other file sharing platforms. It seemed like the end was near.
The industry found a savior in 2001 when Apple released the iPod. The sale of MP3s gave the industry the boost it needed just in the nick of time. This rejuvenation however was short lived. Streaming services such as Spotify, YouTube and Pandora changed the way music is consumed. Because these platforms provide consumers music at no charge the value of music diminished. Affected was also the way songwriters, composers and publishers are compensated for their work. With music no longer being sold they now have to depend on streaming royalties which could be as low $0.0006 per stream. With consumption revenues dipping so low musicians and publishers had to rely heavily on other income sources such as licensing their music for film, TV shows, Commercials and video games (known as Synch licensing). Another revenue source is public performing licensing. Public performance licensing is anytime a song is performed in public. This includes all forms of radio, concerts and music played at business such as hotels, restaurants, bars, coffee houses, etc. It is this last set of examples who have now decided to attack the music industry as well.
Public performances royalties are collected by organizations known as Performing Rights Organizations (PROs) In the US there are 3 major ones: BMI, ASCAP and SESAC. The PROs collect royalties on behalf of songwriters, composers and publishers. For the sake of transparency I will state that I worked for one of the PROs as their Regional Area manager. My job was to visit business who were using music, yet were unlicensed.. My area consisted of all of central Florida; Tampa Bay to Daytona Beach. I took this job with all the enthusiasm in the world, knowing that I was going to be helping others in the music industry. I was in for a rude awakening. What I found was a large list of local business who refused to pay for their music licensing. It was not that they didn’t know, they were well aware of their legal responsibilities, they just flat out refused to pay or stop using the music. The main excuse given was that it was too expensive. It is important to point out that the fees charged by the two biggest PROs (BMI & ASCAP) are dictated by the federal government. These fees are based on usage. So a small bar who does live music only a couple times per week would pay a lot less than a large night club that operates all week long.
It goes without saying that my experience during this time was very disappointing. Not only did owners refuse to pay, they were offensive and abusive. Some of the worst abusers are the most successful bars, clubs and restaurants in town. The same one’s that are packed on the weekends, playing music and not compensating the music creators. The same one’s who brag about the success of their business, yet refused to pay for a license that often cost less than $700 per year, that’s less than $2 per day. Now as if it was not enough that they steal other people’s creation, some of these local venues have joined other venues nationwide and are lobbying congress to pass HR 3350, also known as the Transparency In Music Licensing and Ownership Act. This law is being heavily lobbied by a group known as “MIC”, which is made up restaurants, vineyards, coffeehouses, bars, etc. The law proposes that a master list should be created so that these venues can then go search to see which PRO can license the music they wish to use. To someone not in the industry this would sound like a good idea, but it is not. It is truly just a way to create a loophole for these venues to legally not have to pay for licensing. For example, this law proposes the the rights owners have to register “all performing artists” which is impossible to do, since copyright law allows anyone to do a cover song. Rights owners have no way of knowing who will (in the future) make a cover of their song. Failure to include just this one item can void damages due if infringement occurs. Additionally, the idea that venue owners are really going to take the time to search a list before allowing a performance in their establishment is ludicrous. In today’s world of collaborations, many songs are written / composed by artist who are affiliated to different PROs, therefor both licenses are required. Playing devil’s advocate, let’s just say a venue owner does request a playlist from a performer prior to the gig and does check the list to verify that the songs are under their license, how will the venue deal with request? How will venues deal with open mic nights, DJs and Karaoke? The idea that a master list is good for the music industry is simply not true. This law’s solely intention is to help those business consume music for free and cutting off yet another revenue source for songwriters and publisher.
I want to take a moment here to acknowledge that there are a lot of responsible venue owners who appreciate the value that music brings to their clients. Those venues deserve your patronage and your loyalty. If you make music you should make it your business to find out if the business you support, supports you. If you are a fan, we in the industry would appreciate your help. Ask the owners, servers, bartenders if they are licensed. Make it a point to let the business owners know that you will not come back if they continue to use music without paying. Contact your legislator and ask them to vote no on HR 3350. Today the music industry is under attack again. Will you stand with us?