The story began with an unassuming male customer chatting up the bartender at a local winery. The conversation turned to the Christmas music playing in the background, to which the female bartender gave a vague response about it maybe coming from a CD. At these key words, the customer revealed his identity as an agent for ASCAP, a performing rights society.
Then, said Jean O’Daniel, co-owner of Jean Farris Winery, “he went ballistic.”
According to O’Daniel, the agent got in the bartender’s face and threatened her.
“He was so aggressive with her she quit,” O’Daniel said. “This is my home ... He attacked someone in my home.”
“It’s kind of like the mafia,” O’Daniel said. “They ran off a very good bartender out of fear.”
The whole experience changed her outlook on how she runs her business.
“We don’t have any more live music here because of this,” O’Daniel said.
The tales of bullying and strong-arm tactics by these organizations abound on the Internet and were even discussed in a Congressional subcommittee during the consideration of the Fairness in Music Licensing Act of 1998.
Like all good stories, however, there are at least three sides — the business owners who often operate on thin margins, the performing rights societies acting to collect for the benefit of songwriters and publishers, and the songwriters themselves. With the enforcement of these licenses, however, are performing rights societies potentially stifling the businesses that serve as incubators for new musical talent?
ASCAP, BMI and SESAC are performing rights organizations (PROs) chartered to direct the royalties from the licensing of public performance rights of music to the respective artists that wrote them. To collect these royalties, they issue blanket licenses to businesses that play music as part of their day-to-day operations. This music can be everything from live musicians in a major concert venue to a CD played in the background behind a barista at a coffee shop.
The licenses provide royalty income to songwriters and publishers whose works are performed publicly in these venues. Businesses that don’t comply with these licensing requirements and have public performances of copyrighted works are considered to have infringed them under Title 17 of the United States Code.
“Most businesses realize that the value of the music is greater than the fees. Eighty-seven cents of every dollar is distributable royalties, paid out to songwriters,” said Ari Surdoval, director of corporate communi-cations and media relations at BMI. Surdoval said there are more than 5,200 songwriters and 700 publishers in Kentucky registered with BMI and receiving a share of those royalties, and those are the true beneficiaries of the licensing.
“I think the role of the PRO representative is to establish a professional relationship with the owner of the establishment and educate them on why they must obtain a license and be an advocate to the artist at the same time,” said Keith Roberts, former licensing agent for SESAC. “It’s in both parties’ interest to work out a way for the music to be heard and used for the intended purpose, which ultimately is the entertainment of the customer.”
This can be a difficult task, however, when soliciting blanket licensing fees. These fees range in the area of $200 and up per performing rights society per year for businesses, and combined can total in the thousands, which is not an inconsequential burden on a small business owner.
“It’s not easy, nor has it ever been, for small businesses,” said Surdoval. “But playing music is a business decision. If music didn’t drive profit, it wouldn’t be there.”
“If we paid them what they wanted, when they wanted it, we would be out of business,” countered Harry Somerville, owner of The Green Lantern. His small bar is modeled after Southern juke joints and dive bars and is a vibrant spot for original local music.
Somerville puts the amount he pays the PROs at more than $3,000 per year — not a modest sum for a business that hangs by a thread, he said. He admitted that the payments don’t always land on time, either.
“We’re always about a quarter-mile behind,” he said.
One business owner, unwilling to be identified for this article due to fears of trouble with the PROs, said that he’d finally gotten clear of some difficulty with ASCAP, ultimately settling on no music in his establishment to keep the PRO at bay, and he added that dealing with the ASCAP rep left a horrible taste in his mouth.
“I tossed them out,” he said. “And if they come back, I’ll get a restraining order.”
Part of the issue, it seems, is that sometimes the first contact businesses have with the PROs is a request for money for a commodity they weren’t aware they had to pay for.
“I thought it was a joke,” said Somerville, of being approached by the PROs the first time. “Then a buddy told me they were serious.”
“For a restaurant owner, if [the PROs] show up, it may seem like they’re being fleeced,” said Gene Williams, co-owner of Natasha’s Bistro & Bar. “But they kind of set themselves up if they’re not educated.”
Roberts admitted that acting on behalf of SESAC could create a bit of tension with new contacts.
“I recall several times speaking with the owners or managers of establishments whose attitudes were less than professional, but it was never ugly. I would describe it more like getting a call from the IRS, or someone who was trying to take money from them for something they didn’t understand.”
Vincent Candilora, senior vice president of licensing at ASCAP, said that there might be some hard feelings from business owners when paying the fees.
“The business owner — he writes a check, but then he looks around and doesn’t have anything new that he didn’t have before, even though he had been using the music without paying for it for the last two years.”
But, he said, the businesses owe this money to the songwriters for using their works.
“People don’t want to pay because we can’t shut [the music] off,” Candilora said. “When you don’t pay for electricity, the lights go off.”
As to whether this puts a squeeze on small-business owners, Candilora was sympathetic, but said, “The small businessman that is the songwriter, that’s how he makes his money. Can you find a smaller businessman than a songwriter?”
He attributed some of this tension to the fact that education is coming from the PROs themselves, without anyone else taking up the mantle.
“I wish there was a little more education done at the federal level, at the state level… That kind of thing would be helpful,” he said.
Williams was generally supportive of the job the PROs have to do and said that the fees he paid to them are just part of the cost of doing business.
“They’ve got a PR problem,” he said, “but they’re paying artists. We all want artists to be paid.”
The artists agree.
Robby Cosenza is a local road warrior musician with a resume that includes bands such as The Fanged Robot, Scourge of the Sea and These United States. He said he feels like he’s probably being compensated justly, “but at this level, there’s no way to know.”
Duane Lundy, himself a veteran of venerable local favorites Chico Fellini and producer, songwriter and owner of Shangri-la Productions, agreed generally that his PRO is likely compensating him somewhat appropriately for the performances of his works, but that unless an artist is a high-level earner, there’s no way to be sure.
“[The PROs] are doing the best they can with what they have... I think everyone is relatively well intentioned. Right now, it’s the wild, wild West,” he said.
He believes, however, that the rules the PROs are operating under in enforcing these licenses are outdated and that the enforcement against small businesses is a waste of time, particularly in an age where music is readily available on demand in portable devices for which licensing is unclear.
“Everyone has these little electronic devices that will stream music on demand,” he said. “Nobody is going to make any money if they can just flip on whatever they want and listen to whatever they want.”
As a final note to O’Daniel’s experience with an ASCAP rep, Candilora said that particular rep was replaced two months ago and that he expects his agents to be professional at all times.
Roberts said that the current method of licensing does add to the cost of doing business where overhead and profit are always at odds. But he believes the value of the license to music and songwriters in general overshadows the costs.
“Look at it this way: If music was not a way for the owner of an establishment to bring customers in, then why offer it?” he said. “On the other hand, it’s through these establishments that creative people have an avenue to offer their art to the consumer in exchange for payment. I think it would be harmful to the artist if we didn’t have laws that govern the use and protection of intellectual property, as the value of their art would be zero.”