ASCAP, BMI, SESAC and venues

I have hosted many concerts in my home through CIYH, and now own a small cafe in AZ where we host musicians about once a month. These are paid gigs for the musicians, so it’s a different model than house concerts. I was recently (and rather persistently) contacted by BMI insisting that we pay a BMI licensing fee and I’m wondering if you have any thoughts about this if we are exclusively hosting all original music. Thanks in advance for your insight. D. Atkins

Performing Rights Organizations (PROs) exist in most all developed countries, and the United States is the only country that has three of them – ASCAP, BMI, and SESAC. In the UK it’s PRS, in Canada it’s SOCAN, and so on… they each have their own rules for collections and payments, but the underlying purpose is to allow owners and writers of music to be compensated for the use of their music.

In the U.S., licensing via PROs (BMI, ASCAP and SESAC) is a complicated issue. There are a few things at play. Congress has given these organizations a mandate (law) to collect for the PUBLIC performance of music registered with them. Almost all professional songwriters and publishers register their works so that they can be compensated for the use of their songs and recordings.

1. This applies to playing recorded music in a public setting. The radio/records playing in the customer area of a restaurant, for example, mean that PROs are allowed to license and collect from these venues, even if no live music is played.
2. It also applies to live music in a public setting.

Since most venues have both live and recorded music, the typical license is called a “blanket license” to cover everything, and they usually start around $300 per year, for each PRO. Few venues are pro-active about negotiating the fees and paying, but eventually at least two of the three organizations find them and ask for a license.

The formula’s vary, and are a bit negotiable. Basically, it’s based on square footage and frequency of events, with some other variables. There are also “per use” licenses, for a one-day festival, for example. The responsibility to pay the license is always with the venue, not the performers.

Challenges:

Public venues can’t just claim that only original music is played there. If you have a strict policy of not just “no covers” and no “Happy Birthday”, but also “no co-written songs”, you might be able to convince them not to license you… but you can bet they will test you, and if one of your performers slips up on the wrong night, they’ll likely come after you more strongly the next time. Plus, if you have recorded music playing during non-performance hours, there’s probably even less wiggle room.

Our recommendation:

Negotiate a deal you can afford. If you are not a strong negotiator, have someone experienced (friendly attorney, fellow music professional, etc.) do it for you. As of this writing $300-400 per year (per organization = X3) seems to be the rate for small coffeehouses. No one likes to pay the water bill either, but it is a legitimate business expense, and the water company doesn’t care if your business is making a profit. Neither will the PROs.

House Concerts:

To the extent that they are private events in people’s homes, PROs should have no standing to collect at house concerts. However, some house concerts are very public with their promotion and have no filter or introduction process before issuing invitations to people they don’t know. This opens the door for PROs to claim the events are not private and therefore subject to licenses. We recommend that hosts start small and grow their audience responsibly over time so that they don’t have to do public promotion. Friends, neighbors, and friends of friends are the place to start. In the excerpt below, notice that the “broadcast” of a performance (live or recorded) via the internet can also be a problem for house concerts.

Copyright Law

To perform or display a work “publicly” means—

(1) to perform or display it 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; or

(2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

— http://www.copyright.gov/title17/92chap1.html

Notice the bolded text above and compare it to the language on a PRO site. Notice how the PROs omit “and it’s social acquaintances?”

Q: What is a public performance of music and what is the “Performing Right”?