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.
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.
— from 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”?
A “public performance” of music is defined in the U.S. copyright law to include any music played outside a normal circle of friends and family.
— from http://www.bmi.com/licensing/#faqs