Pay to play

Local bars and clubs feel the pinch from performing rights organizations collecting music copyright fees

Aug 18, 2010 at 5:00 am
Pay to play
Photo by Frankie Steele

In June, the American Society of Composers, Authors and Publishers filed 21 lawsuits against restaurants, bars and nightclubs that haven’t paid for the music played in their establishments.

ASCAP is the country’s oldest performing rights organization, boasting 380,000 member songwriters, musicians and performers. Underlying these complaints are years’ worth of phone calls, in-person visits and formal correspondence from the nonprofit, stating that the venues have failed to pay annual fees for spinning, say, Stevie Wonder’s “Superstition” or Beyoncé’s “Single Ladies.” ASCAP publicizes these suits heavily because, by targeting the worst scofflaws, they hope outliers might finally make good.

None of the venues named in these lawsuits is in Louisville. But representatives from ASCAP — one of three such groups that collect music copyright fees nationwide — do stay in touch with local establishments, and they do so regularly. Broadcast Music Inc. (BMI), whose licensing office is just down the road in Nashville, and SESAC (which originally stood for Society of European Stage Authors and Composers), are equally as notorious in their collection efforts.

Basically, if a bar, restaurant, retail outlet or other public venue plays music, money is owed to the artist. In turn, the aforementioned groups collect royalties on behalf of the artists they represent, minus a cut of course.

The collection reminders are simple: Here’s the fee. If you don’t pay us, we can go to court to get our money. And if we go to court, we will most likely win.

To date, BMI has never lost a case against a delinquent venue.

Here, you would be hard-pressed to find a bar owner in town unaware of ASCAP, BMI or SESAC, whose acronyms usually follow a string of expletives. One Southern Indiana man did not want himself or his business identified for a simple reason: He’s not paying a dime.

“They all harass us,” the bar owner tells LEO Weekly. “This is before we were even doing live music. We were only doing karaoke one night a week, and they wanted $1,200 a year. We’re a struggling business.”

The tactics turn shady when the publisher agrees to take a lesser amount to settle the dispute. “They’ll say, ‘You owe us $1,200, but we’ll take $700 right now,” the owner says. “That’s how I know it’s a racket.”

The effect performing rights organizations have on live music overlaps three varied perspectives: the bar owner, the organization itself and finally, the artist, all of which operate inside a flailing economy and music industry grappling with the future.


The Bar Manager    

“You won’t find anyone in the bar business who thinks it’s fair.”

Todd Webster is right: Most Louisville venue owners contacted would not discuss dealings with any of the big three performing rights organizations, at least not on the record. They don’t want to be a target.

At times, overzealous collection efforts and incessant phone calls result in a tense standoff and, occasionally, threats. In an Aug. 8 New York Times Magazine article, writer John Lowe reported on a conversation between a Kentucky RV resort owner and a BMI licensing officer who had been relentlessly trying to collect fees. In it, the man said over the phone that he would come to the woman’s office and “spray her down” with a machine gun. Other angry venue owners responded to her by hurling expletives and spitting goobers.

But Webster doesn’t need to threaten anyone. Every January, Stevie Ray’s Blues Bar, where he’s the chief talent buyer and manager, pays all three organizations its annual fees, no questions asked.

Webster estimates Stevie Ray’s pays more than $5,000 a year to the performing rights organizations, which is probably why he hasn’t fielded a phone call or seen a licensing rep since he started working there in January 2006.

Winter is the hardest time for a lot of bars. They’re renewing their liquor licenses and insurance, and January is traditionally a slow month for bar sales, a perennial financial hangover from the Christmas holidays.

A bill for music royalties is the last thing Webster wants to see, especially when he doesn’t know whether the money is, as ASCAP says, actually funneled back to the member artists. “No blues man will say he or she is getting a cut of that money, so who benefits?” he says. “Where does the money go? How does it go back into the local market?”

Jim Allen is a retired hairstylist who used to play Top 40 country six days a week in clubs all over Louisville. Along the way, he decided to open his own place, focusing on the original music played by so many of his friends. In four years, he bought and renovated the property behind his salon, The Place To Go, and called it The Hideaway Saloon. A staple for jambands, roots and progressive rock, the intimate venue has roped in locals like Paradigm and Arnett Hollow, as well as national acts like Eoto and Marco Benevento.

Allen has complied with BMI’s $800 annual fees in the past, but in recent months he’s asked his lawyer to investigate the legality of their fees. Allen says he resorted to this after their reps became rude and stonewalled him when he started asking questions about their pricing structure. “I hate those people,” he says. “I think it’s extortion. You can’t even talk to them. They automatically say, ‘It’s our price; there’s nothing you can do about it,’” at which point litigation comes up. “If I pay $800 for all three of them, that’s $2,400 a year? I’ve got a small place.”

With an autistic son, he’s considering getting out of the bar business. “Everything goes up every year. ASCAP goes up. We don’t sell food. We make our money in three hours, two nights a week. It’d be best for me to just shut down,” Allen says. “Somebody’s getting rich, it’s just not the musicians.”

Webster, on the other hand, will be sticking around. The five partners he reports to don’t make a living off the venue, which has become ground zero for top-tier blues artists like Tab Benoit and Ronnie Baker Brooks (the last concert to break even in the past four months). To its owners, Stevie’s is strictly, in music parlance, a side project. “We have every kind of license, every kind of insurance. The value of this place, if (the owners) ever decide to sell it, is straight,” he says. “They will get exactly what they paid for it.”

The Bad Guy

Vincent Candilora is the senior vice president and director of licensing at ASCAP. The company, which represents a catalog of more than 8 million songs, files roughly 250-300 lawsuits a year, representing a small fraction of the venues in the country. Most pay their dues.

“Unfortunately, it is the very last resort that we file infringement suits,” Candilora says. “It’s somewhat of a regular practice, because there are always those few establishments that feel they can continue to ignore ASCAP, and they feel like they can ignore federal copyright law, and they believe they can continue to use our property without permission, without paying anything for it."

ASCAP’s fee structure breaks down like this: It takes the venue’s legal capacity and multiplies it by a dollar amount corresponding with how many days a week the clubs hosts live music, recorded music, or both. The total is what the venue pays for the year:

• Establishments with live music four to seven nights a week pay $5.15 times their capacity.

• Live music three nights a week or less: $4.30.

• Recorded music nightly: $3.

• Nightly karaoke, which ASCAP calls “recorded music with enhancements,” or a DJ: $1.75.

• Clubs with live and recorded music get a 33 percent discount on the recorded music played: $2. Jukeboxes are generally maintained by separate vendors who pay the licensing fees, not the venue itself.

• Businesses that are 3,750 square feet or smaller that play the radio are exempt.

• Venues that pay their first three years worth of license fees upfront receive a 15 percent discount.

ASCAP has operated under a federal consent decree since the 1950s. Their rates are set by the U.S. Department of Justice and stay the same whether the club is in Midtown Manhattan or Mid City Mall.

Like BMI, ASCAP employs a crew of licensing managers that travel throughout the country to venues that may or may not be in compliance. The Internet has made it easier for them to find out when a new venue opens.

“When we do this,” Candilora says, “there’s no surprise anywhere along the line.”

He maintains ASCAP is not out to shut down venues; they just want to see their artists compensated fairly. Music enhances a venue’s profile and business, he says, and it’s unfair for clubs like Stevie Ray’s to pay their annual fees when other clubs don’t.

One loophole worth mentioning: Any songwriter who’s a member of ASCAP can grant their own license to a bar or venue to play his or her music. It could be one way a club that’s delinquent can avoid having to settle with ASCAP or pay fines, which can range up to $30,000. Those settlements are usually kept confidential, but Candilora says that, in any lawsuit, ASCAP will never agree to settle below its stipulated license rate.

“If the fee for one year is say, $350, and you’re going to risk paying tens of thousands of dollars in infringements? Why would you do that?”

The Artist

The key tenet of performing rights organizations is that the dues they collect from venues go back to the artist.

Native Louisvillian Shannon Lawson founded The Galoots and now performs as part of Nashville’s venerated Muzik Mafia. He joined ASCAP because, unlike BMI, ASCAP is nonprofit and member-owned. They generally treat him like a priority, inviting him to expensive dinners and awards shows. For that, he’s grateful.

As an ASCAP writer, Lawson has three jobs: He makes his money writing music, often for other musicians. What time isn’t spent on that is devoted to making sure he has the copyright administration rights for all his songs. “If I wrote ‘Ring of Fire,’ and I don’t own the admin rights, and someone wants to make a commercial out of it, I can’t tell them I don’t want that to happen."

He also is charged with making sure his publisher is on the up-and-up, and that’s where his working relationship with ASCAP can be rocky. “How do you make sure that you’re getting paid? That’s on the minds of every writer.”

Twelve years after he moved to Nashville to nourish a solo career, Lawson has more questions than answers about the way ASCAP works for him. They send him his quarterly statement that breaks down, for example, whether he’s been played on a German radio station.

“Unless there’s a single or a new release, it usually doesn’t add up to a whole lot.”

On the flip side, he says, “I’m still a little bit in the dark.”

Lawson says he doesn’t have faith that ASCAP’s accounting has ever been accurate. Why can his iPhone Shazam software identify songs anywhere, but ASCAP can’t accurately track when and where his songs are played?

They also resort to some dubious tactics to sign new artists: Lawson’s girlfriend, Tiffany Goss, unknowingly became an ASCAP songwriter when she signed up for one of their songwriting camps. When SESAC wanted to sign her, she had to wait a year for her window to open; an artist’s window opens a year after signing with a publisher, and at that time, they are free to change publishers.

“They don’t always operate like I think they should,” Lawson says.

While he wants to make a living, he’s sympathetic to the venues. Without them, there’s no place for him to play. “They’re picking a really good time in the economy to come after these guys, and that’s tasteless.” If ASCAP is losing revenue to digital downloads, “they’re not losing as much money in relation to everybody else.”

As of this writing, Lawson was preparing to meet with officials at ASCAP Nashville, many of whom he’s known for years. His own window might be opening soon, and he’s looking at exploring other options. “They don’t want you to leave. You’re a potential income generator for them.”