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Permalink Reply by Janice on July 24, 2013 at 9:19am

Technically, yes, you need all three. That said, most retail shops don't pay for it. You can opt to subscribe to a music service provider that includes licensing fees - like Pandora. Thats what we've been doing and its ok. Technically, you are required to also pay for live music if they are playing any covers at all (if they are all originals, I believe you are good).

Hope that helps a little. I am hoping the regulations change soon - unfortunately, most of the licensing $$ that Ascap, Bmi, and Sesac get goes to cover operating costs and then to the artists that are topping charts - not the independent artists that we play. It seems a bit unfair.

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Permalink Reply by Carol Fisher on July 24, 2013 at 10:23am

Thank you Janice.  So hard to cough up the $1000 or more, but our customers love the live music, and songs they are familiar with!

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Permalink Reply by Brady on July 24, 2013 at 2:02pm

You are smart to be scared. If you are playing live music in your store without a license and they know about it they will sue you. They have never lost.

Here's a link to a thorough discussion from a couple of years ago on the matter.

The SCAA had negotiated a reduced rate for member cafes a few years ago. Not sure if that's still available but worth looking in to.

Yes, you need all three, especially if they're calling you. Janice is technically correct about independent songwriters, though the ASCAP rep may not agree and will likely continue to call and send ominous threatening letters. This is a dangerous proposition too, since they've been known to send in "plants" - musicians that come in to play a mostly original set except for one or two covers. That and a witness are all it takes.

I would address this asap.

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Permalink Reply by Jarod on July 25, 2013 at 6:59pm

If you only want to pay for artists songs that are licensed by one company or another you can pay only that company.  But seriously, who's going to do that research.  Also, assuming that the independent songwriters that play your cafe register their songs with a licensing agency, you should still have to pay them for those live performances.  It's really annoying and we're located in Nashville!  I talked to a pretty prominent songwriter the other day and he said that he expects it to change in the next few years.  He believes that artists should be paying us (!) for helping promote their music.  Not a terrible thought.  

Is it true that if you play the paid Pandora or Spotify that you don't have to pay licensing?  I'm not sure that's the case since what you're paying licensing for is the right to 'broadcast' music and not just playing it for your own enjoyment.  I would check into that closely.  

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Permalink Reply by R. Justin Shepherd on July 25, 2013 at 7:53pm

The COMMERCIAL subscriptions to XM (can't say for sure about Pandora) do enable you to opt out of the licensing fees — as long, that is, as you are only playing music from that source (i.e. employee doesn't put on their iPod instead). Part of the fee covers XM's own reimbursement to those companies.

Of course, there is another way to get around this, but it will take a LOT of phone calls and a lot of knowledge on your part before those companies stop hassling you. The short version is this: the ASCAP/BMI fees are covering you in the event you a.) play licensed music on your stereo (and all the music is licensed) and/or b.) live performers play any song, even one, of one of those publishing houses' libraries. I know a guy (ahem) who has never payed either of these companies a penny, because he read the law closely and found that a two-speaker setup that "does not contribute to the financial revenue of a space" is an exemption from the laws, and he made it very clear to performers that they could not play cover songs of any kind. I'm no legal expert, so don't take my word for it. But this guy (ahem) doesn't pay them, and they stopped calling and asking years ago. 

Easy route: Get commercial XM service. Make it impossible for employees to play their music. And stop having performances — they are probably not really benefitting you financially anyway (just a hunch). 

PS: Jarod — An ASCAP guy based in Nashville came to check up on me after I finally got the phone battalion to stop calling me. I wonder if he's ever gotten coffee from you guys!

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Permalink Reply by Brady on July 26, 2013 at 6:58am

My family's shop went the route that Justin describes - FM radio only, home stereo, only hired musicians we knew and had them sign performance agreements which were kept on file. This agreement made our "originals only" policy very clear, had them declare that they were not a member of a PRO, and asked the performer to accept all liability for penalties that might arise from any violations of the policy. We'd attach a copy of the performer's set list.

We felt this was a good way to protect our interests while still doing something fun for our customers and giving some local musicians an easy space to play to and a chance to sell some merch. This was never a profitable thing, in fact the store lost money on every show. We enjoyed it though, and so did the customers and musicians. The musicians were always compensated a little and usually sold cds.

This policy met the spirit and letter of the law. Despite very clear explanations of the policy to our local ASCAP rep, they still wouldn't quit. The calls and letters escalated. Towards the end of the process, he even sent letters that intentionally mis-characterized telephone conversations - putting words in our mouths that suggested we were knowingly and flagrantly violating their policy, and threatening legal action. It became pretty clear that he was building a case.

We suspected that their next step would be to send in a plant to sneak in a couple of cover songs (this is something they've done before). This took all of the fun out of things - we became suspicious of all "cold-call" musicians, began refusing everyone except for one trusted friend, started chasing off customers that would sometimes show up on the patio to play their guitar, and finally just stopped having live music altogether. The letters stopped shortly thereafter. (The shop closed a couple of years ago for unrelated reasons.)

Here's the thing - you simply can't make sure that all of the songs that a musician plays in your store are originals. These organizations' catalogs are enormous. If a musician did do a cover you'd need to identify it quickly and take immediate action to stop them from playing. Even then, I'm not sure that'd be sufficient to avoid a lawsuit.

If they decide they want to get you, they're going to get you and there is absolutely nothing you can do to prevent it.

Sorry for the rant. This situation really frustrates me.

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Permalink Reply by Michael Arnovitz on July 27, 2013 at 11:45am

I've been through this on more than one occasion, and the short answer is this - if you're going to have live music, you need the pay the PRO fees. Period. Sorry, but it is simply WAY too much of a risk not to do so. 

Make no mistake, if someone plays a BMI/ASCAP song in your establishment, you are responsible. No matter what. Did you tell them not to? Doesn't matter. Did you put up a big sign saying "originals only"? Doesn't matter. Did you make the performers sign a contract agreeing to only perform originals and shield you from liability? Doesn't matter. Both the law and court precedent on this are clear: if BMI/ASCAP witness a licensed work being performed in your establishment they will sue you. Not the performer - you. And you will lose. And they can get up to $20,000 plus legal fees PER INFRACTION by the way, so we're not talking about small amounts of money. One song could put a small cafe out of business.

For a small coffee house like yours the fees could be as little as a few hundred per organization. It's frustrating, but it's another cost of doing business. If live music is an important part of your business model, pay the PRO fees.

On the other hand you can play broadcast music all day long with a service like Pandora and you're fine, because they've already covered the PRO fees for you. (http://www.pandora.com/everywhere/business)

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Permalink Reply by Jarod on July 27, 2013 at 1:55pm

Don't forget about SESAC, unless you don't want to play anything by their artists including Bob Dylan, The Avett Brothers and (ahem) Twisted Sister.

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Permalink Reply by Brady on July 27, 2013 at 2:35pm

Michael, you hit the nail on the head.

The big issue that I have with this situation is that you basically have three options: pay the PROs and have music every week in order to spread the costs out and make it viable, never have live music, or pay the PROs (even if you only want a monthly show) and lose money. At around $1000 a year for a license, you're looking at $20 per show if you do music weekly. $100 a show if you go monthly. Yeah, if you only do shows every other week, the PROs may make as much at each one of your shows as your baristas do.

Sad, considering that this money could have gone towards paying the artist that's actually performing (and in many cases actually wrote the material they're performing).

It's a racket.

Michael Arnovitz said:

I've been through this on more than one occasion, and the short answer is this - if you're going to have live music, you need the pay the PRO fees. Period. Sorry, but it is simply WAY too much of a risk not to do so. 

Make no mistake, if someone plays a BMI/ASCAP song in your establishment, you are responsible. No matter what. Did you tell them not to? Doesn't matter. Did you put up a big sign saying "originals only"? Doesn't matter. Did you make the performers sign a contract agreeing to only perform originals and shield you from liability? Doesn't matter. Both the law and court precedent on this are clear: if BMI/ASCAP witness a licensed work being performed in your establishment they will sue you. Not the performer - you. And you will lose. And they can get up to $20,000 plus legal fees PER INFRACTION by the way, so we're not talking about small amounts of money. One song could put a small cafe out of business.

For a small coffee house like yours the fees could be as little as a few hundred per organization. It's frustrating, but it's another cost of doing business. If live music is an important part of your business model, pay the PRO fees.

On the other hand you can play broadcast music all day long with a service like Pandora and you're fine, because they've already covered the PRO fees for you. (http://www.pandora.com/everywhere/business)

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Permalink Reply by Kathy Fadorsen on August 3, 2013 at 11:55am

 We quit having live music 3 years ago because of this and I still get calls from ascap. They just dont quit. What is a shame is we where not making any money and neither was the musician. The musician did get to pratice in front of people instead of family. Very sad state of affairs. Was told by a lawer they dont have to prove you played there music you have to prove you didnt  

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