A recent spate of phone calls and letters from the big three “Performing Rights Organizations” (PROs) has left some local bar and restaurant owners worried.
The organizations, ASCAP, BMI and SESAC, represent the writers of millions of songs. They say if you play their tunes, you have to pay up. Live, recorded, from the Internet — you name it.
Among the three, they own millions of songs, including “Happy Birthday.”
In fact ASCAP continues to collect more than $2 million annually in fees for the song, which was written by two sisters in 1893.
Dale Dunning, owner of The Oasis Sports Bar & Grill in Sequim, said sometimes the PROs have gone way overboard. In 2009 ASCAP made headlines when it sought to be paid when one of its cell phone ring tones “went off” in a public place.
The phone’s owner already had paid for the ring tone, Dunning noted. But ASCAP wanted to get paid for the entertainment value enjoyed by others in the room.
Fortunately, Dunning said, ASCAP was going after “the big boys” — companies with their own fleets of lawyers. They said no, and that was that.
He cited another public relations disaster for the industry, an ill-considered effort to collect from the Girl Scouts for songs sung around the campfire. Because of the public outcry, they eventually sold the Girl Scouts a license for $1. So much for fair pricing, Dunning said.
The microeconomic view
Many Sequim pub owners say paying the licensing fees would simply make live music too expensive. Forced to pay, they would have to stop providing music.
At least one local venue already has called it quits.
Val Culp, who with husband Larry owns the Old Mill Cafe in Carlsborg, said her recent experience with BMI was a “nightmare.”
She said she’s received calls for years, but four months ago BMI made a new push, starting with a phone call.
“I said I don’t have live music,” Culp said.
The fellow from BMI said he had a report that John Erskine had been playing at the restaurant.
Culp was astonished. “I said, he’s an old-time customer and he brought in a little keyboard.”
Culp said Erksine has in the past played at the restaurant perhaps twice a year, including Valentine’s Day. She said BMI wanted more than $300 for an annual license to play their tunes.
Culp told the BMI representative to forget it. “I’m never going to have him back,” she said.
“And then I got a call a week later, and a week later, and a week later.”
Eventually the BMI rep said he would close the book on the claim.
“And then I got another call,” Culp said. “And this guy was nasty.”
The conversation included details of Culp’s operation, with Culp explaining that she doesn’t have to pay for playing the radio because she already pays Sirius and only has two speakers — below the limit established in law.
When she expressed her doubts about the caller’s claims, the BMI rep told her to check with the American Restaurant Association.
They confirmed “it’s legit,” she said.
She had some advice for others who might be caught up in the web: “Boy, don’t ever play a CD. They told me there’s a $10,000 fine.”
Culp said in the end she had to consider the economics of buying “three different licenses in case somebody might play a song.”
Culp had scheduled Erskine for another gig, this one for New Year’s Eve. “I called John and said, “It’s just not worth it. I’ve never been harassed like that, or felt more like criminal, for playing two hours of music.”
A new Krush
Two weeks ago Krush co-owner Joe McLaughlin just got his first call and letter, just six months following the grand opening of the new venue.
McLaughlin said when he received the phone call, “I didn’t know what they were talking about.”
“They just said they want money. I think it’s b.s. I think it’s just crazy to think that little bars and restaurants, especially these days, can pay this.”
“I have to pay between $300 and $400 for the band to show up. (Paying this fee) puts you out of the business. In the end it’s the public that gets hurt.”
“I’m trying to offer a free service — I don’t charge a cover charge.”
During the phone call, the representative from SESAC asked McLaughlin if he’d gotten a letter.
McLaughlin went to his mailbox, and sure enough, there it was. Among the more disconcerting passages in the letter is a comment that he could be fined for damages up to $150,000 each time an unlicensed song is played in his restaurant.
McLaughlin said he would take some time to research the issue before deciding on his next step.
Dunning, who has owned the Oasis for four years, said this is just the first step.
“They haven’t figured (Krush) out yet. They’ll figure him out, they’ll tell him what his capacity is, and what he’s doing — whether he’s doing it or not — like karaoke.”
Dunning added that the system is patently unfair. “I buy a cookbook written by a chef. If I use the recipe, do I have to pay the chef? Should I have to pay to make a Cobb salad?”
He said the entire system is fixed, pointing out that patents last 20 years.
Music, however, is different. “These guys have money, and lawyers, and they’ve arranged the law to where this extends forever.”
“Every time the law is about to expire, Congress re-approves it.”
He says the system is bought and paid for.
Everyone must pay
Bars and restaurants aren’t the only ones who must pay: the fees apply to dozens of broad categories, including funeral homes, music education and buses.
The City of Sequim pays approximately $700 a year to purchase the music licenses for the free musical performances the city sponsors each year.
City attorney Craig Ritchie says the system “is legal, it just isn’t very fair.”
“Local owners get hammered. But so did Muzak when they had music in elevators.”
He notes that the law allows the companies to assume you play their music. To avoid paying a general license, the city would have to keep exact records of each song played and correlate them with the songs owned by each company, then pay those individual fees.
It’s easier, and likely less costly in the long run, to just pay for a license.
While the money theoretically goes to the artists whose works were performed, that’s not the case. In fact the money goes to each PRO’s top artists of the moment.
That’s why, Ritchie said, many music writers are abandoning the system, saying “just send the money to us.”
“Exposing how these things actually work is good because the public won’t like it,” he said.
He added that the scare tactics of those selling licenses can be easily explained. “In my experience, the people who call are commissioned agents.” He said the more they collect, the more they keep.
One local bar owner asked to speak off the record, saying he is afraid of being targeted by the PROs. He said he’s been receiving the letters and phone calls for years. He doesn’t pay the fees, and doesn’t “engage at all” with those making the calls and sending the letters.
He encouraged others to do the same. Most of all, he said, “you don’t plead your case.”
He said if he’s ever required to pay the fees, he’ll simply stop providing music.
There isn’t an uproar in the press, he said, because “everybody is afraid to talk about this. They sweep it under the rug because they’re afraid of stirring up the beast.”
He added that “every few years they’ll sue a few bars to try to scare everyone.”
“They’re a leech. It’s one of those things where rich people write the laws to their own benefit.”
Others aren’t so sure that ignoring the requests is wise. Jerry Allen, who manages the 7 Cedars Casino, said he pays for the licenses. “I’ve been paying them for a lot of years.”
He said when he was first approached, soon after the casino opened, he “ran it past legal.”
They said pay it.
Because the fees are based on capacity, Allen pays plenty — “maybe $20,000 a year,” he said.
“It’s sizable, but the last thing I need is to run afoul of something that’s not in my best interests.”
On the other hand
Vincent Candilora, ASCAP’s executive vice president for licensing, says the bar owners are correct in saying that the PROs are becoming more active in seeking out license fees. He said a lot of that is simply made possible by the new social media.
His company has a 160 or so licensing managers — “some work at home, some work in their automobiles.”
The managers each work a specific geographical area.
“We send (the venues) a letter, then call, then if they don’t respond, the area manager will stop by and introduce themselves, ask if they’re received the information and explain everything.”
Candilora said “most of the time” the license fee is less than $10 a day. “The bartender probably makes more than that in the first 30 minutes.”
It’s more for larger venues, especially if they’re providing live music five to seven days a week.
Candilora, a former licensing manager, said he used to drive from town to town doing a physical check of local venues. Now, with the Internet and social media, “it’s relatively easy.”
“Almost every band has a website,” he said, “and the first thing you see is where they’re going to play.”
“It’s relatively simple to learn of establishments that are playing music.”
He said ASCAP “has been around for 100 years and represents about 8.5 million copyrighted songs.
He has no concerns about ensuring any particular venue is playing one of their songs. “If they’re performing music, they are.”
He says his company is the only one owned by the artists, with all profits going to them.
And he argued for the system. “They’re using someone else’s copyrighted material,” he said.
“Some people believe because it’s an intangible, it’s not real property,” he said. “It certainly is.”
“If I tell the beer guy, I’m not paying you, the beer truck stops coming.”
Dunning said the analogy doesn’t work because “the beer guy only gets paid once and for what he sells.”
He said the music PROs would require you to continue paying the beer guy “until 50 years after he’s dead so that his grandkids can enjoy the fruits of his labor.”
And, he added, “I have a choice in what beer I buy.”
Candilora said it’s understandable that neither the local bands nor the bars enjoy paying for the music.
“But,” he added, “it’s like any other cost of doing business. If your business doesn’t rely on it, I’d eliminate it.”
But that would almost certainly be a mistake, he added.
“If your customers like music, then there’s no question the decision to use music is the right one.”