The hidden cost of music

Restaurants, bars, and clubs pay to play.

Waiters and bartenders break the law every day in Seattle. You may not notice as you chomp on a veggie burger or slurp a microbrew. The victim certainly doesn't know it's happening. And the perpetrators themselves are usually completely unaware. But if the owner of the establishment isn't licensed with a performing rights organization (PRO), then that Nirvana or Kenny G song spilling out from the speakers is being played illegally.

The copyright law protects intellectual property, so when a song is played publicly, whether it's on a neighborhood tavern's jukebox or a funeral parlor's sound system or in the elevator at Nordstrom, the song's owner is guaranteed royalties. Of course, there's no way to monitor every tune that's played everywhere, so performing rights organizations oversee payment to the copyright holders (who pay annual dues of about $10). The two main guardians, the American Society for Composers, Authors, and Publishers (ASCAP) and the BMI Foundation, charge a yearly fee to restaurants, bars, and any place that plays music for anything other than private use. Naturally, those who have to shell out for the music aren't happy.

"I realize it's a necessary evil," says John Burreson, owner of the Old Town Ale House in Ballard. He pays hundreds of dollars to the two PROs for the right to play jazz and rock CDs, and to host live performances. (Music venues have to pay, even if their performers aren't members, in case a band plays covers of copyrighted songs.) Burreson is also one of the more accepting licensees; unlike many of his peers, he sees the ultimate point of the whole enterprise—that the artist gets paid.

Other local restaurant and bar owners, who wouldn't allow their names to be used because they're not properly licensed, think the whole process is a sham. "I do support the money going to the artist, but how much goes to the artist?" asks the owner of a popular Seattle bar.

The answer, according to representatives of ASCAP and BMI, is: "It depends."

The two organizations, headquartered in New York, don't operate for profit. Their primary purpose is to distribute royalties to the millions of copyright holders that each represents, though they do so after covering administrative and other costs; BMI estimates that 80 percent of what it takes in goes back to the artist or copyright holder. How much an individual receives depends roughly on how popular he or she is. A major act can earn thousands, but most aren't such fortunate recipients.

"I know artists who get checks for 17 cents a year," says Burreson.

The organizations in turn cite the obscure songwriters behind popular hits, people who rely on royalties because they're not the stars who made the songs famous. But the flip side is that many up-and-coming artists, even those who've recorded acclaimed albums, don't necessarily show up on ASCAP's or BMI's member lists. Local acts like the Murder City Devils and Damien Jurado may have their records played in coffeehouses and bars around town, but they're not going to receive checks. The PROs claim that they're diligent about signing up new talent, but a check of their Web site databases reveals that most up-and-coming Seattle acts aren't on board.

An owner of a bar that plays predominantly local CDs, and whose establishment isn't licensed, says that he'd resist paying the yearly fees if an ASCAP or BMI representative approached him. "I'd say, 'Fuck off,'" he quips. "I'd ask for a list and say, 'Fine, we won't play any of this.'"

Russ Lorenzini, a licensing manager in ASCAP's Northwest office, says this hostile reaction is typical. But usually, he adds, the bar or restaurant owner will capitulate when informed of the copyright laws and presented with a list of the millions of songs that the two PROs oversee. In the rare case when the proprietor fails to back down, a field representative will defer to attorneys who may seek a civil suit for copyright infringement.

Most of Seattle's bars and restaurants comply, either by paying ASCAP and BMI directly or by subscribing to services that pipe in music, such as AEI or Muzak, and that pay the annual fees themselves. Often, though, the owners wait until the PRO finds them before ponying up. That's because being legit doesn't come cheap. Between the two organizations, a small bar could end up paying hundreds of dollars annually. If the establishment also hosts live bands or if it's a dance venue, the price increases dramatically. BMI director of media relations Jerry Bailey says that the average annual cost for all restaurants is $400, but that the live-music fee can push that number up into the thousands; even airing music videos can cost extra.

The ultimate beneficiary when these organizations come to collect may be the artist, but local restaurant and bar owners blame the messenger for the high costs and unclear royalty process. "They're not a governmental organization, but they act like one," says one licensee.

Of course, there's an alternative. "If a restaurant doesn't play music," BMI's Bailey points out, "it doesn't need a music license."

 
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