WHY MUSIC LICENSES ARE NEEDED
United States copyright law allows a person buying a CD, MP3 or similar music delivery device to enjoy a non-public performance of that material (at home or in a vehicle). For public, “live” performances of someone else’s copyrighted music — including radio, TV, bands or Karaoke — non-exempt entities have a legal obligation to obtain and/or pay for permission.
Dozens of Ohio businesses have been sued and made to pay tens of thousands of dollars for playing music without proper licensing.
Broadcast Music, Inc. has sued hundreds of establishments across the country, including bars and restaurants in southwest Ohio, for playing BMI-licensed songs without a proper license. A Dayton Daily News search of civil court records shows that BMI Inc. — one of three main protective-rights organizations — usually settles out of court or gets a summary judgement and, in either case, collects thousands of dollars per violated song.
The lawsuits are part of a concerted effort by such organizations to enforce copyrights and could serve as a warning to other businesses illegally playing licensed music.
“The entertainment industry is in a frenzy not knowing how to protect – put fences around — their copyrights in the digital age, because there’s nothing really that can preclude a perfect digital copy,” said University of Dayton law professor Tracy Reilly, who teaches courses about real property and intellectual property.
The Pub at The Greene in Beavercreek paid more than $30,000 to BMI after a Southern Ohio United States District Court civil case for playing four BMI-licensed songs such as Van Morrison’s Brown Eyed Girl and Johnny Cash’s I Walk The Line.
“How many times do you go into a restaurant and hear them playing a radio station, for example,” said attorney David Rickert, who represented The Pub but could not speak directly about the case due to a confidentiality clause. “Technically, you need a license for that. I think it’s something people just aren’t aware of. Now they’re starting to crack down a little bit on it.”
Cadillac Jack’s south of the Dayton Mall is facing a similar suit for illegally playing BMI songs like Warrant’s Cherry Pie and Cash’s Ring of Fire.
“In this particular case, it only has to do with four instances one night in April regarding Karaoke,” said Richard Boucher, attorney for Cadillac Jack’s who would not speak in more specifics about the case.
Boucher said the formula for licensing fees as he understands it is about $5 for each possible occupant, so a 300-occupancy bar would pay about a $1,500 fee per year. But Boucher said BMI’s lawsuits generally seek thousands of dollars for each infraction plus attorney’s fees and court costs. “I’m really skeptical about how much of any of the money they recover actually makes it to the artist versus to the association and the lawyers,” he said.
In Hamilton, Jen’s Bar and Grill lost a summary judgement to pay $68,000 for 17 such violations after nearly two years of letters from BMI asking the bar to purchase blanket licensing fees.
Norton’s in Kettering was sued by BMI before it closed in October 2011 after owner Fred McGee said the sportsbar didn’t fit the neighborhood near Fraze Pavillion. The suit was settled out of court.
The Cobblestone Tavern in Fairfield was ordered to pay $25,000 for five April 28 violations after BMI claimed it sent 33 letters about licensing in three years. Court documents show the bar, if licensed, would have paid $8,176.95 for that three-year period and $2,065.50 annually.
Many businesses that play music or TV — not just bars and restaurants — could be subject to similar lawsuits if they don’t meet the legal exceptions for square footage or have music systems that include blanket licenses. BMI, the American Society of Composers, Authors and Publishers (ASCAP) and the Society of European Stage Authors and Composers (SESAC) are the biggest entities that license music and collect royalties for song rights-holders.
“It’s commonly policed,”Reilly said. “
I think there’s a perceived entitlement to a lot of non-copyright owners who say, ‘Why shouldn’t I be able to play this song in my bar?’ And the answer is because it’s not allowed by the Copyright Act. That is the exclusive right of the copyright holder.”
Attorneys and a spokesman from BMI would not comment about either the local pending or settled lawsuits, giving only this statement:
“BMI works with business owners using music by our represented songwriters and music publishers. The company’s goal is to educate business owners in order to broaden awareness of copyright, music licensing and songwriter music compensation rights. BMI only takes legal action as a last resort, following notifications and considerable periods of time, when a business refuses to purchase a license for the music being used.”
BMI’s claims to have distributed $898.8 million in revenues for its fiscal year ended June 30, 2012. The always-growing catalogue of BMI songs is more than 7.5 million selections, representing 550,000 songwriters, composers and music publishers.
“I can understand why a lot of folks don’t pay because they don’t feel like they have to or they don’t know who to pay and who not to, basically,” said Shanon Morgan, President of the Miami Valley Restaurant Association. “It’s a very, very confusing thing. I can understand why people get sued for it, I really do.”
Typically, BMI sends a representative into an establishment and has them record songs being played. A number of lawsuits provide four examples of BMI-licensed songs being played. Once that information is relayed to BMI, its attorneys usually follow up by trying to collect blanket licensing fees. If that’s not successful, BMI files a lawsuit.
Documents show BMI asked Jen’s Bar and Grille to buy a music license as early as July 2010 and each month thereafter until April 2011 and several more letters until a May 14 letter sought $2,816.24 for two year’s worth of back licensing fees. A May 16 letter indicated the case was sent to BMI’s attorneys.
Jennifer Hill, listed in the lawsuit of Jen’s Bar and Grill, did not return multiple messages seeking comment.
In an Upstart Business Journal story from 2010, Max Sorensen, senior vice president of the Ohio Licensed Beverage Association, said bars can negotiate, but they can’t avoid paying license fees. “As far as I know, they’ve never lost a lawsuit,” Sorenson told the publication.
The Pub’s $30,000 bill to BMI illustrates the music industry’s efforts to collect money for their clients.
“A $30,000 hit is a good hit to anybody out there,” Morgan said. “Some, it’s detrimental to them. For some restaurant or bar owners, it can put them out of business.”