There are a few options for businesses to legally play music on premises, whether that business is, say, a nightclub, restaurant, or hair salon. An in-store music service like Mood Media (formerly Muzak) can supply channels of pre-cleared tunes for a subscription fee. These services are like radio in most cases, as the business won’t be able to choose any particular song that’s played. The business could also just play music by friends and enter into a direct licensing agreement with each songwriter. That would be a huge hassle and dramatically limit the available catalog.
The most popular option is to pay for the compulsory licenses offered by the performance rights organizations – PROs like ASCAP, BMI, and SESAC. These licenses allow the business to play songs represented by each PRO. A few factors determine the fee, such as venue capacity, and the business usually obtains a license from all the PROs. For one thing, it’s a lot of work to determine which PRO represents a song the venue wants to play, and the music customers would like to hear are distributed amongst all the rights organizations. Paying fees to all creates full coverage and the freedom to play whatever you’d like.
A venue’s requirement to get a compulsory license is one of the most misunderstood aspects of music publishing. The venues themselves especially misunderstand this requirement. I’ve spoken to many business owners who don’t understand why they have to pay for such a license. The phrase “it’s nothing but a shakedown” is used on more than one occasion. But the simple fact is this: if your business is profiting off of someone else’s music – and playing music to enhance your business qualifies – then the songwriters should get a cut of some sort.
There is another argument made by business owners that I find harder to dispute. Nightclub owners often argue that the fees they pay to the PROs aren’t going to the songwriters whose songs they are playing. This statement is often true. Presently, the PROs have no way to track the songs played in their licensed venues. The businesses could submit a list of all the songs played in a day, but no one is going to do that. Instead, the PROs pool the collected fees and distribute the royalty to songwriters they assume are the ones getting played the most. In other words, popular songwriters, for the most popular songs.
I can empathize, as I DJ’ed hundreds of times exclusively at underground clubs and very few of the songwriters I played (if any) ever saw a penny. I’ve heard tales of clubs in some territories tackling the problem by having the DJs write down all the songs from their sets. I guess it’s the thought that counts, but this is obviously an unreliable and haphazard solution.
There’s a change coming, though. Advances in audio recognition are making song tracking in venues possible. Using technology popularized by the likes of Shazam, songs get identified and, in turn, the appropriate songwriters paid. From a story in Complete Music Update:
Collecting societies PPL and PRS For Music have confirmed that they are expanding a pilot project to test the use of music recognition technology in clubs, pubs, bars and hotels to monitor what music is being played in those spaces.
Peter Marks {CEO of UK clubbing chain The Deltic Group} has welcomed the pilot, saying: “Music is the very heartbeat of our business and it’s in our interest to see that talented artists are rewarded for their creations. With online streaming and other digital technology, it’s increasingly difficult for songwriters and musicians to make a living from their creations, so anything we can do to help and attract and support the latest local talent has to be a good thing”.
I believe GEMA in Germany has also been testing this out.
The ramifications are enormous and welcome; accurate tracking in venues (and eventually across other outlets such as radio and sporting events) will create a great benefit for non-mainstream songwriters.
It remains to be seen if US PROs might look to adopt this technology. The fact that there are multiple PROs in this country may prove to be a stumbling block. A device that listens, identifies songs, and sends data to the PROs would have to be installed in every participating venue. It would be a hassle if each PRO had its own device for every business to install. Could they agree on one shared device? Part of me thinks it unlikely as the US PROs are fiercely competitive. That said, the recent news of ASCAP and BMI collaborating on a musical works database gives us a glimmer of hope.
The US is often the country left behind when it comes to advances in rights management. Let’s hope our industry is proactive in embracing this technology solution to a longstanding problem.
Interesting and relevant thank you