ASCAP, BMI and SESAC's Harassment of Small Coffeehouses is Bad Business

Let me make something very clear at the outset of this post: Both my husband and I are songwriters and artists and as such have a vested interest in license and distribution royalty rights--in fact, it makes us absolutely giddy to be paid for our work. That being said, I find the harassing, heavy-handed tactics employed by ASCAP, BMI and SESAC against small, independent cafés to be not only petty and tiny-minded but also shortsighted and just plain bad business.

ASCAP (American Society of Composers, Authors and Publishers), BMI (Broadcast Music, Inc.) and SESAC (Society of European Stage Authors and Composers) are the three main licensing agencies, representing composers and music publishers worldwide. While few if any would argue against the positive need for their existence, they have become monopolistic bullies under the guise of unionization.

KING 5 Television in Seattle, WA reported on Monday about the issue of public broadcast of music CDs and digital music in cafés, highlighting two locally owned coffeehouses, Caffe Bella, with only one location, and Diva Espresso, which has six shops. While the reporter did not make it clear as to whether Diva Espresso was targeted, the owner of Caffe Bella was, forcing her to make a choice between paying hundreds of dollars in licensing fees to the agencies, playing commercial radio or going with satellite radio. She chose satellite radio, with fees paid automatically, at $150 per year, a hefty amount for a single shop to carry while working mightily to keep afloat.

Again, I have nothing against artists getting paid and I wish more of us actually did receive fair compensation for our work, but the amount of time, effort and money these huge licensing agencies spend on tracking down small, independent businesses is simply a waste. Not to mention the animosity they create by threatening legal action against coffeehouse owners who, in a good year, see a mere 1-2% profit margin. The fines for not paying licensing fees can be astronomical, reaching into the ten of thousands of dollars and driving people right out of business. In sharp contrast, ASCAP alone raked in $863 million in revenue last year.

The small café is most often the best friend of songwriters and musicians, giving play to those who rarely if ever get airtime on commercial radio stations and introducing their work to a wider audience. This is free publicity, free marketing and free advertising, the real value of which is undeniable. ASCAP, BMI and SESAC not only represent big artists, but hundreds of thousands of struggling, largely unknown artists. It is these artists, making up the majority of the agencies' membership, who stand to lose the most when their leaders tread the path of harassment and intimidation of small business.

So what is the solution? My suggestion is that members of ASCAP, BMI and SESAC exercise their own muscle of sheer numbers to convince the agencies' leadership that their heavy-handed tactics against small, independent coffeehouses and other businesses is not in their best interest and is in reality doing more harm than good. Perhaps a compromise can be reached in which businesses that operate less than a certain number of locations--let's say six--can receive a waiver from the agencies to play CDs and digital music free of charge. In exchange, the businesses would publicly display detailed information about the music being played, complete with composing and publishing credits, and where the music can be purchased.

The main goal of ASCAP, BMI and SESAC is to obtain fair compensation for work done by their members. In tandem with working to make sure that large businesses, radio stations and other broadcast mediums pay their share of fees, the agencies' leadership must also recognize the value of marketing and advertising to the public so that their members can grow an audience who will purchase their material. But if the agencies continue to cut off one of the best avenues of marketing and advertising, one for which neither they nor their members pay a cent, they have lost sight of their goal and the negative consequences of that rest solely on their shoulders.

It's time to work together, people, for the benefit of all.

Post originally published by Milwaukee Specialty Food and Coffee.

Views: 1436

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Comment by Dennis on March 21, 2008 at 7:51am
sometimes one step back is worth 2 steps forward!
Comment by Mary Dally-Muenzmaier on March 21, 2008 at 7:26am
Sounds good, Dennis. In my experience, Canadians often have some of the best ideas!

I'm glad you brought up the issue of how the system of licensing is financed. The original intention was to have it be based on fees and now they are relying more and more on lawsuits and big fines to support the system. Making compliance easier and more attractive is the better way to go.
Comment by Dennis on March 21, 2008 at 6:28am
Interesting diologue! I'm in Canada and I kind of like the way its done here. To play music in an establishment its annual fee of aprox. $320. or so. For an event such as banquets/weddings/group events where a DJ is employed its a $51 fee per event. The DJ's are certified and pay a $1000. annual fee for using licensed music (cd's, downloads, etc). I think its affordable enough for the small guys and it easy compliance for everybody. It is probobly more money in the hands of the artist in the end because of the ease of compliance......(more people paying small amounts as opposed to a few people paying larger amounts through fines.....and the cost of enforcement is lower without the need for lawyers/enforcement officers/etc). Anyway I think it works well
Comment by Mary Dally-Muenzmaier on March 20, 2008 at 3:16pm
Agreed!
Comment by Brian Bergman on March 20, 2008 at 12:54pm
Sad to say, but it's a reflection of the culture as a whole rather than just ASCAP, etc. I've had too many personal experiences with negative reactions to personal requests to do "the right thing". People on both sides are to blame for this knee jerk reaction...and the use of the word 'jerk' is appropriate and true on several levels. Jason gave us some great info about stipulations in the rules and exclusions.

There is always a way to do the right thing. Sometimes it just takes some time and thought, just like everything in our business.
Comment by Mary Dally-Muenzmaier on March 20, 2008 at 10:27am
All good thoughts, CC!

My interest in taking up this issue is based on what I see to be a disturbing knee-jerk reaction by some powerful players within the music industry to bully, intimidate and threaten with people with legal action instead of communicating with small businesses and consumers in a civilized manner in order to come to a satisfactory solution to the problem.

I believe that these negative tactics are wholly incompatible with productive dialogue and lead not to cooperation but rather to alienation--a state of existence that can have no real positive outcome.

Feel free to add more of your opinion.
Comment by Brian Bergman on March 20, 2008 at 9:39am
I'm definitely siding with Jason on this one. I understand what you're saying, Mary...but right is still right and wrong is still wrong. That's the bottom line. If it's about exposing a local artist or "underplayed" artist then another choice you have is to write them directly and let them know what you're doing. You can get a release from them personally if they're so inclined.

I am a professional musician and the checks I receive from ASCAP help to put food on my family's table. Choosing to not pay the fees is not just fighting against "the man", it's taking money from the pockets of struggling artists everywhere...myself included.

If we're talking profit margins and $150 is going to break your café then that's a business issue, not an ASCAP issue. It's not their fault. You either pay it, or don't play music. You can't choose to not pay for coffee beans because it eats into your profit margins. It's a cost of doing business. So is music. If it's important, then it's worth it. my 2¢.

There's a lot more to this than my short post, but this is my gut. Thoughts?
Comment by Mary Dally-Muenzmaier on March 20, 2008 at 6:25am
Hi Jason,

Thanks so much for contributing this info! Always good to have a lively discussion. :)
Comment by Jason Duncan on March 20, 2008 at 6:08am
Hey Mary, thanks for the post. I know this is an area, along with downloading illegally from iTunes and how the RIAA is handling it, that is tough for people. I have to say, and maybe I am on my own here, that I agree with the companies. It is tough to view it this way but to me, a song is just like a product at Best Buy or other. I will not walk in and take an appliance to use in my bar or home without paying for it.

At any rate. I understand - totally - where you are coming from. The good news, they are doing a few things to help. Here is a bit from ASCAP's page...

"A food service or drinking establishment is eligible for the exemption if it (1) has less than 3750 gross square feet of space (in measuring the space, the amount of space used for customer parking only is always excludable); or (2) has 3750 gross square feet of space or more and (a) uses no more than 6 loudspeakers of which not more than 4 loudspeakers are located in any 1 room or adjoining outdoor space; and (b) if television sets are used, there are no more than 4 televisions, of which not more than 1 is located in any 1 room and none has a diagonal screen size greater than 55 inches.

An other establishment is eligible for the exemption if it (1) has less than 2000 gross square feet of space; or (2) has 2000 or more gross square feet of space and satisfies the same loudspeaker and television set requirements as for food service or drinking establishments.

The new law should greatly reduce disputes as to whether particular radio-over-speaker and television performances are entitled to the exemption. And, of course, the law continues to require that public performances of copyrighted music by other means such as live music, records, cassette tapes, CD’s background music services, video tapes or laser discs require permission obtained either from the copyright owners or from their performing rights licensing organizations."

The good part is that they have raised the amount of space you can have and be exempt. That should help many smaller cafes.

Again, I think this is a tough area. While I agree with what the groups are doing to protect their "property", I also agree with what you are saying.

Thanks for bringing it up.
Comment by Jason Dominy on March 19, 2008 at 11:49am
I agree completely. I, too, faced the wrath of these guys, before they finally backed down, but they are a vigilant bunch, for sure. I worked for a small independent near me here in Charlotte as they were going through it, and finally had to pay up, somewhere around $1500, which for a shop their size really is alot of money in comparison to what they profit. I don't think they'll ever change, though, they make too much money to care.

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