Music is expected at Toledo’s bars and restaurants that people give little thought to what venue owners go through in order to legally provide live or recorded tunes. While live shows can draw in crowds, and recorded music provides a musical backdrop to a night out, bar and restaurant owners pay a price in order to play that music in their establishments.
Publishing rights organizations charge annual fees to any establishment that plays music written by organization members. The fees provide income to the musicians who composed the songs. Because songs are copyrighted material, anyone who transmits them publicly needs to obtain performance rights from the copyright holder, or their representative, the publishing rights organizations.
Venues can be charged performance rights fees by more than one licensing organizations that each charge hundreds of dollars a year. The total can add up quickly. Payment companies like the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc. (BMI), and the smaller, less prevalent Society of European Stage Authors (SESAC), has left some Toledo bar and restaurant owners cash strapped. “You can try to fight those guys off, but they can come back and threaten to sue you and they can win, because they apparently have the law on their side,” Phil Barone, owner of Rosie’s Italian Grille, said. “I just think it seems like it’s a little bit of a scam.” ASPAC distributes these fees to their members as royalties after deducting operating expenses (currently 11.3%). Although, there are many factors in determining how much is allocated to each member. Some music is obviously played more often than others.
Bar and restaurant owners are required to pay music licensing companies if they play any copyrighted music publicly in their establishments, whether it is recoreded and played through an per iPod or a jukebox, or if they have live shows that include performances of copyrighted songs. The bands that perform cover songs do not incur any fees from licensing organizations, but venues do not have to pay for the performance of original music.
ASCAP
Although ASCAP is fully aware that many venue owners across the country concur with Barone, the 100-year-old company is steadfast in its mission to provide payment to its members. Vincent Candilora, the Executive Vice President of Licensing for ASCAP, explained that the fees are in place to help songwriters receive compensation for their work. After ASCAP deducts its own operating expenses from the money collected, which is currently 11.3 percent, all of the fees are distributed to its members as royalties.
“What we’re licensing is the public performance of copyrighted musical composition,” he said. “So the songwriter is the party that we are licensing for, they created the song, it’s their property, and when someone uses somebody else’s property, normally you need their permission and normally you pay them something.”
There isn’t one standard performance rights fee, instead the specific fees collected from each establishment vary based on size and the kind of publishing rights required. According to Candilora, ASCAP charges based on the location’s stated occupancy per the fire code, as well as the way music is transmitted in each venue. Those locations that only play recorded music pay a smaller fee than those that play live music. And for those establishments that play both recorded and live music, ASCAP offers a discount on the fee for recorded music. Other factors play into each bar’s specific yearly fee as well, including the number of nights per week music is performed, and whether or not a cover is charged. Candilora said that the average fee paid equates to $600 a year, which gives the venue free reign to play any of ASCAP’s 8.5 million songs, an agreement he believes is very logical.
“For the most part we’re talking about $1.50, $2 a day. So when I hear places say they can’t afford to use music in their establishment I kind of chuckle to myself, because the bartender probably makes more than that in tips in the first thirty minutes of working,” Candilora said. “And others say, well I don’t understand why I have to pay for music, but it’s not their property. If you want to play music for free, write your own music.”
After collecting the yearly fees from venues across the country, Candilora explains that they look at various factors are used to determine how those fees are allocated to ASCAP members. “Now with today’s technology, we electronically listen to around 2500 radio stations around the country 24/7 365 days a year, so we have an incredible amount of information on what music is popular and what’s being used by radio. And then we use that as kind of a proxy for what’s being played in bars and restaurants,” he said. Musicians can also report to ASCAP where they have heard their songs played or performed, and the company surveys and collects reports from background music services to further round out the gathered information. “We try to get the best data we can, and that’s what we base distribution on,” Candilora said.
Regardless of ASCAP’s explanation of why bars and restaurants pay their annual fees, the owners of these establishments still feel the pinch. And Barone explained that because he has to pay both ASCAP and BMI hundreds of dollars a year, he has less money that he’s able to allocate to the musicians who actually play in the bar. “I try to talk them (the licensing entities) down a little bit because I don’t have music every night,” he said. “But I’m actually cutting out most of the music, because by the time you pay the musicians, which they deserve … and by the time you pay ASCAP and BMI, is it really worth it? If there was less money going out I think it would be an easier decision to keep the musicians. But it’s a tough decision.“
With bars shying away from keeping live music in heavy rotation because of the high costs of paying performers as well as music licensing companies, musicians looking for performance venues are hit with troubles. Matt Beier, from local cover band The Rivets, said that although he understands the need to pay the creators of songs, a problem arises when that keeps bars, restaurants and coffee houses from being able to pay local musicians.
“It’s complicated for me. I respect that the artists who perform and write music are entitled to get their due for it,” Beier said. “But it’s expensive to provide live music. Paying musicians on top of having to pay places like ASCAP is a real problem.”
MUSIC DRAWS A CROWD
But when it comes to charging venues for their use of live or recorded music, Candilora said it really benefits the establishments because they are able to keep a constant stream of music going, and not have to greet their customers with silence. “It’s the power of music. Music will draw a crowd,” he said. When it comes to choosing a place that has music playing, or one that is silent, Beier agrees that the availability of music is much more appealing to customers. “It is markedly different to walk into a room that has pleasant music playing above the hum of the equipment,” he said. “It feels like you’re walking into a storage facility if you just hear a refrigerator buzzing. You can hear other people’s conversations and it’s very uncomfortable.”
The ability to listen to music inside an establishment not only keeps customers happy and coming back but, frequently, it’s what attracts them to a location in the first place, especially if the venue is new and just starting to make its mark.
One Toledo bar-owner, who requested to remain anonymous in order to protect his identity and the identity of his bar from music licensing organizations like ASCAP and BMI, said that without music his business would immediately suffer.
“It’s kind of a scary thing because you want to book bands, and I book bands every night,” he said. “If I got rid of that element, it would take a lot out of the business. But at the same time I can’t really afford to pay these different companies hundreds of dollars if not thousands of dollars a year. It’s just preying on my business.”
This particular bar owner is currently not paying any fees to ASCAP or companies like it. Taking a large chunk of money out of his establishment each year would make it harder for his small bar to thrive. Although he has so far avoided any issues with music licensing companies, it’s a fear that constantly plagues him. “It’s just one of those dreaded things that kind of hangs over you, like you don’t know if the guillotine is going to fall and get you,” he said. “Every dime counts when you’re just starting out, so a dime diverted to any other expense can be cataclysmic.”
This bar owner not only fears the repercussions these fees could have on his own establishment, he fears how they will affect the local music scene and local businesses in general. “If you have things that are policed it threatens local musicians by taking away their venues and you’re threatening local businesses by taking away their money,” he said. “They’re just trying to take my money. Of course I want them to go away.”
Another local bar owner offered his thoughts on music licensing fees, but only under the promise of anonymity as well. After being advised by attorneys that the fight was not winnable. This bar owner begrudgingly agreed to pay both ASCAP and BMI their yearly fees.
“I think it’s basically extortion, at least to the level that they take it,” he says. “They try to gouge you any way that they can. And they have courtroom precedent to basically push little guys around, and that makes it tough. The fees are relatively subtantial for little places that only have music a couple times a week.”
And just like several other bar owners in town, he is now faced with the decision to continue paying ASCAP and BMI or to forgo the use of their licensed music. “It’s a constant struggle to decide whether to continue to pay them or to just discontinue live entertainment,” he says.
DAY THE MUSIC DIED
At least one downtown Toledo establishment is enjoying a break from paying the yearly music licensing fees. Manhattans, in Toledo’s Uptown District, no longer features live musical entertainment, which means owner and general manager Zach Lahey no longer has to pay any performance fees. And although he decided to do away with live music in order to focus more on the restaurant’s cuisine, he said cutting music licensing fees from the budget was a plus. “It didn’t really have an impact on our decision, but it was a nice little bonus to not have to pay these fees” Lahey said.
Lahey estimates that in the 11 years those that Manhattans has featured live entertainment, he’s spent over $10,000 just on music licensing. When ASCAP, BMI and SESAC first contacted him to collect fees, he was put off that they threatened legal action and penalties if he didn’t license music through them.
“It’s hard being an independent business, and the way they went about it with threats and strong arming was really a disincentive to being a live music venue,” he said. “If the cost was reasonable, like 30 bucks a year that wouldn’t be a big deal.”
With live music and the ability to play recorded music that is protected by licensing organizations, Lahey had to seek out other options to keep Manhattans from going silent. He settled on working with Madison Avenue Collective, which provides satellite radio to the restaurant. Manhattans now has access to approximately 30 different satellite channels, and although unpopular songs can’t be skipped, licensing fees were included in the cost of the satellite transmissions, so Lahey can breathe easy.
But with ASCAP set to celebrate its 100th anniversary this February, and BMI entering its 75th year in business, it doesn’t appear that music licensing fees will be going away anytime soon. And although many bars are cutting down, or stopping live music all together, Matt Beier is sure that the local music scene will still survive. “Musicians will always keep rocking,” he said.
