You have been told that you need to pay for the music you play in your business, but you just can't seem to force yourself to comply. What happens next? How much will this decision cost you?
It's likely that there are dozens or even hundreds of small business owners just like you, asking these same questions as they lie awake at night. The answers to those questions can be unpleasant.
Performing rights organizations (PROs) collect the fees required when businesses play music. If those PROs are not given the fees they require, financial consequences can be severe. Perhaps by giving a few examples of the penalties other companies faced, we can help you see why getting the proper license is so important.
How Are Fees Collected?
There are some business owners that reach out to PROs with information about their businesses, and they set up agreements before the business opens their doors to customers. But there are some businesses that never reach out to a PRO. When that happens, PROs can send out scouts to detail how a business is using music.
That happened to a Washington business, according to the Peninsula Daily News. On one night in 2017, a private investigator sat inside a bar and wrote down the names of the songs heard. The business owner didn't know the investigator was there. She only found out about the visit when the lawsuit arrived. Soon after, the PRO filed a lawsuit for $3,000 to $120,000 for those four songs alone.
A lawsuit like this can seem like an overreaction, but it is important to know that PROs are protected by copyright law. As a lawyer writing for Law 360 points out, the copyright holder is not required to send a cease-and-desist letter and give the company time to change course. The very first time a PRO might reach out to a company could be through a lawsuit, and that is legal.
Even though PROs are not required to reach out to businesses, they often do so. For example, in a press release published by ASCAP (a major PRO), the company points out that they reached out to a set of businesses named in a lawsuit multiple times, and when no response came back, they chose to go to court.
PROs in Court
It is not at all uncommon for PROs to take businesses to court. In fact, according to USA Today, BMI (another PRO) sued more than 160 businesses in 2015 alone. This BMI lawsuit resulted in fines of $24,000 for playing four unlicensed songs. The PROs are aware that the law is on their side, and they are not afraid of using the law to get the financial support the law entitles them to.
In one case from 2015, a restaurant owner in New Jersey was sued by a PRO for the use of four songs played one night. According to the New York Post, the damages awarded in that case (which the restaurant owner lost) was $24,000. Since the restaurant owner lost the case, he is required to pay attorney's fees for the PRO, which came to $8,200.
In an article published by The Plain Dealer, a PRO representative claims that lawsuits are a last resort, used only when businesses will not comply. Even so, it could be a smart strategy. A PRO representative could document each:
- Phone call
- In-person visit
Each outreach could be used to prove that a company is willfully ignoring the law. That could be evidence used in court, and it could lead to bigger fines for the business.
Don't Take the Risk
Ignoring the law means playing with fire, and it could have severe financial consequences. There is a better way. At Cloud Cover Music, we have relationships with the PROs, and we have extensive libraries that contain the songs you want to play. We can give you access with one small charge, so you can rest easy knowing that you are in compliance with the law. We can get you set up in minutes. Call us to find out more.
- ASCAP Sues Peninsula Bar for Copyright Infringement. (February 2018). Peninsula Daily News.
- Using Music in Your Work: Copyright Tips for Companies. (July 2017). Law 360.
- Venues Refuse to Pay Songwriters While Profiting From Their Music. (February 2018). ASCAP
- BMI Song Lawsuits Make Rounds in Jersey Bars. (June 2015). USA Today.
- Restaurateur Won't Face the Music After Losing Copyright Suit. (June 2015). New York Post.
- ASCAP Targets 9 Bars Nationwide for Music Licensing Infringement, Including Willoughby Brewing Company. (May 2017). The Plain Dealer.