Business & Economy

BMI Blues: Royalty fees stifle music venues in Vermont

BMI logo. Wikipedia.

BMI logo. Wikipedia.

Sounds of silence will echo from the wells of a number of Vermont’s live music venues this year, as the cost of complying with copyright licensing fees has proven too high for rural session venues and small-town coffeehouses. Performance rights organizations ASCAP and BMI have engaged in intense outreach across Vermont, demanding annual licensing fees in the hundreds of dollars from venues including tiny coffee shops and nonprofit festivals. A number of venues have discontinued live music over the last year rather than pay the piper, but BMI claims its licensing services help support local Vermont songwriters.

BMI, or Broadcast Music, Inc., is in the business of collecting copyright licensing fees from radio, television, Internet, jukebox owners and live music venues and redistributing those funds back to music copyright owners as royalty payments. BMI registration for songwriters is free, though registering artists must sign a two-year contract and agree not to sign on to BMI’s rival organizations, ASCAP and SESAC, during that period.

BMI claims that 86 cents of every dollar paid to them goes to their artist members as royalties—though their artist members include huge music publishing companies as well as individual songwriters. ASCAP and the less-visible SESAC operate on similar models.

Sundays will never be the same

BMI first called the Shoreham Inn in November 2011, when the inn was closed for the season. They called again in spring of 2012 and advised owner Molly Francis that a “scout” assigned to Vermont had told them the inn had live music. That live music consisted of twice-a-month Sunday afternoon traditional Irish music sessions — ad hoc gatherings of flutists, fiddlers and bodhran players crammed into the inn’s living room sharing the classical pieces, dance tunes and historical ballads that punctuate Irish culture.

BMI mailed the Shoreham Inn a set of licensing forms, demanding that they be returned with payment immediately.

“They were quite aggressive and harassing,” Francis says. “BMI had already filled out the form, making assumptions about how many people we have here and how often we have music. They said a $500 annual licensing fee was due based on those assumptions.”

“I felt like I was being bullied,” Molly Francis says. “I completely understand that artists need to get compensated. But it was the heavy-handed nature of their approach, they refused to listen.”

Fellow restaurant owners warned Francis that BMI would be “relentless,” and that if the inn paid BMI, they’d also have to pay the two other major music rights organizations, ASCAP and SESAC. “So that would be $1,500 a year,” Francis says. “I talked to the musicians at the session, and they assured me that everything they played was traditional and in the public domain, not covered by copyright. But BMI was insistent that if you have live music you need the license.”

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Molly and her husband, inn co-owner Dominic Francis, decided to discontinue hosting the traditional session, expressing regret over abandoning an opportunity for community bonding that also helped bolster business on quiet Sunday evenings.

“I felt like I was being bullied,” Molly Francis says. “I completely understand that artists need to get compensated. But it was the heavy-handed nature of their approach, they refused to listen.”

The loss of the Shoreham session has had an impact beyond the boundaries of the small Addison County town. Rob Hale, chair of the Burlington Irish Heritage Festival, says as an organization trying to keep our musical heritage alive in Vermont, he finds it very painful that traditional Irish music sessions like the one in Shoreham would be shut down over licensing fees. “We feel that loss immensely,” he says. Last year, the Burlington Irish Heritage Festival paid more than $100 in event licensing fees to ASCAP after being “badgered” for three or four years. The fee was a sizeable chunk of the small group’s annual budget.

It’s over at the Three Bean Café

When the Three Bean Café and Bakery in Randolph listed their Thursday dinner-and-live-music events in Seven Days, both ASCAP and BMI hit them up for licensing fees. BMI offered their cheapest coffeehouse “blanket license” of about $350 a year, which would mean $1,000 in licensing fees annually to the three royalties organizations, BMI, ASCAP and SESAC.

Rex Bence, co-owner of the Three Bean, says asking a 15-seat café with once-a-week music – and which already directs performers to play all original or public-domain pieces — to cough up an extra grand a year was not feasible.

“It makes sense that writers should be getting something, but BMI is inflexible in their rates,” Bence said. “They assume a minimum of 50 people seated 3 times a week.”

BMI doesn’t apparently understand the fiscal realities of small-town Vermont venues. At the Three Bean, clearing $25 after a five-hour Thursday night shift is considered a good night.

“They threaten you to take you to court,” Bence says. “We argued with them for a year and a half and in the end we shut down the music. They said even if the performers play all original or traditional music that they own certain chords and chord progressions and we can’t guarantee our performers won’t play those. I said what, did Mozart sue Beethoven?”

The threat of litigation, more than the requested licensing fee, was the day the music died for Three Bean.

“The bottom line is, if they take me to court, I don’t have the money for a lawyer,” Bence says, noting that he’s been talking to other small venue owners about the possibility of suing BMI in a class action suit. “I’d like to challenge them but I can’t afford to do it myself.”

Discontinuing the Thursday evening music has taken a small chunk of direct business away from the Three Bean, but its larger negative impact is difficult to assess. Live music enhanced the social scene in a small town and provided the café with exposure, introducing new customers who would return for coffee or lunch on another occasion.

“It’s really harmful to rural communities,” Bence says. “I’ve been hearing now that people are afraid to play in the summer farmers markets because of this.”

Don’t take a slice of my pie

Ari Surdoval, director of corporate communications and media relations for BMI, denies that there has been any special focus on Vermont in their licensing outreach.

“Often when people get a letter from us they feel singled out, especially a small business owner,” Surdoval says. “But BMI goes to great lengths to tone that down. The vast majority of songwriters we represent are not performers, they are the smallest of small businesses, so we are very sensitive to that.”

“BMI never shuts down music,” Surdoval says.

Federal copyright laws require business owners who want to use music as part of their business to get a license from the people who own that music. Working through rights organizations like BMI rather than buying individual licenses from every songwriter or music publishing house whose work is played actually makes life easier for venues, Surdoval asserts, while assuring that artists get their slice of the pie. Compared to the cost of liquor licenses and the other expenses of running a bar or restaurant, a music licensing fee of a dollar or two a day is not a large expense relative to the profit.

“The use of music in a business is a business decision,” Surdoval says. “It helps drive the purchase of coffee, alcohol and food. If the music wasn’t driving business, the business owner wouldn’t have it.”

Surdoval bristles at the suggestion that BMI licenses stifles live music at local venues. “BMI never shuts down music,” he says. “We try to license at the lowest possible rate. Over and over again people swear to us up and down that they are only having original music or traditional music, then you go on their websites and they are not only booking cover bands, they are booking tribute bands that dress and talk like artists whose work is protected by copyright law.”

Even traditional or folk music is likely covered by copyright protection, Surdoval says. “People will say they only have public domain folk music, and I look at their setlists and they are playing the works of Earl Scruggs, a longtime BMI artist. Or they have traditional Irish music and play the work or arrangements of Tommy Makem. ”

Of the 650,000 business venues BMI licenses annually for public music performances, disputes over fees are a statistical anomaly, he says. Most view it as a cost of doing business.

Over 650 Vermont songwriters and music publishers received royalty payments from BMI last year, Surdoval says. “It’s not us extracting money. That money goes back to the writers and into their communities for a cup of coffee or groceries.”

Sing us a song

Revered Vermont songster Pete Sutherland has been a registered BMI performing artist since the early 1980s.

“At the time, ASCAP was going after licensing fees from all the small venues around, so everyone here joined BMI,” Sutherland says, noting that he’s never had second thoughts about his association with BMI. “It’s worked well. They send me quarterly reports and royalty checks.”

While those checks have been modest, they have also been regular, which is a boon to any musician trying to make a living.

The ability to make a living from one’s creative work is precisely the reason that copyright protection is enshrined in the U.S. Constitution, and why organizations like ASCAP and BMI can provide a valuable service to musicians—if, critics say, they don’t shoot themselves in the foot with over-exuberant collection techniques.

“I understand it from either perspective,” says Dave Keller, a swiftly-rising original soul-and-blues artist from Montpelier. Keller is a BMI-registered performer who played regularly at the Three Bean Café. “People should pay to hear my music. But it’s a matter of size and scale. A big club like Higher Ground, sure. But when you’re a small venue like this… They really should have a higher threshold for charging. It hurts musicians like me.”

Keller is also content with his BMI affiliation, though he notes that “artists at my level won’t see a lot of money from BMI.”

Keller’s new CD, Where I’m Coming From, is receiving increasing radio play, so he has hopes that those quarterly BMI checks increase. Still, he is concerned that the three performers’ rights organizations function almost like a monopoly, setting their rates without feedback from venues and performers. “The organizations have lower rate for coffee houses that they say is reasonable, but who decides what’s reasonable? All these small venues are good seed venues for the larger venues – this is where developing artists play.”

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Cindy Ellen Hill

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