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.”

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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  • Dean Pierce

    Thanks, Cindy, for this timely article. Coincidentally, just this afternoon I had reason to tell a young performing artist about ASCAP, BMI, and SESAC (this musician has concerns about his songs being performed by his former band). But, I hadn’t mentioned some of the impacts these organizations appear to be having on small venues. I will now. I love local live music. I hope a reasonable solution (ie., fees appropriate to the size of venue) can be found soon.

  • We need to reform copyright laws and return to the 5 years and done model for all written works – you should not be able to copyright a live performance. The we need protection from the likes of Pat Leahy and his big performance buddies who he will always go to bat for.

    Our economy has been reduced to a pathetic mess of money creation and “intellectual” property that all have to be protected by any means possible – and both venues are trashing our present and future.

  • Margo Howland

    This is outrageous. Reform is certainly needed. What’s next, church choirs?

    • Seth Hopkins

      From your keyboard to the music industry’s ears: there already exist at least two licensing bodies (CCLI – Christian Copyright Licensing International – is the biggest) who do for religious music exactly what BMI and ASCAP do for secular music.

  • Brent Jarvis

    The two songwriters, Earl Scruggs and Tommy Makem who are presented as examples of authors who should be paid, are both dead…And the people who receive the monetary benefits are their relatives, who probably couldn’t write a song to save their lives…

    • Bryan Smith

      And righfully so

  • Steven Farnham

    Remember Glenn Sturgis’ battle with “Brown” (UPS)? That was a similar situation, where a corporate bully was trying to extract money from someone where its claims were tenuous at best. Sturgis fought and won, everyone in the community was on his side, and we all benefit from his victory and success.

    In this new battle with BMI, I think what is lacking is courage. Remember speakeasies? Well maybe it’s time for “singeasies.” Just play the music already! When the BMI gestapo arrives to shut the place down, we’ll know what we’re up against, and maybe develop a little spine and fight for a modicum of common sense.

    If all the corporate thugs do is send “bullying” letters, who cares? Why cave in so easily? Why give them easy money – play the music, and screw BMI. Either they will drop the matter, or reveal themselves as Mafioso thugs. In the latter case, BMI will not only have to win their day in court, but also repair the public relations fiasco that will certainly go with it. I think it’s a loser for them – but only if we fight. If we don’t fight, we definitely lose.

    If I sing a song in the woods and nobody hears it, do I still owe BMI?

  • Jon Petersen

    I own a restaurant. We have live music. We have analyzed it every way to Sunday and BMI is flat wrong. We SPEND money on music. We LOSE money on music. We do it because we love local musicians, and we want to contribute that to the community. When you compare the evenings with music to the equivalent evenings of the week without it, there’s no numbers difference. And, we feed the musicians and often times provide a guarantee if the pass-the-hat donation doesn’t work.

    I have been paying BMI, SESAC and ASCAP for years because our lawyers told us there’s no way out. There is no negotiation about rates, they just tell you what you have to pay. If you don’t pay it, they will sue you. It is the definition of extortion. The money doesn’t go to small artists they represent, they go to money-fiends like Metallica and large music publishing organizations. They do the same thing to musicians too, if you were wondering.

    Freedom of Expression, which is a constitutional right, makes it so that they can’t go after an actual musician for playing or singing, thank God. But they can go after the restauranteurs, who are already in the lowest margin business out there. So, they do.

    There is no way around this for as long as people like Clarence Thomas sit on the supreme court. Money will drive everything, as the Citizens United case showed in another example. A class action suit will be futile. So the best approach is to emotionally abuse the SESAC, ASCAP and BMI employees when they call and ask for their blood money. You know the things you can’t say (swearing, slurs). But you certainly can let them know, over and over, what the affect of the work they do is, and remind them to think about that when they go to bed at night.

    • J P

      Jon, do you charge you patrons an extra fee and call it “US Royalty Fee?” Catalina Jazz Club in Los Angeles California does. Is charging the patron normal?


  • Ron Pulcer

    This BMI intimidation is not a new problem. It’s just that it finally showed up in Vermont in the last few years.

    These days, I am a very part-time musician. Back when I lived in Michigan in the 1980s and early 1990s, I was still part-time, but had gone through the process of taking a “Business of Music” course at a community college. I wrote the music notation for my songs, filled out the U.S. Copyright forms, with enclosed checks, and even joined BMI. If I hadn’t spent all the time filling out the copyright forms, and writing checks for each song on my cassette, I would have actually made a little money!

    I learned about the history of musician’s publishing / performance rights organizations like ASCAP, and then later BMI, and later SESAC. A century ago, many musicians were getting cheated by publishers and recording companies and performance venues. So they served a valuable purpose at one time. The same can be said for unions and political parties today. They served a purpose at one time, and now due to the power they wield, have to some extent now become the same type of “bullies” that they fought against.

    Today we have the Internet and many musicians and songwriters are working without a recording contract and self-publishing and self-promoting themselves. It seems like BMI is not a necessity for some musicians today.

    In the early 1990s I remember talking to two small business owners who were hit upon by ASCAP and BMI. Both store owners had franchises of national businesses. One was a local Hallmark store. They played music from a local radio station. It turns out that radio stations must pay license fees to ASCAP and BMI. So ASCAP and BMI were double-dipping by charging the store owner fees for playing a radio station that was already paying them license fees.

    The other case was a local Kinko’s store. It turns out the workers behind the counter would listen to local rock station, especially late at night when there was not much customer traffic. According to the owner, the music was for the workers, not the customers. But ASCAP and BMI didn’t agree and demanded license fees. So the owner just told his employees they couldn’t listen to music anymore at work.

    As for “chord progressions” being owned or represented by ASCAP or BMI, I believe that is a false statement. On that alone, I would not trust these “scouts” or thugs from these orgs trolling around in Vermont.

    I bet you could easily find several examples of two songs, one represented by ASCAP and one by BMI, that have same or very similar chord progression. Which one owns the chord progression? Neither can own a chord progression or represent a chord progression. They can only represent musicians with copyrighted songs. You can copyright a song, but not a chord progression.

    If you pick a genre like 1950s ballads or Do-wap, there are many songs that have same or similar chord progression, and may also be in the same key. To some extent the chord progression helps to define the genre.

    Same thing with early Rock ‘n Roll, Rockabilly and Blues, in that they have many songs with a 12-bar blues progression. The difference is partly in the rhythm and tempo. But uou can’t copyright or own a rhythm. You can’t copyright or own a song title (I remember that one from course I took). And you certainly can’t copyright or own a chord progression. You can copyright only a song, which has a certain chord progression (that may or may not be unique), and lyrics and rhythm as entire song “package”.

    In fact, you can’t include just song lyrics and chord progression with the U.S. Copyright form. You must include the musical notation of the melody (lead sheet), which may or may not include the chord progression.

    If the Shoreham Inn is playing only “traditional” and “public domain” Irish music, then rather than succumb to BMI bullying, why not have another kick-off music event and try to fill the place, including a few lawyer friends. If the “scout” shows up, the crowd can “boo” him off the premise. I would bet a pack of guitar strings that these “scouts” mostly only read the local arts calendars and don’t always show up to see what music is actually being played.

    What this article is describing in Vermont has been going on in bigger states for well over a decade. Maybe Vermonters can fight back by having the local musicians, fans and small venues band together. If the Shoreham Inn revives their musical Sundays, please let me know. I’m not a big Irish music fan, but I would support their efforts to fight back this BMI intimidation, especially when they are playing public domain music.

    About a year ago, a friend of mine who frequents the South Station in Rutland and listens to some local musicians there told me that some strange characters were showing up asking the musicians and owner to show the the song lists or set lists. The one jazz group started then only playing / jamming to “chord progressions” rather than actually playing real songs to try to get around the hassle. I don’t know the final outcome, as to whether any license fees were paid or not.

    There should be some kind of formula based on number of days in year that music is played at a venue, rather than a one-size fits all fee for “small venues”. Small venues can vary from “tiny” to what would be considered larger venues here in Vermont.

  • Lynne Cannon

    It’s outrageous to pay for something that no one can prove has occurred. How does BMI know what songs were played at any restaurant? Just because you have a live performer does not mean that they are using licensed work. If you pay a musician to perform, that musician should pay the royalties for any songs that are not his or her own, not you. What come next, sending a bill to any patron of an establishment with live music because you may or may not have heard a registered song? “Protection Racket” comes immediately to mind when reading about this.

  • Guy Tapper

    I am outraged (to quote Bernie) Who is getting the 86% of money that BMI is collecting for classical and traditional music that is in the public domain?

  • Gordon Miller

    To argue that one can “copyright” a chord or chord progression is as valid as Lotus trying to claim its rights to “copyright” rows and columns in a spreadsheet.

  • As a retired naturopath who only accepted musicians and performers as patients, I think this is time to organize.

    Let’s be fair to performers, but this is killing the business.

    I am a past member of local 76, the musicians union. I know for a fact that this can be beat.
    If you want me to help push back against this , contact me
    .Legalize music.
    As Pink Floyd said, Money, get away!

  • Bill Heyman

    You gotta pay to play. If you can’t pay then take advantage of cheating. If you cheat and get caught to bad. Shouldn’t have cheated in the first place. I’m surprised by how right Vermonters can be until they have to open their wallets. Do Vermonters get to drive thru tolls and not pay. I know many I have worked for think they are oh so bright for cheating me. I wonder if those same people not paying royalties would be so honest to show their tax returns.


    I am a published successful songwriter, I play live over 100 times a year, I am a member of ASCAP… with today’s view that downloading [stealing] your music is fine, and the pittance we get for playing live… please explain to me why the small [pennies] royalty we receive as a songwriter is not fair to be paid to the creator of the work? NOT paying living songwriters for their craft is another step to the end of true songwriters being able to simply survive, pay their bills & eat. It’s very, very hard to make a good living… I love to play house shows solely because those folks came to hear the craft of the work & enjoy the event.

    • I think you should be compensated for your efforts – and I thing you should get more than a pittance for you live shows. My problem is with the big brother police state that has grown up to enforce today’s copyrights.

  • Jolene Scott

    It’s okay Rex, I love hearing your recorded music playing anyway. It’s a shame that the little businesses and town’s people have to suffer out of shear ignorance on the part of BMI. The food is still good and that’s what people are always sure of.

  • K. Shimberg

    The problem is assailing players and small venues that allow an informal traditional jam session where no one is getting paid, no admission is charged, simply playing music informally in a nice public place to sit and play w/ friends for awhile, and people who enjoy the music can hear it while they shop or eat or sip a cup o’ tea or whatever, if anyone does happen to come in while we’re playing. In the case of our particular small trad Irish session it doesn’t necessarily bring more people into the establishment, but in any case, it’s MUSIC, for godsakes. And if everything played is truly traditional and/or in public domain, any burden of proof should be on the bullying money-collecting supposed protection organizations — be they BMI, ASCAP, SESAC, whoever.
    They’ve now moved into upstate NY as well as VT — recently threatened a local very-small-community organic-general-store owner who kindly had let 4 or 6 of us gather there once a month for a casual Sunday afternoon Irish session, playing truly TRADITIONAL Irish music (w/ the word “traditional” used in an uncorrupted sense), for our own pleasure and whoever happened to be there and wanted to listen, if they did. No copyrighted material. Not copying anyone’s style or arrangement. However, the store’s owner is upset enough by getting a phone call from BMI demanding that she’s holding “performances” in her store and must pay an annual fee (modest as that is in this case), that even though we could probably laboriously prove “public domain” on each tune (we don’t usually sing songs there), we decided to save her the emotional hassle by abandoning that session. A real shame. We can still meet in someone’s home, but it really adds to the pleasure to be able to share this music freely in public. We sympathize w/ all the other local rural communities in this situation too. BMI probably tracked her down simply by reading a Facebook page or something, and threatened her w/ their phone call. We doubt that they would be checking on the place by an agent personally monitoring this tiny monthly happening in this tiny crossroads community — if a scout did come by, he or she would see that we were’t playing anything that justified their attack — if he or she actually knew anything at all about music or genuine folk traditions.
    It’s ridiculous, as others have observed in their comments here, to claim that chords or standard chord progressions could possibly be copyrighted, unless perhaps they are some very esoteric and personal series of chords in a consistent progression unique to a particular songwriter or performer. Chords in general are part of music, and are also variable depending on what any musician might hear the melody implying. Music is just MUSIC. Its creation comes out of the soul, spirit, creative inspiration, it’s just in the air, the mind, the heart, the ear. “My soul sings” is not equivalent to “My bank account sings.” Music is also just part of the universal sound spectrum, like color is part of the visible light spectrum. Can someone copyright a basic color? (Probably someone has tried, or will try, giving it an esoteric name. But that would be copyrighting the name, not the color itself, unless they crafted a new combination resulting in a “new” color. [Maybe that would be patenting rather than copyrighting, but the color’s name might be copyrighted.]) What on earth have we come to in our so-called civilization?
    My own (late) father worked on updating copyright law back in the 1960s or ’70s sometime. There was a lot of discussion then about adding a component that protected live performances and performers as well as sound recordings, not just published or written material — discussions included what might or might not be equitable and fair to contemporary composers, performers, and recording artists, as I recall. He never envisioned it would lead to this kind of misapplied extortion shakedown by money-driven organizations that have no understanding of or regard for what traditional music (or other traditional art form) consists of.
    I respect inventor/creators’ right to have their own inventions/creations recognized, and in our money-driven society to receive compensation if that’s what’s needed as a sign of recognition/appreciation of their creative validity. This is different, though — it’s like Monsanto creating GMO foods and then trying to legally prevent farmers and gardeners from saving their own heritage-plant seeds. Where do the corporate bullies get the right to do that? If this is built into our legal system, we really need to change our legal system. (As others have said anyway, in other contexts.)
    Cheers for open-source materials, and their creators and champions. I say we need to fight this kind of intrusive takeover attempt.
    Meditation on small injustice, amid the many much larger injustices abounding in our world today. Still, this one is an outrage.

  • ron Horton

    This is the reason ticket prices at large venues keep the majority of music lovers from going. If the Big 3 want to protect the musicians they aren’t doing it by closing venues. If they aren’t going away they should stay away from venues with less than 300 seats or ticket prices under $50.00. New bands and musicians have to start someplace. Without the smaller venues they have a hard time making a go of it. It’s bad enough that the average price for paying a band has stayed at about 1960 levels. It’s even worse that there are fewer and fewer places to perform.
    There was a time when musician’s unions helped musicians get gigs and get paid a reasonable wage. Where did they go? They priced themselves out of the market.
    The Big 3 say that .85 goes back to the musician. That leaves a Big Chunk for the big three bosses.
    When someone tells you they will charge you a dollar to make 85 cents… RUN!