Licensers crack down on tunes played free
Customers used to love sifting through the CDs, stacked 20 or so high, that sat atop the counter at Geraldi's Italian Eating Place downtown.
Customers could play whatever music they wanted through a tiny tabletop disc player. Whether their tastes ran toward Perry Como, Al Martino, classical or oldies, they all usually could groove to their preferred sounds.
Things changed in July when co-owner Joan Wojciechowski received a registered letter from Broadcast Music Inc.
The letter said, in effect, pay us or don't play us.
'Us' being the artists who license their music through BMI, which collects royalties for makers of more than half of all music published in the United States. The American Society of Composers, Authors and Publishers, known as Ascap, controls most of the other half.
The two groups typically track down noncomplying businesses and demand that they pay music licensing fees. Broadcast Music's fees start around $271 a year.
'I think it's ridiculous, and most of my customers do, too,' says Dave Wojciechowski, co-owner of the restaurant, at 518 S.W. Fourth Ave.
'We're not a big restaurant, we're just a small deli and sandwich shop,' he says. 'We're not trying to entertain people in any way. We just want to offer a selection of comfortable music for people to eat lunch by, that's all.'
The Wojciechowskis are typical of small-business owners, most of whom don't realize they're required by law to pay Broadcast Music's fees if they're playing recorded music written by BMI artists.
'I've had some fairly sizable clubs contact me in the past with this same issue,' says Bart Day, a Portland-based music industry attorney. 'It's typically newer business owners who haven't dealt with this before.'
In place of the countertop CDs at Geraldi's sits a sign that says: 'Due to the greediness of a big corp., I am no longer able to play my CDs during business hours. The annual fee for playing my own CDs is $265 per yr!! What's next??'
BMI is accustomed to fielding such complaints, says Jerry Bailey, the Nashville, Tenn., company's director of media relations.
'That sign should blame 'the greed of the poor starving songwriters,' because that's where the money goes,' says Bailey, who says songwriters and publishing companies receive 83 cents of every dollar that BMI collects.
BMI and Ascap track public performances of music, then compensate creators and owners based on a variety of formulas. Businesses, be they restaurants, bars or antique shops, must pay the licensing fees if the public can hear the music in any way.
The system, Bailey says, goads businesses into adhering to copyright laws, which require permission for public use.
Along the way, BMI and Ascap collect more than $500 million a year in licensing fees. Occasionally, they must take a noncompliant business to court; the fines that businesses pay range from $750 to a whopping $100,000 per nonapproved song.
The scope of BMI and Ascap's control changed somewhat two years ago when Congress passed legislation stating that businesses smaller than 3,750 square feet could play music on a radio or television without paying licensing fees.
That, along with the short-lived rise of free online music sharers such as Napster, may explain why micro-businesses such as Geraldi's are now receiving registered letters.
'It seems like (the licensers) have been on the warpath a bit more lately to collect those fees,' says David Bristol, an expert in transactional law with the firm Miller Nash LLP.
Short of not playing music, shopkeepers who don't want to pay the fees have few options. At Geraldi's, Dave Wojciechowski now plays CDs that he says do not require any music licensing fees. Most of the discs are produced in foreign countries.
As a precaution, he keeps the CDs on a back shelf, behind the food preparation area.
'The thing is, they're shooting themselves in the foot,' he says. 'When we had the CD cases on top of the deli case, people would hear the music, write down the name of the CD and go buy them. So the artists are now actually losing sales because of this.'