Securing Music Rights (and Keeping ASCAP and BMI at Bay)

Whether your business is a grand restaurant or a humble diner, if you are performing or playing music for the enjoyment of your customers there is a price to be paid.  The good news is that the price is affordable and the licensing arrangements are quite streamlined.

All copyrighted popular music resides in the catalogs of the two principal “performing rights organizations” – ASCAP and BMI – who protect their respective composer and lyricist members’ rights by monitoring public performances and broadcasts of their music. ASCAP and BMI collect licensing fees from all such users and then compensate their members based on formulas that attempt to determine the relative popularity the song, whether it’s  “Hey Jude” or “Happy Birthday” (yes, that song is still protected by copyright). 

ASCAP was founded in 1914, when the composer Victor Herbert famously heard one of his songs played by a band as he strolled past the Palm Court of the Plaza Hotel, and thought: “Why am I not getting paid for that?”  ASCAP now has more than 350,000 members.  Even more songwriters are members of BMI, founded in 1939 out of dissatisfaction with ASCAP’s alleged preference for traditional pop music – BMI was the first performing rights organization to represent jazz, blues, R&B, country, and ultimately rock songwriters.  The organizations are essentially a form of rough justice – all sides acknowledge that it would be impractical for each user to contract directly with each songwriter, and ASCAP and BMI perform an important middleman function for all concerned.

The two organizations issue “blanket licenses” allowing licensees to perform all the songs in their catalog.  Specific licenses are issued for certain types of venues or businesses (ASCAP, for example, offers over 100 different rate schedules depending on the type of business presenting the music, and licenses to more than 300,000 businesses).  Additional information regarding license agreements and related fees can be obtained on the websites of ASCAP and BMI. 

It is important to bear in mind that ASCAP and BMI only license “small” or “nondramatic” rights to the songs in their catalogs.  Songwriters who create musical plays, operas, or ballet scores deal directly with those who want to perform their works “dramatically” and seek “grand” rights.  (The line between grand and small rights is a famously fuzzy one, with very little statutory or judicial guidance.  In borderline cases, obtaining an ASCAP/BMI license will at least be evidence of your good faith.  For more sophisticated analysis, consult one of our entertainment attorneys.)

No unlicensed music user can escape the long arms of these organizations, which employ a small army of detectives to root out unauthorized musicality, in venues ranging from funeral homes to ice cream parlors.  (A recent New York Times article provides an interesting look at the work of a BMI investigator.) A proactive approach saves time, annoyance, and penalties, so get to know your music authorities before they come calling on you.

M. Graham Coleman is Co-Chair of Davis Wright Tremaine’s Entertainment Transactions Practice.