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Posted on Tuesday, April 08, 2014

Cautionary Tale: When Contemplating Live Music at Your Venue, Get a License

Last summer, a small band performed at a bar called 69 Taps in Medina, Ohio, near Cleveland. That evening, the band covered a number of popular songs that the mostly middle-aged audience had grown up listening to. The bar had not asked for a set list, nor had the band provided one. The band took requests, playing hits like “Brown Eyed Girl” and “Freebird” for a small audience. The problem? “Freebird” and nine other songs that the band covered that evening are protected by Broadcast Music, Inc. (“BMI”), a performing rights organization tasked with collecting royalties, and 69 Taps did not have a license to present music from BMI’s catalog.

The bar was slammed with a lawsuit brought by BMI and the copyright holders of each of the ten covered songs, demanding that 69 Taps pay significant damages and attorneys’ fees. While it may seem harsh to sue a small-time bar for copyright infringement over an amateur cover band’s decision to take requests on a summer evening, this lawsuit is a testament to the fact that BMI (one of the “big three” American performing rights organizations along with ASCAP and SESAC) takes aggressive steps to protect the intellectual property of its artists. Because 69 Taps did not ask for a set list or post one on its website, BMI could only have found out about the performance of the infringing works through its survey process—by actually having a representative in the audience to keep tabs on the performance. Any venue that presents live music, no matter how small or obscure, should expect to be “surveyed” by the three performing rights organizations.

The solution to avoiding these lawsuits is for venues to purchase a “blanket license.” For example, if 69 Taps had purchased BMI’s blanket license, it would have had unfettered permission to present any of the roughly 8.5 million songs in BMI’s catalog for a flat annual fee. BMI allocates shares of the licensing fee to the artists whose work is represented in the venue’s programming, as determined by the same survey methodologies that discovered 69 Taps’s unlicensed performances. The cost of the blanket license is much less than the cost of defending just one copyright infringement lawsuit, so if your business plans on offering live music, the safe bet is to purchase blanket licenses from all three major performing rights organizations. Otherwise, businesses may have to “face the music.”

Frank Gulino is an associate attorney with Washington, DC business law firm Berenzweig Leonard. He can be reached at FGulino@BerenzweigLaw.com.

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