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Monday, August 23, 2010

BMI/ASCAP/SESAC Legal Extortion Scam

"Legal extortion" occurs when someone uses the threat of a lawsuit, or an actual lawsuit, to extort money. In a typical legal extortion racket, most victims settle without a trial. The occasional expensive highly-publicized lawsuit victory scares everyone else into settling.

The State does not need to jail everyone, to collect taxation/tribute/extortion money. A mafia extortion racket doesn't physically assault everyone. A legal extortion racket doesn't sue everyone. The occasional violence keeps the other slaves in line.

If I sent a letter saying "Pay me $1k or I break your legs!", you'd agree that I'm a criminal. If a lawyer sends a letter saying "Pay me $1k or I sue you!", the net effect is the same, but that's presumed legal.

The legal system is violence and threat of violence. If I wrote a letter threatening to steal your property, that's a crime. If a lawyer writes a threat letter demanding settlement, that's presumed legal. If a State judge writes a court summons, you have to respond or people with guns will come to kidnap you or take away your property.

Here's how the BMI legal extortion racket works. BMI owns the performance rights for most mainstream media songs. (There are two other music licensing extortion organizations, ASCAP and SESAC. I refer to BMI in this article for consistency, but what I write applies to all 3 licensing extortion organizations. A bar/restaurant/theater/venue typically must sign an extortion contract with all 3. You don't know a priori which song's copyright is enforced by which licensing extortion cartel. There are some smaller copyright licensing organization that own fewer songs, but still go around extorting from people.) The BMI licensing fee goes to songwriters, and not the people who sing the song. The payout is based on a survey of top-earning performers and top-rated radio stations, which creates a bias in favor of hit songs.

If you don't have a hit song, and register with BMI, you probably won't make anything. Once you register your song with BMI, I'm not sure if you can unregister. They make it hard to unregister. You can do it once a year or once every five years.

BMI extortion reps read the local newspapers, looking for bars and restaurants that offer music. The rep goes to the bar/restaurant/theater, pretending to be a customer. The rep writes down every song played. If there's an infringing song, you get a legal threat letter from BMI.

BMI extortionists/salesmen complain "We have to spend a lot of effort educating our 'customers', making them realize they have an obligation to pay us or we'll sue them and ruin them. Some of our potential customers/victims mistakenly think it's all one big scam! There's a serious lack of awareness of copy licensing extortion." If the average person knew about the BMI licensing extortion racket, they would say "WTF? This is legal extortion!" By keeping it a secret that only bar/restaurant/venue owners know, that facilitates the extortion. BMI isn't widely advertised, because people would be outraged. Imagine if BMI took out a Super Bowl ad saying "If you own a bar and have a live band, pay us or we'll sue you!"

Government *IS* extortion. It isn't surprising that people abuse government to extort. Lobbyists get favorable laws, and then use those laws to extort. Part of the profits of legal extortion is spent on further lobbying. Legal extortion piggybacks on the State extortion racket. BMI and the mainstream media/music cartel spent a lot of money lobbying for favorable laws and legal precedents.

The mainstream media cartel can't criticize the BMI extortion racket, because the mainstream media cartel also is a huge beneficiary of corrupt copyright law. Current copyright law is a mess for non-insiders. It's practically impossible to do anything, without infringing on someone's copyright. Having copyright a legal quagmire benefits insiders, because only they can afford to hire lawyers and get permission to do things. If you make a song that sort of sounds like a copyrighted song, you may be sued.

There's one Anonymous UK commenter that complains about legal extortion a lot. Outside the USA, there are legal extortion organizations similar to BMI. In the UK, do you have a legal obligation to respond to a threat letter from a lawyer? In the USA, you can usually ignore a threat letter from a lawyer, but not an actual lawsuit. However, the judge might hold it against you in the trial? In the trial, the plaintiffs say "But we tried settling! Look at how many threat letters we sent him first!"

Do you get a jury for copyright infringement trials? Is it a bench trial with just a judge? It should be a jury trial, because then the defendant should argue "Hey! This is legal extortion!" The defendant in a copyright infringement extortion trial should *ALWAYS* demand a jury. In a "evil corporate cartel vs. individual" trial, the individual should be able to get sympathy from the jury. However, BMI will usually chose an song owned by an individual, rather than a corporation, when suing, to give the illusion of "We're looking out for the artist!".

On one website, I read that a typical contract with a label says that the label gets 50% of the performance revenue and the writer gets 50% of the revenue. Right of the top, 50% of BMI's revenue goes to corporate cartels. Does an "unrecouped" band still get the performance revenue?

A "legal extortion" racket relies on the fact that most victims settle without trial. Otherwise, the legal system would be flooded with lots of cases. If BMI thugs had to individually sue every victim, there would be no way that the legal system could handle all those cases.

The BMI reps are an example of "Economic Secret Police". They are paid on commission, as a % of tribute/extortion money collected. This gives the BMI rep an incentive to act excessively aggressively. I wonder if the BMI reps lie, saying you played a copyrighted song when you actually didn't?

Some of the BMI reps are big muscular men. That implies the threat of physical violence.

The BMI rep will keep harassing you and your employees, unless you sign an extortion contract with them. They act exactly like a mafia gang extracting extortion money.

As I said before, "intellectual property" is not property. Copying an idea or song is not the same as stealing a car. "Intellectual property" laws are written in a way that specifically encourages legal extortion. This is the result of lobbying by insiders. Most "intellectual property" is owned by corporate cartels. A pro-State troll says "Copyright protects the little guy!" The actual implementation of copyright law is profit/extortion for insiders.

"Intellectual property" should really be called "intellectual theft". The term "intellectual property" sets the debate in the wrong frame, because it isn't really property at all. What's a better term? How about "intellectual non-property"? "Intellectual anti-property"? "Intellectual un-property"? This page called it "intellectual pooperty".

A "legal extortion" lawsuit is always an insider vs. a non-insider. The BMI lawyer claims to be "acting for the poor songwriter". Most of the extortion money goes to corporate cartels and the writers of megahit songs. According to the licensing distribution formula, the megahit songs get most of the revenue. Also, the performance rights to many songs are owned by corporate cartels, and not the original songwriter.

Is a hit song popular because it's good? Or, is it popular because the media cartel promoted it?

For copyrighted songs, how many performance copyrights are owned by individuals? How many performance copyrights are owned by large corporate cartels?

The BMI extortionist sends you a form that's very similar to an IRS 1040 form. Here's one example. You say how big your restaurant/bar/business is and how much money you make. Then, BMI determines the licensing fee. A typical licensing fee is $1000/year. You might say "So what, $1000?", but it's still a tax. There's also a "minimum fee" for smaller business that don't play music that often. The BMI extortion fee is a regressive tax on small businesses. Larger businesses and chains get more favorable discounts.

If you sign an extortion contract with BMI, you'll probably have to also sign an extortion contract with ASCAP and BMI. They probably share a list of customers/victims.

The BMI schedule is a type of regressive tax. If you have live music infrequently, or if you have a small restaurant/bar, then you pay a disproportionately larger extortion fee. For example, notice the "annual fee minimum" of $332. There's also a "annual fee maximum". Madison Square Garden pays a *MUCH* smaller fee per seat than a small bar/restaurant/theater.

One defect in copyright law is "statutory damages". The copyright owner does not need to prove economic loss. The copyright owner merely needs to prove that infringement occurred. "Statutory damages" is an important concept of corrupt State law.

"Statutory damages" criminalize things that have no actual victim. Playing a copyrighted song has no victim. In fact, that act might increase the value of the song. There was a "payola" scandal, where record labels bribed radio stations to play their songs.

For most lawsuits, damages don't include plaintiff legal fees. This provides a disincentive to sue people. Statutory copyright infringement specifically includes plaintiff's legal fees. That provides an incentive to aggressively sue people. For example, if I sued for medical malpractice, attorney fees would be deducted from any verdict, giving me a financial incentive against suing.

If the fine for copyright infringement were only $100 per act, with no legal fees added, then BMI/ASCAP/SESAC would be out of business. Outrageous statutory fines, plus "plaintiffs are reimbursed for legal expenses", makes this extortion scam extremely lucrative. Notice that the defendant in a copyright infringement lawsuit does *NOT* automatically get legal expenses reimbursed. Further, the extortion cartels almost always win, because the law and judges are ridiculously biased in favor of them.

Copyright law criminalizes innocent-seeming activities. Suppose you buy a CD, and then play it in your business. That's copyright infringement. You need a separate performance license to play it in your business. The CD purchase only gives you a license for personal use.

Suppose you play the radio in your business. That's also copyright infringement. (However, satellite radio also includes a business rebroadcast permit.) The media cartel is double-billing, because the radio station paid a license for the right to play the song. If you buy a karoke machine or jukebox, you can't use it in your business unless you also buy a performance license.

According to recent copyright law changes, many more businesses are subject to BMI extortion. The square footage requirement for an exemption was reduced. This story had a good bit:

Spence also explained a relatively recent development in performance rights called the Sonny Bono Copyright Extension Act, which took effect in 1998 and may explain why ASCAP seems more active in recent years. It not only granted Disney a total of ninety-five exclusive years with Mickey Mouse, but also reduced the square footage at which a business can be judged a performance venue.
The law was recently changed, requiring more businesses to get a permit for music. This encourages more aggressive extortion by BMI. The law also increased "statutory damages", giving a further incentive for legal extortion. This law change was entirely the result of lobbying by BMI and the media/music cartel.

This article had an interesting bit. Some former judges are hired to work for BMI as board members. If you're a judge and give a favorable ruling for BMI, then you're rewarded with a cushy high-paying job when you retire!

This article had an interesting bit. Here's a better source.
Turns out the amendment was added by a staffer named Mitch Glazer from the office of Subcommittee Chairperson Howard Coble, R.-N.C., Glazer now works for the RIAA, the organization that sought to have those four words included in the first place, and did so with alarming quiet.
A Congressional clerk, Mitch Glazer, put an obscure clause in a law, the "Satellite Home Viewer Improvement Act", reclassifying music writing as a "work for hire". That law would have meant that musicians would never own copyright to their songs! The clerk who put that clause in the law immediately got a high-paying job as a music corporation lobbyist. That part of the law was repealed after much outrage.

The State can't annoy musicians too much. The mainstream music industry plays an important role in keeping the slaves brainwashed and complacent. I'm not holding my breath waiting for a mainstream media-promoted song to say "Taxation is theft! The Federal Reserve is a scam!"

When there's 1000+ page laws, it's very easy for an ambitious clerk to stick an evil clause in the law. Most of the financial "reform" law has clauses like that, but only financial industry insiders will benefit. Most of the obscure financial "reform" loopholes only make sense to financial industry insider.

The main evil of corrupt State copyright law is "statutory damages". The copyright owner merely needs to prove infringement occurred, and not that you cost them money. There's a big difference between "compensatory damages" and "statutory damages".

Patent lawsuits are another example of excessive statutory damages. Most patent lawsuits are filed by "patent troll" corporations. Patent troll corporation executives buy up patents, and then sue people. The most famous example of patent extortion was RIMM's Blackberry lawsuit. Patents are not property. Every patent lawsuit is legal extortion.

If you're kidnapped for "possession of marijuana", that's an example of "criminal statutory damages". "Possession of marijuana" is a victimless crime. If you smoke marijuana, you're only hurting yourself.

If you challenge BMI in court, you have to pay your own legal fees, even if you win, costing $50k+. If you lose, you owe statutory damages of $100k+, plus your own legal fees, plus plaintiff legal fees. The rational thing is to pay the $1k-$3k extortion fee and settle.

The problem is that the USA doesn't have a justice system. The USA has a "justice" system. The system is set up for the benefit of insiders, at the expense of non-insiders. This vandalism was amusing. Someone vandalized the 'Boulder County Justice Center' to read 'Boulder County "Justice" Center'. That's an accurate reflection of the way the USA legal system works.

The BMI legal extortion racket undermines the credibility of the US legal system. The BMI cartel extorts $1k-$10k per small business owner per year. At the same time, productive workers are getting a lesson in how the US legal system is one big sham. In that sense, BMI is doing a good thing, because they're undermining the credibility of the State!

Techdirt wrote an article about BMI extortion. They were criticizing a NY Times fluff piece. As usual, the NY Times was pro-State trolling. They were saying "It's wonderful that BMI collects money for the little guy artist!" instead of "This is legalized extortion!" Most of the money BMI collects goes to writers of mega-hit songs. The BMI licensing fee is distributed based on a sample of what star performers sing and based on what popular radio stations play. The NY Times says "Those greedy small business owners aren't paying their fair share!" Why not write "Those greedy corporations keep lobbying for retroactive copyright extensions! Those greedy corporations lobbied for ridiculously biased laws! Copyright shouldn't last for 100+ years!"?

It's exactly inverted. The BMI fight is presented as "little guy artist vs. greedy restaurant owner", when it's really "BMI corporate cartel vs. small business owner". A "State vs. individual" fight is misrepresented as a "individual vs. State" fight.

The NY Times BMI propaganda article was published on August 6, 2010. Remember that date.

This article was interesting. It refers to this court decision. On July 26, 2010, a NY Federal district court issued a *VERY* unfavorable ruling for BMI. The ruling was "If you license music from multiple sources, you only owe BMI a prorated licensing fee." Right now, BMI charges a flat blanket fee, no matter how many BMI-licensed songs you use.

The flat blanket licensing fee, combined with "revenue goes mostly to megahit writers", punishes small bands who write their own music. If you pay the extortion fee, and hire bands that play all/mostly original music, you're getting ripped off by the BMI/ASCAP/SESAC fee. You have to pay the extortion fee, just in case a band you hire accidentally plays a copyrighted song.

If you play 99.9% original music and 0.1% BMI-licensed music, you should only owe 0.1% of the fee. BMI's pricing schedule should be a violation of antitrust law. You have to buy the blanket license just in case a band performs a copyrighted song, even if you hire bands that play mostly original music. The "statutory damages" copyright law is ridiculously biased in favor of plaintiffs. This gives bars/restaurants/venues an incentive to pay the extortion fee, or not have any music at all. Due to the threat/cost of extortion, many small bars and restaurants are saying "I won't have a band then. It isn't worth the legal hassle. If I have an open mike night, I'm risking $100k+ damages?" The BMI extortion racket hurts small independent bands, as venues are forced to close.

What a coincidence! On July 26, a court issues an unfavorable ruling for BMI. On August 6, the NY Times writes a propaganda article, saying how wonderful BMI is. Gee, I wonder if there's a correlation? Did some BMI executive call his buddies at the NY Times and say "Hey! I want you to write a propaganda article for us! We need to lobby to get this court decision overturned!"?

There's another interesting bit in the above article. There's a "BMI Rate Court", separate from the legal system, where BMI extortion fees are calculated. The IRS has its own "tax court". BMI has its own "rate court". BMI has an astonishing similarity to the IRS.

BMI/ASCAP/SESAC charge a "blanket license fee". They look at the size of your restaurant/bar/venue, and the fee is based solely on your seating and revenue. If you play 100% BMI-licensed songs or if you only play 0.1% BMI-licensed songs, your fee is the same. This court decision potentially changes that. Even if you believe that "intellectual property" is property, the licensing fee should be based on the % of BMI-licensed songs you use, and not a flat blanket fee.

A pro-State troll says "Without flat blanket pricing, how can BMI be sure they're charging the right amount? Per-song pricing is too much of a hassle!" If copyright extortion is too expensive, then maybe BMI shouldn't be doing it? The current system benefits insiders, which is exactly the way BMI wants it.

Also, the flat fee is based on the *MAXIMUM* legal capacity and not your actual attendance. If your maximum legal capacity is 200 but your average seating is 50, then you owe based on the rate of 200 and not 50.

"Flat blanket fee" and "bundled pricing" is the way a monopolistic cartel acts. BMI acts like an abusive cartel, due to ridiculously high statutory damages plus legal expenses, when they sue you and win. Their library includes practically every copyrighted song. You don't know which song is licensed to which extortion organization, forcing people to sign extortion contracts with BMI, ASCAP, *AND* SESAC.

Another example is when BMI licenses to Internet radio. Internet radio and webcasters must pay a % of revenue, independent of how many BMI-licensed songs they play. If an Internet radio station plays 99% self-published music and 1% BMI-licensed music, they owe the same fee as if they played 100% BMI-licensed music. Here's a good source explaining the corruption in Internet radio licensing. "BMI gets a % of revenues, no matter what % of our songs you play" is extortion capitalism. There's another Internet music licensing extortion organization, SoundExchange.

The BMI fee is not negotiated via a free market process. The licensing fee is on a "take it or leave it" basis, and they'll sue you if you refuse. The BMI fee is based on the threat of $100k+ statutory damages plus legal expenses, rather than the true value of the music. It's practically impossible for a business owner to make sure a band plays no copyrighted songs. Is the owner expected to have every copyrighted song memorized? Even if the owner takes reasonable precautions, there are legal precedents that say the owner is still responsible, if the band he hires makes a mistake and plays a copyrighted song.

The actual copyright owner might not even be damaged, when a band in a bar performs the song. The performance might even enhance the value of the copyright. The corrupt legal principle of "statutory damages" removes this as a valid defense.

There's another amusing bit on Techdirt and other websites that criticize BMI. There's always a bunch of pro-State troll comments supporting BMI! It seems that the BMI propagandists troll the Internet. They publish a bunch of pro-BMI comments on websites that criticize BMI! I wonder if I'll get any such comments here? My blog has a decent PageRank now. This post might make the first page of Google search for "BMI extortion".

This article was interesting. BMI has a "consent decree" from the US Justice Department, making them exempt from Federal antitrust prosecution. That article also has a reference to the "Fairness in Music Licensing Act of 1998", which really should be called the "Unfairness in Music Licensing Act of 1998". That law increased the statutory damages for copyright infringement. That law also increased the number of bars/restaurants/venues that come under BMI's jurisdiction, by reducing the "square foot" requirement for being exempt from the licensing requirement. Even a non music-related store that plays music, might be required to pay a BMI licensing/extortion fee.

However, the "consent decree" doesn't exempt BMI from private antitrust lawsuits. That merely exempts them from Federal antitrust prosecution.

This "consent decree" indicates "Congress and the President know that BMI is running a legal extortion racket." They acknowledge and endorse BMI's extortion. Laws were were written in a way that explicitly encourage BMI's legal extortion. Legal precedents backed up BMI's legal extortion practices. The media corporations have been running this performance licensing extortion scam for nearly 100 years! Recent law changes make it easier for BMI to extort from businesses.

There's another fallacy in the way the law is set up. "The bar/restaurant/venue owner is legally responsible for copyright infringement, and not the performing band." If BMI went around suing musicians, then "It's for the artists!" would obviously be a lie. Besides, most small bands are broke. There's nothing to be gained from suing them. The small business owner has tangible assets that can be extorted.

The bar/restaurant/venue owner is required to purchase the performance license, and not the band actually performing. If the band were required to purchase the performance license, then they'd only pay for the songs they actually plan to sing.

Suppose a bar hires a band. He tells the band "I don't want you playing music that requires a third-party licensing fee." Suppose the band plays such a song anyway, either or purpose or as a mistake. The bar owner is still legally responsible! The contingent liability for hiring a band is too high. Many small business are saying "Screw it! I won't have any music!", rather than deal with the BMI extortion licensing cartel.

This article had an interesting bit. Even if the venue owner makes the band sign a written contract "I agree to not play BMI-licensed music.", the venue owner is *STILL* legally responsible if the band plays such a song anyway, either on purpose or by mistake. There's a legal precedent that removes "I told them not to play that!" as a valid defense. Those BMI scum and corrupt judges think of everything. Given the way the law works and given unfair legal precedents, the contingent liability for hiring a band without paying the extortion fee is ridiculously high.

The BMI extortionists make a bizarre statement. "Our music library contains almost every copyrighted song. It's impossible to have a live band performing, without infringing on our copyrights. If you have a live band or play music, you have to pay our licensing fee." The statutory penalty for infringement is so high, that if you play *ONE* infringing song all year, the statutory penalty is 100x higher than the licensing fee. If a venue refuses to go along with the extortion racket, then the BMI cartel will send spies to watch your performances, ready to sue you if someone performs a copyrighted song for which they own the performance rights.

This webpage has an interesting story. A musician wrote his own music. He gave performances. The BMI cartel still attempted to extort from the bars that hired him to perform. The bar fired him and stopped offering music, even though he was playing 100% non-BMI-licensed music. From the point of view of the small business owner, they'd rather not have music, than pay the extortion fee. The threat of extortion forces the band to stop offering music, even though the actual performance was non-infringing. The small business owner will stop having a band, once threatened with BMI extortion. The extortion cartel cost that independent musician his performance jobs.

The BMI extortion cartel is forcing many small bar/restaurants/venues from offering music. In effect, it's a huge tax hike.

The BMI extortion fee isn't free. It comes from money that would otherwise be available to pay musicians. The cost of the extortion fee is passed onto customers via higher prices.

Congress and the legal system have specifically endorsed BMI's legal extortion practice. However, there are some ways an ambitious lawyer might defeat them.
  1. RICO might apply. I don't know if anyone has tried this. One source said that someone won a RICO lawsuit in trial court, but had the verdict overturned on appeal.
  2. Another potentially relevant law is the "Hobbs Act". BMI sends their threat letters via mail, making them potentially subject to mail fraud. If a BMI agent falsely says in a letter "If you have live music, you owe us a fee, no matter what songs you perform.", then that's mail fraud. When a BMI agent says "Pay us or we'll sue. We've never lost a lawsuit.", that could be interpreted as extortion and sending threats via mail.
  3. Antitrust law might apply. The "consent decree" only gives BMI an exemption from Federal antitrust prosecution, but not from a private lawsuit.
  4. BMI's pricing practices are indicative of an abusive monopoly. They offer a "flat fee", based solely on the size of your business. Really, it should be a prorated licensing fee, based on the % of BMI-licensed music you play. BMI exploits the fact that "statutory damages" and legal expenses for a single act of infringement are 100x greater than the licensing fee. Therefore, they offer only a flat licensing fee.
  5. Copyright law might violate the "no excessive fines" portion of the Constitution, the 8th amendment. If you buy a BMI license, the fee is a couple cents per song. If you have no license, the statutory fine is $100k+ per song. That's a pretty huge discrepancy. That's the result of lobbying by insiders, giving BMI the power to extort.
  6. Sending a letter that says "Pay me or I'll sue!" may violate state anti-extortion laws. Here is a link to NY's anti-extortion law. It seems that BMI's practices violate 155.05.2.e.(iv), (vii) or (ix). However, that's subject to the interpretation of a biased State judge.
  7. Can you use a "jury nullification" defense in a civil lawsuit? The defense can argue "BMI is running a 'legal extortion' racket. Therefore, the jury should vote 'not responsible' no matter what the other facts of the case." However, a judge would probably bar such an argument. Even if you made such an argument, the verdict could be overturned on appeal; "double jeopardy" doesn't apply to civil lawsuits.
However, I'm not a legal expert. BMI has purchased sufficient Congressmen and judges that they'll probably be able to continue their extortion racket. I doubt any of BMI's victims will get a fair trial in a corrupt State court.

There's another weird bit about BMI copyright infringement lawsuits. It isn't "BMI vs. victim". It's "copyright owner vs. victim". BMI is acting on behalf of whoever owns the copyright.

The NY Attorney General frequently likes to challenge abusive corporate cartels. I'd like to see him challenge BMI's practices. Even if a RICO or antitrust lawsuit fails, it would raise awareness of the issues. BMI is extorting from businesses in NY, giving the NY Attorney General legal standing to pursue a RICO/antitrust lawsuit. There may be NY-specific anti-extortion laws that BMI is violating.

It's obvious that BMI is running a legal extortion racket. Unfortunately, corrupt State judges think otherwise. If you're an insane State judge, BMI's practices are totally legal.

This is the evil of the State. BMI makes a *TON* of money via legal extortion. They spend a fraction of this money lobbying for favorable laws. If you steal $1B via legal extortion and spend $100M lobbying, then that's a very profitable scam.

Here's a summary of all the issues:
  • BMI is running a legal extortion racket.
  • The body language of BMI scum is exactly the same as that of a mafia gang. Under "color of law", their extortion racket gets the illusion of legitimacy. Their extortion racket is backed by the full evil violent power of the State.
  • BMI is suing people for violating laws they lobbied for! Once a "legal extortion" racket crosses a certain profitability threshold, it becomes self-sustaining via lobbying, buying politicians, and buying judges. It's pretty scummy to lobby for a law, and then go around threatening to sue people for violating it.
  • There's a real cost to BMI extortion. Whenever you got to a bar, restaurant, nightclub, or theater, part of the price is the cost of BMI legal extortion. Also, fewer venues offer music, due to the threat of BMI extortion.
  • If you say "Pay me $1k or I break your legs!", that's obviously illegal. If you say "Pay me $1k or I sue you!", that's still immoral extortion, but presumed legal.
  • BMI agents spy on businesses who play music, so they can extort from them. They're a type of "economic secret police".
  • Current copyright law is ridiculous. The business owner has an obligation to know every copyrighted song and make sure his bands don't play them. Otherwise, he must sign with these extortion licensing organizations or be subject to ridiculous statutory damages.
  • BMI agents are paid based on a % of extortion/license money they collect. This gives them an incentive to behave abusively.
  • BMI agents will harass a business owner and their employees, until they pay the extortion fee.
  • Some BMI agents are big muscular men, implying the threat of physical violence.
  • Some BMI agents might lie, saying that a band played a copyrighted song when they actually didn't. They have a financial incentive to lie.
  • Some BMI agents claim "All bars/restaurants/venues that have live band performances are required to pay the licensing/extortion fee." That is false. The copyright extortion law only applies if you play songs that are copyrighted and BMI is hired to enforce the copyright. BMI's music library is so large that they claim "If you have a band, you're statistically practically guaranteed to be infringing."
  • Some artists who only play their own music have been fired from performing gigs, due to the threat of BMI exortion.
  • The BMI extortion racket has hurt small independent bands. Many small bars/restaurants are refusing to have bands, rather than deal with the BMI extortionists.
  • A really cynical person could say "The media cartel is intentionally shutting down small music venues so that independent bands can't earn a living." That ruins the Internet business model of "Give recorded music away for free and sell tickets to live performances."
  • There's another defect in the way copyright law is written and enforced. The bar/restaurant/venue owner is responsible, and not the band actually performing. The artist and venue are jointly responsible for any copyright infringement.
  • If BMI went around suing small bands, then "It's for the little guy artist!" would obviously be a lie. Besides, most small bands are nearly broke.
  • BMI sues the owner of the bar/restaurant/venue. A small business owner has tangible assets than can be extorted, making them a juicy target. A small business owner doesn't have deep pockets, giving them an incentive to settle and pay the extortion licensing fee.
  • If a business owner makes the band sign a contract "We agree to not play music that requires a third-party licensing fee.", then that should provide the business owner protection from being sued. Unfortunately, that's not the way BMI extortionists and State judges think. It seems there are legal precedents that establish the liability of the owner, even if he tells his band to not play such songs. That's ridiculous.
  • The BMI extortion racket creates a huge contingent liability for a bar/restaurant that hires a band without a BMI license. If the band plays just one BMI-licensed song, then the business owner is exposed to a *HUGE* liability. Most small business owners will say "I won't have a band at all!" if they were considering having a band once a month or once a week.
  • Most/all BMI extortion money goes to writers of megahit songs. "We're looking out for the little guy!" is a lie.
  • For copyrighted songs, how many performance copyrights are owned by individuals? How many performance copyrights are owned by large corporate cartels?
  • One source said that, when you sign with a major label, the label gets 50% of the performance copyright revenue. The writer gets the other 50%.
  • For a megahit song, the current copyright owner may not be the person who originally wrote the song. For example, rights to "The Beatles" songs have changed hands several times. Retroactive copyright extension and stricter laws means that the value of copyrights keep increasing.
  • The BMI license/extortion application looks a lot like an IRS 1040 extortion form. BMI has its own "rate court" just like the IRS has its own "tax court".
  • A complicated tax form creates the illusion of fairness in the taxation system. A complicated BMI licensing form also creates the illusion of fairness.
  • BMI recently got an unfavorable court ruling. A few days later, the NY Times published a puff piece, saying how wonderful BMI's extortion racket is. I wonder if there's a correlation between those two events?
  • Whenever a blog or website publishes a BMI-critical story, pro-BMI trolls post a bunch of comments. I wonder if this post will attract pro-BMI trolls?
  • BMI's extortion fee is not based on a free market negotiation process. It's based on the threat of a lawsuit, legal fees, and statutory damages.
  • BMI's extortion fee has nothing to do with the real economic value of the music performance right.
  • The fact that some businesses pay the BMI extortion fee, does not prove that their practices are reasonable.
  • The statutory damages for copyright infringement have nothing to do with actual economic loss. In fact, playing a song might increase the value of the copyrighted song. There was a "payola" scandal, where labels paid radio stations to play their music.
  • BMI has purchased Congressmen and judges. They have favorable laws and legal precedents backing their extortion scam.
  • BMI lobbied for favorable recent copyright law changes. Statutory damages were raised. More bars/restaurants/venues are now legally required to pay the extortion fee.
  • You can't know a priori which songs are owned by which extortion organization (BMI, ASCAP, or SESAC). Therefore, you must sign an extortion contract with all three.
  • Copyright law criminalizes innocent-seeming activities. If you buy a CD and play it in your business, that's illegal. If you play the radio in your business, that's illegal. If you buy a karoke machine or jukebox and play it, that's illegal. For radio, it's double-paying, because the radio station also purchases a performance right when they air the music.
  • High statutory damages specifically encourage legal extortion. The victim must pay plaintiff's legal fees in addition to his own legal fees, further encouraging extortion.
  • The way copyright law is written, the copyright owner must have a zero tolerance enforcement policy. Otherwise, they may forfeit their copyright.
  • BMI only offers a "blanket license". It's the same fee whether you play 100% BMI-licensed songs or only 0.1%. That might be a violation of antitrust law. People pay the fee because statutory damages for copyright infringement, even once, are ridiculously high.
  • Really, the BMI license fee should be prorated, based on the % of BMI-licensed songs you play. The recent unfavorable BMI court ruling was about this issue.
  • BMI has a "consent decree" from the Justice department, making them immune from Federal antitrust prosecution. That doesn't provide immunity from private lawsuits. This "consent decree" means that the President and Congress approve of BMI's extortion scam.
  • An ambitious lawyer, prosecutor, or attorney general could pursue BMI. The best tactic would be RICO, the Hobbes Act, or antitrust law. NY's attorney general sometimes pursues claims like this. The legal system is nearly completely corrupt. I'm not holding my breath waiting.
  • RICO might apply due to BMI's excessive harassment of businesses that refuse to pay the licensing fee, along with BMI's policy of suing and threatening to sue everyone who doesn't pay.
  • BMI may send out threat letters implying the possibility of future copyright violation, even though they have no evidence of a specific copyright violation.
  • Antitrust law might apply, due to the blanket licensing policy.
  • The BMI extortion scam undermines the credibility of the legal system and political system. In that sense, it's a good thing!
  • Any lawsuit regarding copyright, patents, or trademarks is really legal extortion.
Most importantly, "intellectual property" is not property. The term "intellectual property" sets the debate in the wrong frame. "Intellectual property" is an excellent widely-hyped evil fnord phrase. It really should be called "Intellectual un-property".

Someone should build a database of public domain royalty-free music. Independent artists should be encouraged to submit to this database, rather than signing with a label. If you're an independent artist, you're encouraged "Go sign with BMI!" Then, you discover that you only get paid if you have a megahit song.

The State extortion scam provides the illusion of legitimacy to BMI's legal extortion scam. There's a lot of pro-State brainwashing regarding "intellectual property". Patents, copyrights, and trademarks are not property. A massive propaganda campaign is necessary to convince people that "intellectual property" should be treated like real property.

The USA has the best Congress and "justice" system that insiders' money can buy. BMI is an excellent example of corruption capitalism. BMI receives humongous State subsidies. Some of their profits are spent on lobbying, guaranteeing that the extortion scam continues. BMI recently lobbied for laws making it easier to extort. After these favorable law changes, BMI stepped up their extortion efforts.

BMI has purchased a bunch of Congressmen, judges, laws, and legal precedents. You probably aren't going to get a fair trial in a corrupt State court. The music licensing extortion cartel is *VERY* well connected.

Government is a huge highly-profitable extortion racket. Scum like BMI piggyback the State extortion racket to run a legal extortion racket. If BMI had to maintain their own private army, to enforce their extortion racket, then it wouldn't be profitable. BMI externalizes its extortion enforcement costs to the State.

The BMI scum are an example of why the US economy is failing. It's easier to use the legal system to extort from people, than to actually build a profitable business. BMI profits come at the expense of small business bar/restaurant owners, who typically already have thin profit margins. The BMI/ASCAP/SESAC cartel is an excellent example of the parasite class exploiting the productive class.

BMI/ASCAP/SESAC are running a legal extortion racket. It's huge and extremely profitable.

44 comments:

Scott said...

Holy cow man that's quite some post! 6792 words and 40,924 letters! It took me nearly twenty minutes just to scroll and see how long it was!

Anonymous said...

Great post, a bar owner friend of mine just got slammed for showing a recent MMA/UF match (I don't watch that stuff so I don't know what's what), with maybe 30 people in attendance that day. A few weeks later, he gets one of these letters saying "pay us 10k or we sue and by the way we have video evidence". Seems one of the "customers" was an extortion agent and captured some of it via mobile phone. Bang, 10k. He had to cough it up....so not just for music, what a joke.

Scott said...

Anyway this hits so many issues it's impossible to respond to most of it in a comment.

The tactic where Congressional Clerks sneak in corporate friendly clauses after a bill has been agreed on has been going on for over 120 years. Why is this not a criminal act? It's not just criminal, it's treason. Punishment should be execution by hanging.

The reason they use mafia tactics is because they are the mafia. Why don't we hear about the mafia being busted by the FBI any more? Because they sent their kids to Harvard and Yale and learned how to be gangsters that control the government. Everything they do is legal because the gangsters pay to have the laws the way they want them.

How is armed revolution not the only solution to this problem? Voting won't work, the system of voting and representation has been utterly subverted.

FSK said...

I've mentioned before that armed revolt doesn't work. State thugs specialize in violence, making it very easy to deal with violence. A nonviolent economic revolt is more effective.

In Las Vegas, when casino gambling was legalized, former mobsters were hired to run the legal casinos.

hank said...

First I had to pay ASCAP over $2500 now SESAC wants $400 and BMI still has to bill me which I'm sure they will do soon. How many of these extortionists do I have to pay? Maybe I should start my own extortion company and start extorting like them?

Anonymous said...

Well done! I like the word you use to describe these people, Cartels. This IS Federally Backed Legalized RACKETEERING & EXTORTION. Why not go after the bands and solo acts and license them? (because there's no way to track and find them) it's easier to FIND the businesses. How do all three of these CARTELS put it...Oh "it would be unrealistic and unprofitable" to go after individual bands. BMI, ASCAP & SESAC, SoundExchange (and how many other AGENTS of the arts that are yet to be established) all state; "it's the owner of an establishment that's making money off the songs being played." But think; (how much money the bands or solo acts are making) they are the ones truely benifiting. I live in one of the most hard hit economically depressed areas in Ohio, if you pay a solo act $200 for a three hour show (minus the 2-15 minute breaks) a small business is lucky to make, in that 3 hours, the $200 to pay him. Most times it's a gamble to have entertainment for the smaller restaraunt/bar owner, whos FOOD sales are 75 to 80 percent of his buisniess. People are coming in for dinner, not for the background music being played on the radio or cd player. Why doesn't BMI, ASCAP, SESAC & SoundExchange or the Copyright Office or the Small Buisness Organisations for that matter, have an independent polling company conduct a poll on who is coming in for dinner or and who is coming in because of the wonderful background music? Oh stupid me why would any of these 3 Cartels do that and try to be fair when there's poitentionally billions to be made each year from EXTORTION & RACKETEERING! There is no way to fight these (in bed with) Judicially backed Extortion & Racketeering Cartels. They've found (I mean learned) to benifit LEGALLY from the very tactics the judicial system found sleezy, intorlerable, underhanded and (un-American) of the Mafia and tried to fight and prosecute them with. Cudos to the Music Cartels & goverment for sticking to the little guy, also just trying to make a living. (That's sarcasim) The last half of that statement, all three Cartels state of their members, (just trying to make a living) I am a member of one of them sad to say, and have never seen even a penny. But then again I haven't written a song for someone or a band who gets plenty of radio play and I dont get the radio play from my own performed music on the stations THEY SURVEY, but I have been on several radio stations and music podcasts. Also other bands cover my music in bars & clubs around the area...but now now...I dont live in New York or California or Nashville.

FSK said...

If you're a small independent musician, you're an idiot to be a member of BMI or ASCAP. You should withdraw your membership and release your songs under a public domain (CC0) or other "creative commons" license.

Anonymous said...

Although the original intent of ASCAP,BMI and SESAC may have been legitimate at one time, the definition of public performance has become overreaching. I can understand royalties being paid for music that people listen to in a paid venue, but I totally disagree with the concept that background music or music on hold constitutes public performances, especially when the only thing performing is a CD player.

In the town I live, there is a park with a fountain. When this fountain is operating, the water and lights are synchronized. Does the person who created this fountain get royalties because the art he created is "publicly perfoming"? Probably not, especially since it is on display for all to see free of charge. Why should it be any different with the art of music?

Anonymous said...

If ASCAP, BMI & SESAC actually used the same criteria to pay out royalties as they use to collect them, it would then be unfair to call them extortionists. Sadly, that is not the case as may composers, whose music is publicly performed but not surveyed, never receive royalty payments. For example, if you choose to use "unlicensed" music for background or telephone hold, ASCAP, BMI & SESAC will make no attempt to ascertain whose compositions are being used (those having no realistic idea who deserves royalties from this usage). Thus a law should be passed granting licensing exemptions to venues that are not surveyed. This would put the burden on ASCAP, BMI & SESAC to find ways of more fairly distributing royalties. After all, does playing Montovani to pay Elton John seem fair to anyone?

Anonymous said...

I purchased a restaurant & bar recently and have had ASCAP breathing down my neck. I have a New Years band coming in... I think after that I will stop having live bands play. It's not worth it. They also want to be paid for the audio for Direct TV. I'm amazed that our government let's this continue.

Anonymous said...

Thanks for your interesting blog. I’m at a small nonprofit education organization. We had a free community event with some local performers playing original and traditional music to educate the public about folk music. Several months later, BMI has started calling and sending letters saying that we need to pay the licensing/extortion fee. None of the performers were BMI officiated.
The agents must be following a script because the used several of the tactics you mentioned, including “Our catalog has millions of songs. How do you know that none of them were played?”
Do you any insight on fair use for an educational venue standpoint. Unfortunately, I think we will discontinue music at our organization since we cannot pay the extortion fee.

Anonymous said...

You people are clueless and uneducated to the facts. I have neither a dog in this fight nor the patience to explain how wrong you are. Its undetstandable why you have the opinions that you do, though..because your only knowledge is that of your own bias. Maybe I will have the time, energy and patience to come back and explain how wrong you guys are sometime. But, if I did would any of you be open minded and listen to the real facts? I doubt it. Sounds like your mind is made uo in a way that suits your own agenda.

FSK said...

Pro-State trolls frequently comment "You're wrong, but I refuse to provide the details." That's an indication that the subject is important. See my posts on the Compound Interest Paradox and the Black-Scholes Formula.

The correct answer is "'Intellectual property' is not property." There's a massive State brainwashing campaign, that ideas and songs should be treated like property.

Another very important idea is "Taxation is theft!" BMI/ASCAP/SESAC are tax collecters. They're a bunch of thugs abusing State power. They're as evil as the IRS.

Anonymous said...

Here's something of interest. They have the same ad out for San Diego, Baltimore, New Orleans so far..

Area Licensing Manager (Outside Sales) - Las Vegas
ASCAP - Las Vegas, NV
Area Licensing Manager (Outside Sales) - Las VegasYou will act as liaison between music users and copyright owners. As an Area Licensing Manager, you will call on restaurants, bars, hotels and other businesses that play music in order to sell performing rights licenses. Position Responsibilities: The sale of performing rights licenses to new clients Research and pursue new business prospects Compensation Structure: Moderate salary base with a generous monthly commission that can greatly enhance annual compensation total Commission may include: 10-30% of team revenue Commission is based upon: meeting and/or exceeding monthly prospecting goals and meeting and/or exceeding monthly revenue goals Full-time, employees are eligible for a generous benefit package including: 25 days of paid time off, 401k, pension, medical, dental and vision coverage
Current residency within the specified territory Sales experience Avid music lover Inside sales (cold calls) experience Outside sales in person (intangible exp. preferred) Extensive travel over a large territory Excellent organizational skills related to working from a home office Ability to interact with a wide variety of clientele Computer proficiency required Prospects/Clientele can include: Bars Retail Establishments Nightclubs Airlines Taverns Hotels Adult Entertainment Venues Entertainment Parks Other information: 10 week training program, which includes field training, and at home study ***All applicants for this position must submit current salary requirements. Applications without salary requirements will not be considered***
From CareerBuilder - 2 days ago

Anonymous said...

Most of you have no idea what you're talking about. If you have a beef with the Copyright Act, then fine, but to speak of these organizations as extortionists and comparing them to the mafia is absolutely ridiculous, and makes you look like you have a mental handicap.

Under the Copyright Act Songwriters have the right to license their music for public performances. Because no bar that claims to want to support musicians would ever on their own get clearance for the songs they play at their establishment, organizations like SESAC, BMI and ASCAP have formed to collect royalties on behalf of the Songwriters. That's their whole job - they do not "own the rights," and they are not "the State." ASCAP and BMI are actually non-profits, and all three are in the Copyright Act.

Your problem is simple: you want your theft of music to be legal. Songwriters deserve to be compensated for their efforts. Do you really think it's fair to charge a $5 cover at your bar, hire an ACDC cover band, attract a large crowd, sell drinks, and not have to pay a dime to ACDC for providing you with the music that brought you your crowd in the first place? YOU ARE THE THIEVES!

Oh, and to that idiot who thinks that songwriters are idiots for signing up with SESAC, ASCAP or BMI and should just get a CC license. Really? Just give the music away for free and not ask for any compensation whatsoever? Or if its a modified CC license, just expect that bars will send you a check anytime someone plays your song? Or maybe that the one little songwriter should go around the country policing his music? Let me ask you something, do you work 40 hours a week and not expect a paycheck?

Anonymous said...

We the bar owners are taking a financial risk to pay a band that hopefully, through a cover charge and selling of food and beverage, which all have expenses associated with them.
We recently discontinued live music because of the BMI fees. Im not saying there should be no fees, but we are not the party benefiting most by the copy written music. Maybe because we have more to risk they do not hold the musicians playing the music responsible? Perhaps like our Direc TV part of the musicians pay would go towards these fees and they would be responsible to pay. They are the ones benefiting from playing a copy written song and they are without work if us bar owners do not want to pay the fees. In our case, I have to mentally write off the live music as advertising dollars, cause we sure do not reap any financial rewards.

Anonymous said...

To the individual that feels we as bar and restaurant owners are thieves, I agree with what you are saying and artists are entitled to be paid for the use of their material… the point you are missing is that we are being charged by three organizations, however, we can only play one song at a time.

I pay for Commercial XM and DirecTV (not cheap) so I can have the right to play music. Recently an ASCAP “Thug” comes into my restaurant and tells me I have to pay 800 for the right to have local unknown garage bands play their own original music… yet ASCAP does not pay them. So you can not tell me they are not extortionist. Let’s not forget, that is just one of three agencies I am contacting my attorney to review the legality of the whole thing and to prepare for the other two shoes to drop.

Look at what is happening to Pandora and Satellite, they pay more than twice as much to the artist than a radio station and yet the “THUGS” want more $ out of them… potentially driving them out of business… tell me who will be the looser in the end?. (Am I wrong?)

I propose a class action lawsuit against ASCAP, BMI, and SESAC and let the courts decide who should pay what…I am sick of spending my time on this kind of crap instead of making my business work…

JACQUIE said...

Yep - restaurant owner here, and seriously having to consider losing the music or raising prices and lowering compensation to my musicians. I agree it is the very definition of extortion, i receive letters, emails and calls daily threatening me of pending lawsuits. and here i was thinking when i opened that i was being ripped off by the ridiculous charges from ASCAP ALONE, and then SESAC and BMI come knock knock knocking at my door. Oh shit! I used a licensed song lyric - let me go hide under a rock before they send their THUGS to break my leg.

ascapclassaction@yahoo.com said...

We need to band together to get this resolved. I propose a CLASS-ACTION LAWSUIT.

I agree, only one song can be utilized at a time so why are we paying three separate organizations. One fee split between the three organizations or simply buy commercial music service and we should be covered for all (DJ, Band, Ipod, Radio, etc) If only the most popular music is getting credit and being paid for what does it matter?

If you agree, please email me and I will get something going… DON’T Be Faint of Heart I have a business partner who was part of lawsuit years back that won a $8M judgment against ASCAP.

Email me your contact info at: ascapclassaction@yahoo.com

In Favor of a Class Action said...

Liquor companies give free coasters, napkins, “Swag,” etc. to get their name and product exposure… what would happen if every retail store, restaurant and bar in the country stopped playing music and got rid of TV’s what would these musicians do? All their FREE advertising gone….How long would it take for their music to go from unknown to known and make them money without all the additional exposure? Would there be a purpose for ASCAP, BMI, SESAC, could they even survive without our money? If we don’t have music or TV’s we don’t have to pay the fees…

Maybe a Music and TV BLACKOUT needs to happen… how long would it take for reform when fees stopped rolling in?

Aren’t these fees a form of taxation and aren’t we being taxed without representation?

I like the idea of “ascapclassaction” whether it’s a class action or simple strike…

FSK said...

If you're going to promote your class action lawsuit, don't so transparently obviously post under two different fake IDs.

(ascapclassaction@yahoo.com and In Favor of a Class Action)

A class action lawsuit probably won't work. The "justice" system is totally owned by insiders.

Also, I don't own any entertainment business subject to BMI/ASCAP/SESAC extortion.

Anonymous said...

I think this is happening to me. I have a small website showcasing cruise itineraries which receives very little traffic. I posted a small 300 pixel by 250 pixel of a photo I found on a free screensavers website for a short period of time. I recently got an email from a lawyer threatening to sue me for $10,000 for copyright infringement on 2 counts and a DMCA violation accusing me of cropping out the photographers signature, payable by June 1st, 2011. The lawyer also threatened 5 years of jail time if convicted criminally. I spoke with the person who initiated the lawsuit and he was under the impression that I owned a large corporation and that they only go after big commercial businesses who have committed copyright infringement. I have no income, no assets, and neither does my husband except for that he makes a very small commissions on selling travel and without a salary. I had no idea I was breaking the law when I copied the photo from a free screensavers website. The photo I copied was advertised as a free screensaver and had no signature on it. I am a mom of a 14 year old son who is scared out of my wits. My son needs me and the thought of going to jail or having a record has made me so afraid that I cry myself to sleep every night. We don't have any savings and we could never afford to pay what they want. I am terrified that I may go to jail for something I did naively and without knowledge. It was a very innocent mistake, but the lawyer was quick to tell me that ignorance does not alleviate me from committing a crime. I own the website but he is threatening my husband & I and claiming that we have a partnership since he is on my website as a travel agent. Travel agents do not make very much money. We barely survive and are lucky to get a pizza once in a while. We have a lot of debt and live in overdraft. We do not own our own home and there's no money to go after. It's a tough economy but we work hard & struggle to survive. I have never broken the law except for a couple of speeding tickets. I am a good person and I can't believe this is happening to us. Does anyone have any advice to give me? I could surely use some right now...Thanks for reading

FSK said...

Currently, in the USA, copyright infringement is civil and not criminal. However, insiders are lobbying to have that law changed!

Anonymous said...

Thanks FSK...but they are saying that I could go to jail for 5 years because my website promotes cruises???

FSK said...

You have two choices:

1. Cave and settle.
2. Call their bluff and make them sue you. Fight it and represent yourself pro se.

Hiring a lawyer is probably more expensive than settling.

Also, since they're scum, it's pointless to write them and negotiate unless you're planning to settle. Anything you say or write will be used against you in an eventual trial.

FSK said...

Also, if you're charged with a crime, you should be negotiating with the US Attorney (Federal) or District Attorney (state/local).

In fact, the lawyer may be guilty of a crime for misrepresenting evidence and the law. Unfortunately, he will almost definitely not be sanctioned for lying.

Anonymous said...

Thanks FSK...I just found out that he owns a Domain Name company ...His voice is on their answering machine & at his law firm...I have them on tape as matching.It is this same domain company which registered the Domain name of the website I went on to get the photo??? Is that not a trap? I'm sure I can get the voices matched by a voice expert...but would I still go to jail for something like this? I thank you for your time and response, truly...

Anonymous said...

BMI and related groups COULD be doing a HUGE public service and running down kids that blast music from their cars. After all, they are in public and like it or not (almost always, "not", that I've heard from) other people are FORCED to hear it. As it is frequently impossible to tell what (and sometimes IF a) song is being played, we can assume that it is a BMI-covered song and instantly issue a fee for public performance.

Cuts down on noise pollution, and give these pseudolegal goons something useful to do.

They could really clean house here in Oakland!

Anonymous said...

I agree that the performing licensing fees for a bar/restaurant seem unfair, especially if underground music is played and those artists aren't being compensated.

Maybe it can be looked at as an operating expense, same as a liquor license. As a consumer, atmosphere and drink choices are my two deciding factors when choosing an establishment to visit. I find an establishment eerie when there are no TVs or no music is being played and feel uncomfortable and usually leave.

I work in beverage marketing and sales in the On-Premise and see direct sales results due to music and television events that drive customers into establishments. Again, I agree having to pay all three PROs is not fair, but thinking a bar/restaurant can survive without television or music is not reality.

Do the companies provide a catalog of songs they have the rights to? If so, one could be picked and create cds/playlists with approved songs and make sure to hire bands that will stay in the parameters of the catalog.

Maybe I should create a satellite or online radio station for each PRO consisting of music from their own catalog and jump on the moneymaking bandwagon - that is a complete joke, but it would make sense for these companies to offer this if an establishment is paying for the rights to play the music.

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Anonymous said...

wow, i had no idea of the scope of this issue. while artists should get paid for their work, threatening small bar owners with big lawsuits because they have a guy playing a few covers to 20 people is silly. on the other hand the commenter here that said a big ac/dc cover band bring 100s of people to the bar owes something to ac/dc has a point.

a compromise fair to both sides might look at letting the small fry get off easy and pay more attention to larger establishments. a neighborhood bar with small capacity and small crowds for small acts should have to pay really small (or no) fees and the undercover hired thugs should have to show proof of big crowds.

the larger venues making larger profits from larger acts should pay a bit more as a cost of doing business.

great article though, thanks!

Babita Sisodiya said...

Nice

Anonymous said...

No one ever brings up the unfair practice that BMI and others participate in... that is the extortion of only a few or one bar(s) in a small town. It's one thing to have to pay these fees but it's totally another when you are the only bar or business in town being made to do so.

Anonymous said...

I am a bar owner and BMI and ASCAP are both breathing down my neck. I am doing everything in my power to keep my doors open. I can't even get all of my bills paid every month, let alone have more money to give BMI and ASCAP. If not one business or venue paid those fees but kept it legal and didn't play any music, how would people hear the music to know to buy the CD, concert tickets, Tshirts ect.. So basically they want us radio stations, bars, restaurants and stores to pay them to advertise for musicians and writers. It needs to be changed and be regulated by how much money you make off of the music. If your a concert hall making thousands of dollars a night or a band making thousands of dollars per performance, then I can see paying for the right to do so. BMI and ASCAP charge $331.00 and $441.00 for having the jukebox, Then if anyone dances they charge $1.70 per person at maximum capacity, Then if you charge a cover charge they charge another charge, I don't remember how much, per person at maximum capacity. A jukebox costs $5,500.00 empty. Then you have to buy the CD's at an average of $15.00 each. Then you have to buy the paper that goes in the jukebox listing the songs and there number for around $100.00. The CD player in them goes out approx. every 18 months to 2 years, that's another $300.00. Then you have to buy new music to keep it updated. You also pay for the electricity, and replacement light bulbs at $14.00 each, there are two. I get appox. $900.00 a year out of the jukebox, of which I pay taxes on. Then of course there is the constant repairs of circuit boards and mechanical problems. Then, of course the government has to put there touch on it, they change the money so you have to spend alot of money getting you machine to take, it gets harder and harder to find old money. BMI and ASCAP want me to pay them $772.00, if no one dances.That doesn't count SESAC, which hasn't contacted me yet. They make sure you can't make money in small business in America.

Anonymous said...

I get BMI and ASCAP in big business, I don't get it for small business. I've never heard of a person going to the grocery store to listen to music and then saying, "hey while I'm here I might as well shop". Stores make zero money on playing music. All they do is advertise for music.

Anonymous said...

If you are a club, bar, or restaurant owner, and you have a complaint that the PRO (performance rights organizations) fees are too high, or that their tactics for collecting have been thuggish, then there is a legitimate complaint and I'm inclined to sympathize with you.

But I am a musician, and my experience with playing out is that everyone wants you to play for free or for tips, and it is damn near impossible to get a career started when restaurant owners expect you to somehow magically draw a crowd to a place and have them pay you a decent tip or buy your CDs on top of whatever they are having to pay for their meal. Plenty of people play for free, but most are not very good, and if they are, then they have spent hours, days, months, and years practicing, listening, and writing to get that way.
When you don't pay them or believe that you should get the result of their blood, sweat, and tears for nothing, then you are exploiting them and telling them that you believe what they do is worth nothing.

If I came into your restaurant and ordered food and decided I didn't want to pay you for my beer or something, you'd throw me out and tell me not to come back, and you'd be justified. At the very least you'd think I was a colossal jerk because it costs you money to put a plate of food and beer on the table. Well it costs musicians money to drive to a venue, buy and upkeep instruments, and produce the CDs that they sell at their shows. Not to mention the opportunity cost (there's a good Red State economics term - look it up) of the hours writing and practicing as I said before.

That would all be true even if writing a quality hit song were easy, and it is not. Even for experienced and talented writers it is a crap shoot sometimes whether or not an audience will like any particular song, not to mention the cost and trouble of getting that song on the radio.

So if you want ASCAP, BMI, and SESAC to give you a more affordable rate, fine. I would love to see that dialogue open up and get some national attention. But if you are using musicians and their music to drive business into your establishment, whether or not they are successful (you still have to pay for the lettuce that people don't eat and the fruit that goes bad), and you are not paying them YOU ARE EXPLOITING THEM AND STEALING THEIR SERVICES.

I'd love to write more, but I have to drive another 35 miles to play another show for no money.

FSK said...

Actually, the BMI/ASCAP/SESAC extortion scam makes it hard for beginner artists to find paying gigs in small restaurants.

If the restaurant has to pay the musician *AND* the extortion licensing organization, they are much less likely to do it.

If you're a small independent musician, BMI/ASCAP/SESAC are your enemies, because they make it harder for you to find paying gigs. The extortion licensing organizations only benefit bestselling musicians, and in many case, the copyright is owned by the media corporation.

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Anonymous said...

I have the same problem as most of the rest of the people who have written here, BMI is a piece of shit!

Pianoman54 said...

I am a musician that has earned my living for the last 40 years performing live. BMI, ASCAP, and any other music "licensing" companies ARE a scam..., pure and simple! Because of these legal extortion fees, I can not tell you how many times in the past few years, I have had extreme difficulty in not only booking live gigs for my band, but also booking for the same fee as the last time we performed at any of these venues that are being drained by these fees! Trust me when I tell you, that VERY little of these paid fees are going to songwriters (as they all claim). The fees are going to lobbyists, politicians, and employees of these music licensing companies. It is ROBBERY, and needs to be addressed seriously in state and federal courts! When we musicians perform at local venues, we are actually freely PROMOTING the hit songs of composers and artist, and without this free promotion, the only thing that would promote their music is the radio and paid advertising! Restaurants, Bars, and any local venues that have live music, should NOT be extorted for these greedy and rediculous fees! These licensing companies are killing business and live music for millions of musicians and venues, to serve the greed of a small handfull of individuals that have found a lucrative and easy way to extort money from hard working, and honest business owners. Please everyone, express your opinion, write your elected officals, and FIGHT BACK!

Anonymous said...

Not much is mentioned about a DJ playing cds? Same rules apply?

Anonymous said...

Does the supposed infringement hold true for live djs play cd? What if you dont have a live band? We have an establishment with a capacity of 200 but after 3 years have never had that many patrons yet. Harassment since 6 months after we opened. We watched sports no music on our tvs. How can the charge for the number of tvs we have or anything else for that matter?

Anonymous said...

Damn. I never knew this was going on. I just finish coming out of a meeting with one of my artist and we were discussing signing up with sesac. Now after reading a lot of these comments I feel the need to do more homework on this company for the benefit of artist and my entertainment company.

Anonymous said...

I would have no problem paying the fees, if they would warrantee their product and provide some indemnity. Say for example I serve someone lettuce on their sandwich and the lettuce made the customer sick, the medical costs for the customer would fall on me and my insurance company and then I or the insurance company would be paid by the vendor or distributor and so on. So if I paid ASCAP BMI Seasac, they should also be liable if someone slips and falls, or has emotional distress from too much Morrissey.

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