To use music as part of any business enterprise, a license is required.
But who to pay, how to pay — and how much — can be confusing.
By Tara Good
Any business that plays music for its patrons must pay for the privilege to do so. This includes having a musician or band play live, having a TV on playing music videos or performances, or simply using a streaming service in public areas. But who to pay, how to pay — and how much — can be confusing. WineAmerica is working to help wineries navigate these murky waters.
Basically, to use music as part of any business enterprise, a license is required. Licensing protects the intellectual property of a songwriter and ensures they get paid for their work.
Songwriters and musical artists generally don’t license directly with businesses. Instead, they join one or more Performance Rights Organizations (PRO), which are responsible for collecting income on behalf of songwriters and music publishers when a song is publicly broadcast or performed. There are four major PROs: ASCAP, BMI, SESAC and GMR, each representing a different catalog of songwriters.
Since 1941, the Department of Justice (DOJ) has forced ASCAP and BMI (which together control more than 90% of all musical works) to adhere to consent decrees designed to prohibit anti-competitive practices. These include “blanket licenses,” which grant full and immediate access to the entirety of the PRO’s catalog upon request and subsequent purchase. These blanket licenses must be the same for each “similarly situated” business. This means, for example, that two wineries of the same size and using the same amount of music cannot be charged differently.
There’s also a prohibition on exclusive licensing and other alternatives to a blanket license. A performer who holds the rights to their music, for example, must be able to directly license their songs outside of the PRO. Additionally, PROs must offer alternatives to the blanket license. Both requirements help ensure that a blanket license is not the only license available.
Still, challenges remain.
Licensing confusion
As part of its industry advocacy, WineAmerica works to educate lawmakers regarding the challenges wineries face when licensing music. WA also offers assistance to the wine industry, educating winery owners how best to license music and how to navigate the challenges that arise. These challenges include negotiating with SESAC and GMR, which aren’t governed by the consent decrees and represent far fewer musical works — but often extract fees equal to, or even higher, than those charged by ASCAP and BMI.
Fee schedules are further convoluted by a lack of transparency. The PROs’ failure to provide access to accurate and reliable data– specifically, which PROs represent which songwriters –has been a longstanding problem within the music industry. Recently, ASCAP and BMI teamed-up to build Songview, a database comprising their impressive catalogs. Unfortunately, without the participation of all PROs, Songview remains incomplete. Without a clear database of options and licensing requirements, businesses are often left to guess what licenses they need and what music is covered.
Despite the requirement that the PROs offer meaningful alternatives, in practice they often offer one-size-fits-all licenses. Businesses are denied the option to pay based on actual day-to-day use and are instead forced to purchase “take it or leave it” licenses that cover more substantial music use.
Wineries understand the importance of copyright law and want to see creative artists be paid their fair share. This desire is undermined when small businesses experience abusive tactics by PRO representatives seeking to collect licenses. These include disruptive and coercive behavior, harassment and making unwarranted royalty demands. In recent years, several states have enacted codes of conduct to regulate the way in which PROs can interact with licensees. Still, PROs are finding ways to gouge music consumers and license holders.
Several years ago, the second circuit court approved “fractional licensing,” which lets a PRO not offer the full use of a song, but only the “fraction” of the work it controls. This means, if a song has three different songwriters, and each songwriter is represented by a different PRO, then each PRO licenses only their fraction of the song. This arrangement forces businesses to obtain multiple licenses for a single song or be exposed to enterprise-threatening statutory damages for copyright infringement.
Working for clarity
WineAmerica is working with the MIC Coalition in Washington, D.C., to address these ongoing issues. The MIC (pronounced “mike,” as in “microphone”) Coalition is composed of businesses and associations that provide music in millions of local retailers, stores, hotels, restaurants, bars, breweries, taverns and live event venues throughout the country, as well as over the nation’s airwaves and the Internet. Members of the MIC Coalition are committed to working with policymakers to address challenges and ensure that the future licensing of the public performance rights of musical works continues to promote robust competition and benefit all interested parties.
To learn more about how to license music legally, visit wineamerica.org/music.
______________________________________________________________________
Tara Good
Tara Good is vice president of development for WineAmerica (WA), the only national wine industry association in the United States. WA is a 500-member strong organization that encourages the growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy. Membership is encouraged to support the important work of WA, which benefits all U.S. wineries. Go to https://wineamerica.org/ for more information.
