Memorial Day 2012 in Bend, Oregon at the Sunriver Owners Association was a festive event celebrated by 350 residents of the 4,200 home association in their brand new 1,250 seat amphitheater.  The homeowners association did not charge admission or provide the entertainment for the Memorial Day celebration.  Other local non-association related groups sponsored the musicians for the event.  This Memorial Day celebration was so popular that similar events were held that summer at their new amphitheater.  As the summer came to an end, the Sunriver Owners Association received an invoice from Broadcast Music Inc. for thousands of dollars for licensing fees for music played at their new amphitheater over the past summer.

 

Everyone is aware that downloading music from the internet or copying from any other source is illegal because of copyright laws.  Unfortunately, illegal downloading/copying by individuals still occurs and music companies and performers have had very little success in preventing this from happening.  This means that composers and performers are not able to receive royalties from direct music sales as they have in the past.  As a result organizations, such as Broadcast Music Inc. (BMI), American Society of Composers, Authors and Publishers (ASCAP), and the Society of European Stage Authors and Composers (SESAC), collect royalties through licensing fees for composers and performers, with BMI being the most aggressive at collecting these royalties.

 

A license fee gives a party the legal right to play copyrighted music to other parties in public.  The license applies whether the music is live, broadcasted, transmitted or played via CD’s or videos.  This also applies to sheet music used by live performers.

 

Copyright owners have a number of different rights including performance rights, print rights, and recording rights. Just the rental or purchase of sheet music or the purchase of a record would not authorize the public performance of such material.  This license is needed even if the venue or median does not charge admission or if it is a private venue or median; there are exceptions or, more precisely, exemptions to this license fee requirement and those exceptions will be addressed in this article.  Interestingly enough, some of the parties having these licenses include: airlines, amusement parks, restaurants, bars, universities, convention organizers, trade shows, fitness clubs, hotels, municipalities, websites, retail outlets, jukebox owners, and homeowner associations.

 

A “public” performance, as defined for licensing purposes, is one that occurs either in a public place or any place where people gather (other than a small circle of family or its social acquaintances).  A public performance is also one that is transmitted to the public; for example, radio or television broadcasts, phone system on-hold music, cable television, and by the internet.  Generally, those who publicly perform music obtain permission from the owner of the music or his representative.

 

There are a few limited exceptions or exemptions to this rule. A license is not required for music played or sung as part of a worship service, unless that service is transmitted beyond where it takes place (for example, a radio or television broadcast).  Performances as part of face to face teaching activity at non-profit educational institutions are also exempt.

 

Also, generally speaking, public performances of radio and TV are specifically addressed in Title 17, Section 110(5)(B) of the U.S. copyright law which states that any food service or drinking establishment that is 3750 square feet or larger, or any other establishment other than a food service or drinking establishment, that is 2000 square feet or larger, must secure public performance rights for TVs or radios if any of the following conditions apply:

 

• For TV, if the business is using:

– More than four TVs; or

– More than one TV in any one room; or

– If any of the TVs used has a diagonal screen size greater than 55 inches; or

– If any audio portion of the audiovisual performance is communicated by means of more than six loudspeakers, or four loudspeakers in any one room or adjoining outdoor space; or

– If there is any cover charge.

 

• For radio, if the business is using

– More than six loudspeakers; or

– More than four loudspeakers in any one room or adjoining outdoor space; or

– If there is any cover charge; or

– Music played while on hold.

 

The cost to obtain a license to perform or play music depends on the type of establishment. Typically, rates are based on the manner in which music is performed (live, recorded or audio only or audio/visual) and the size of the establishment or potential audience for the music. For example, rates for restaurants,

 

nightclubs, bars and similar establishments depend on whether the music is live or recorded,

whether it’s audio only or audio visual, the number of nights per week music is offered, whether admission is charged and several other factors.  Concert rates are based on the ticket revenue and/or seating capacity of the facility.

 

One very common misnomer is that the musicians, entertainers, and DJ’s hired at a venue are responsible for obtaining permission for music they perform or play.  It is a mistake to assume that the musicians or entertainers have obtained the necessary licenses to perform copyrighted material.  It is also a mistake to believe that the venue can shift licensing responsibility to musicians or entertainers.  The statutes say all who participate in, or are responsible for, performances of music are legally responsible. The assumption here is that the venue obtains the ultimate benefit from the performance, thus the venue must obtain the license.

 

Because of the potential financial liability, associations may need to reconsider allowing copyrighted music being played in their clubhouse, lobbies, or elevators.      WDPM

 

Copyright – William Douglas Management, Inc. 2016