YES - cover songs can lead to fines - MUST READ THIS.

[JayBird]

From the Indiana Gazette, January 23, 2007, Page 1 and Page 12

Local club violated music copyright, lawsuit claims

By Randy Wells

Patrons of an Indiana bar who enjoyed an evening of live music last fall may not have realized that songwriters Elton John, Don McLean, Ron Van Zant and others were not being properly compensated for their talents during the toe-tapping sing-alongs, according to a lawsuit filed in federal court.

Broadcast Music Inc., a New York City-based organization representing the public performance copyright on behalf of its affiliate songwriters and music publishers, last week sued doentown Indiana's H.B. Culpeppers for copyright infringement. The suit was file in federal counrt in Pittsburgh. Jerry Bailey, BMI's media relations director, said the on September 30, solo singer and guitarist T.J. Isenberg entertained the Culpeppers crowd. Amoung the many songs he performed were Don McLean's "American Pie", Elton John's "Tiny Dancer", Lynard Skynard's "Free Bird" and others penned by BMI songwriters and composers.

The problem was, Bailey said, that Culpeppers was not licensed by BMI to allow live perfromances of material written by or published by BMI affifilates.

In the Culpeppers audience that evening was a "researcher", a woman sent to the bar by BMI. She made detailed notes on the bar and what songs were played, minute by minute. The researcher even copied information from the occupancy permit on the wall of the bar and picked up receipts to documnet she was there at that time.

Bailey said the researcher was sent to Culpeppers because BMI has been aware since 2000 that Culpeppers provides musical entertainment, and since February 2005 BMI has been trying to convince Culpeppers' owners to have their establishment licensed. Since 2005 the owners have refused BMI's attempts.

"We made 47 calls to the business, have spoken to Harry E. Spielman six times, and have sent 21 letters to the business", Bailey said.

Spielman, the president of Culpeppers, and Berard Bruns, the bar's vice president, secretary and treasurer, are named as defendants in the suit.

"I really don't have much to say" on the suit, Spielman said Monday. "I thought all the fees were paid."

When asked about the repeated contacts in writing and by telephone by BMI representatives, Spielman again commented that he didn't have much to say. And when asked if the owners planned to defend the bar in court, he said, "I'm going to try to cooperate."

Bruns did not return a call Monday seeking comment.

According to Bailey, BMI's role is to provide businesses with copyright clearance to a repertoire of about 6.5 million musical works - roughly half the music played in the United States every day - while compensating more than 300,000 copyright holders when their works are performed.

Bailey said most songwriters earn most of their income from royalities collected from the use of the public perfromances of their songs, not from the sale of CDs. And the average songwriter earns less than $5,000 annually in public performing rights royalties.

Radio and television stations, hotels, restaurants, nightclubs, concert promoters, private clubs or fraternal organizations, and offices and stores that use "music on hold" for telephone customers are amoung the businesses licensed by BMI. The owner of the business that benefits from the public musical performance, not the performer, is licensed. And the proprietor of the business in which the copyrighted music is perfromed is liable for any infringement of copyrighted music in his or her place of business.

"In practice, we don't go after the band," Bailey said.

The cost of the license depends on several factors, including how many people can fit into the venue where the music is performed, how many times a week live performances are offered, and whether there is a cover charge, dancing or karaoke.

"The greater music contributes to the appeal of the club, the more expensive the license," Bailey said.

He estimated the yearly license for Culpeppers would be a little under $3,000.

BMI collects the license fees from users of music and distributes those fees in the form of royalities to its affiliates.

Certain public music performances - such as those at weddings or when an instructor or student plays during face-to-face teaching activites in nonprofit schools - are excempt from BMI license requirements.

Bailey said BMI only resorts to a "few dozen" lawsuits annually and 95 percent of them are settled out of court.

Bailey said that in addition to the telephone calls and letters from BMI, the Culpeppers' owners were also notified by BMI's pre-legal department that a lawsuit was imminenet if the bar did not get a license.

"Anytime we sue someone, they've had ample warning," Bailey said.

"They (Culpeppers' owners) had all the opportunity in the world to check us out...and get legal advice. ... Lawsuits are a last resort. But it's necessary in some cases to protect the rights of the songwriters."

The suit against Culpeppers seeks unspecified damages, legal expenses and a license "going forward," Bailey said.

Under U.S. Copyright Law, copyrighted infringement statutory damages can range from $750 to $30,000 for each song performed, he said.



GIVE ME A BREAK BMI! Do they take into account how many cds from those artists might be sold due to a patron liking a song being covered and wanting to have the original song so they can listen to it at anytime. I think cover bands help sell cds for these artist.

[SuffrInLys]

that would be a big step for original artists

[Merge]

It was only a matter of time before this happened. Hopefully they'll stand by their word and won't "go after the band".

[lonewolf]

This is how its been for at least 40 or 50 years, maybe more.

It is the responsibility of the venue to pay yearly royalties to BMI and/or ASCAP if they want to have musical entertainment using their artists' music. I believe this applies to jukeboxes as well.

In 1982, my band Forces had 3 hours of original material. The Blandburg Legion didn't want to pay BMI, so we were the only band that played there because by doing originals all night, they didn't have to pay any royalties.

[DirtySanchez]

So this would apply to DJ's as well by the sounds of things, or juke boxes
for that matter, if you have to pay to play hold music. Fuck I better change my ringtone, that could cost me $30,000 per phone call.
And I thought phone sex was expensive.

[Punkinhead]

that would be a big step for original artists

I actually thought the same thing. It really sucks but, the impact something like this would have on the local scene would be interesting. I'm not saying good or bad (and that completely is from your own view if you think it's one or the other) but, interesting.


Does this also mean DJs would be liable?

[JayBird]

It really doesn't have to do with the artist. The artist isn't so much affected unless they are an older bunch of guys playing oldies to an older crowd that only wanted to hear covers of oldies. The majority of 50 year olds probably won't be trying to do originals. So these bars and clubs are going to be made to pay a fee so these bands can come entertain. Not every band in the music business is out to be an original band. I'm all about original bands, but like i said, my parent's don't go out on the weekends to hear metal bands play. They go out to see oldies cover bands...music from the 50s, 60s, 70s.

[MeYatch]

I covered the same topic a couple months ago

http://www.rockpage.net/phpbb2/viewtopic.php?t=12488

lonewolf pretty well sums it up. Its the way it is, pay the licensing fee, or get sued. For what its worth, it doesn't appear that anyone has gone to jail for this, as the thread title suggests.

the fact that CD sales might be generated by performance of the songs by cover bands is somewhat negated by this claim

Bailey said most songwriters earn most of their income from royalities collected from the use of the public perfromances of their songs, not from the sale of CDs. And the average songwriter earns less than $5,000 annually in public performing rights royalties.

If Elton John wants to play Tiny Dancer in an unlicensed establishment, thats fine. If I want to play a song I wrote in an unlicensed establishment, thats also fine (not that I am a BMI member anyway.)

However, this is how it goes. You pay the fees, if you don't, and you get caught, you will face litigation, against a company that has never lost a lawsuit, ever.

[MeYatch]

So this would apply to DJ's as well by the sounds of things, or juke boxes
for that matter, if you have to pay to play hold music. Fuck I better change my ringtone, that could cost me $30,000 per phone call.
And I thought phone sex was expensive.

Yes, it applys to establishments that hire DJs, or have a jukebox.

Also, I seriously doubt your ringtone constitutes a public performance of a song, but I suppose a case could be made for it. If you downloaded your ringtone from your service provider, or some other usual channel (I.E. you didn't make it yourself) whoever you got it from probably paid some kind of licensing fee in order to make the ringtone available to you.

[DirtySanchez]

What if I'm on stage and my phone rings?

I'm just being a dick, but I've seen dumber debates on RockPage.

[MeYatch]

I sort of figured, but like I said, I think a case could be made for a ringtone being a public performance of a song. I would imagine its covered in whatever they have to do to make the song available to you in the first place.

[RobTheDrummer]

Looks like another hit to the PA music scene.

[P MAC]

This is not breaking news. You can bet the club owners are well aware of this issue. BMI and ASCAP are both pretty powerful entities, and have been collecting lisencing fees from establishments for years. Most ,if not all, of the local places that have live music are already lisenced. This is not likely to have much, if any, impact on the local music scene.

[Trucula]

I always thought it was OK to cover the music but illegal to record it without permission. And some were trying to say that if you changed one word it made it legal. How this would be true would amaze me!...It goes back like 10-15 years ago when there was a court trial (can't remember who it was)on a couple bands who copied a guitar riff. Like a 3 cord riff matched up wasn't done over and over.
Then again on the other hand I can name a few covers that should never be covered again, but tht was covered in another thread!!

[JayBird]

The bad thing about this is that the club is judged based on an occupancy document. Say a club can hold 800 but typically only has 200 people at a live music show. They pay based on the 800 occupancy...correct? Some people don't get much $ from their live music, but they still support live music for whatever reason.

I remember my friend opened a restaurant and had speakers placed in the ceiling so he could have music playing in the dining area. Once he learned he was going to have to pay a license to play radio music, he declined to ever get the radio hooked up to the speakers.

I just think this, in the long run, will cause more venues to steer away from having music in their venue. Plus based on the amount of money the artist gets from their royalities, it doesn't seem worth the effort on BMI's part to try and get this money. Trust me...Elton John will make more from selling his CDs vs. royalties from a young kid covering one of his songs.

[MeYatch]

The bad thing about this is that the club is judged based on an occupancy document. Say a club can hold 800 but typically only has 200 people at a live music show. They pay based on the 800 occupancy...correct? Some people don't get much $ from their live music, but they still support live music for whatever reason.

I'm not 100% sure, but I think that's taken into acount. There are a number of factors that influence the cost of a license.

I remember my friend opened a restaurant and had speakers placed in the ceiling so he could have music playing in the dining area. Once he learned he was going to have to pay a license to play radio music, he declined to ever get the radio hooked up to the speakers.

smart move, because if he'd been caught, he would have been ordered to pay whopping fines.

I just think this, in the long run, will cause more venues to steer away from having music in their venue.

this is already way past "the long run" maybe when this practice first started it did cause venues to steer away from live music, but that was before I was born.

Plus based on the amount of money the artist gets from their royalities, it doesn't seem worth the effort on BMI's part to try and get this money. Trust me...Elton John will make more from selling his CDs vs. royalties from a young kid covering one of his songs.

Elton John probably can make more money from selling CDs vs performing royaltees. However, a relatively young band that just got a recording contract makes very little money from CD sales. You give up the rights to your recordings when signing a record contract (usually,) and you keep the performing rights.

Elton John may not get much money from the sales of his earlier material, but he still gets all the performance royaltees.



I'm not saying this practice is right, but its the way it is. It always seems like a case of the itty bitty club owner versus the giant evil BMI corporation, but try to remember that BMI represents the even smaller songwriters. I know nobody cares about Elton John, but BMI represents a TON of songwriters, I guarentee you there is someone you like that they represent.

[J Michaels]

the fact that CD sales might be generated by performance of the songs by cover bands is somewhat negated by this claim

Bailey said most songwriters earn most of their income from royalities collected from the use of the public perfromances of their songs, not from the sale of CDs. And the average songwriter earns less than $5,000 annually in public performing rights royalties.

Sales of CDs being generated is NOT negated by this claim. The quote only says that an artist gets more $$ from public performance royalties than from sales of their CDs. There are no implications one way or the other about CD sales.

And I would bet dollars to donuts that the majority of the public performance royalties do NOT come from the money BMI collects from small-town bars (or big town ones for that matter) that pay their fees (3000 freaking dollars? for a bar in Indi-goddamn-ana, Pennsylvania? Gimme a fuckin break).

My guess is that the majority of the public performace royalties an artist gets come from the feels that are paid by radio stations & the corporations that own them (ClearChannel, etc.) (BTW - I have no data to back up my opinion, but I would be quite surprised if I am wrong.)

The BMI lawyer cleverly uses that piece of information to make their pursuit of this lawsuit not only seem justified, but somehow wrong NOT to sue the bar (cuz the poor artists will go broke if Culpeppers doesn't ante up.) While the point he makes may be true, it is somewhat misleading in the way he presents it as a rationale for taking a small business owner to court.

I'm not saying the fees are wrong in principle - if I made my living off the music I wrote, and people were out there making money playing in bands playing my songs, and bars wre making money in part by having bands that played my songs, I think it's justified to recoup some of that. But $3000 ?? I would ALSO venture a guess that the majority of that money never gets paid out to artists, but most of it goes to BMI in "administrative costs" and so on. Ah, the joys and cleverness of being the middle man.

[moxham123]

BMI & ASCAP have been targeting establishments in Indiana County and parts of Cambria County very much the last couple years.

The license fees are based on a scale determined by the capacity of people that can fit into the building and how many days a week there is entertainment along with the following:

Live bands & DJ's and/or karaoke - highest fee
DJ's and/or karaoke
Live bands only
DJ's only
Karaoke only
In house sound system playing CD's or tapes

The jukebox license fees are paid by the company that provides and maintains the jukebox for the establishment (not the bar itself) and is paid for out of the money that is put into the jukebox. The jukebox keep track of every song that is played on it. The only way this fee would be paid by the bar owner is if he or she owned the jukebox and maintained it themselves.

Some places that have gone through the legal process or refused to pay the license fees in Indiana County have either quit having bands and DJ's completely or have opted for the lower fee to have DJ's and quit having bands. This has cost us several places to play and many gigs. The bar owners are losing lots of money because they made there most profits when they had bands. The do not do as well with DJ's.

[SpellboundByMetal]

Thats too bad...time to write your own material

[MeYatch]

Sales of CDs being generated is NOT negated by this claim. The quote only says that an artist gets more $$ from public performance royalties than from sales of their CDs. There are no implications one way or the other about CD sales.

I said "somewhat negated." I have no idea how many Elton John CDs would need to be sold to make up for the money from performance royaltees, as I have no idea how much money Elton John makes per CD, or how much he makes from performance royaltees.

And I would bet dollars to donuts that the majority of the public performance royalties do NOT come from the money BMI collects from small-town bars (or big town ones for that matter) that pay their fees (3000 freaking dollars? for a bar in Indi-goddamn-ana, Pennsylvania? Gimme a fuckin break).

My guess is that the majority of the public performace royalties an artist gets come from the feels that are paid by radio stations & the corporations that own them (ClearChannel, etc.) (BTW - I have no data to back up my opinion, but I would be quite surprised if I am wrong.)

I'm sure you are probably right. But several thousand dollars a bar, and several thousand bars accross the country, it ads up to a hell of a lot of money. You can bet your sweet ass that if nobody had to pay performance royaltees, the artists would sure as hell notice the difference.

The BMI lawyer cleverly uses that piece of information to make their pursuit of this lawsuit not only seem justified, but somehow wrong NOT to sue the bar (cuz the poor artists will go broke if Culpeppers doesn't ante up.) While the point he makes may be true, it is somewhat misleading in the way he presents it as a rationale for taking a small business owner to court.

its not a matter of artists going broke if Culpeppers doesn't ante up. Its the next bar, and then the next bar. If they don't defent the rights of their members, they will lose the rights.

I'm not saying the fees are wrong in principle - if I made my living off the music I wrote, and people were out there making money playing in bands playing my songs, and bars wre making money in part by having bands that played my songs, I think it's justified to recoup some of that. But $3000 ?? I would ALSO venture a guess that the majority of that money never gets paid out to artists, but most of it goes to BMI in "administrative costs" and so on. Ah, the joys and cleverness of being the middle man.

BMI is a non-profit organization. Thats not to say that the administration and lawyers don't make money, however.

$3000 is $250 a month. Its a bill, it must be paid. Its the simple truth. Its sort of like saying "I can't believe that they turned the electricity off at Culpeppers just because they didn't pay the electric bill! How are bands going to perform without electricity?"

[bsaller]

I always thought it was OK to cover the music but illegal to record it without permission. And some were trying to say that if you changed one word it made it legal. How this would be true would amaze me!...It goes back like 10-15 years ago when there was a court trial (can't remember who it was)on a couple bands who copied a guitar riff. Like a 3 cord riff matched up wasn't done over and over.
Then again on the other hand I can name a few covers that should never be covered again, but tht was covered in another thread!!

That's plagerism(SP). That's a whole other bag of nuts.

[Victor Synn]

I think certain people want to see this issue as waving the battle flag for original music and it being a blow to the cover band community. As Lonewolf said...this type of thing has been happening for decades. And the fact of the matter is that the major players in terms of clubs offering live entertainment are paying this cost. In all honesty, it's a drop in the bucket annually if the club is bringing in the right entertainment to cover the cost. Ideally, a club could have that $3,000 paid in less than a month with the right entertainment placed on their stage week to week, regardless if it's cover or original. There's really no sense in doom-saying cover bands based on one local lawsuit that will basically be settled out of court anyway. Sucks for the club owner, but if BMI gave the owner repeated warnings, then it's the owner that has to ante up. Simple as that. I'm in a cover band. However, I wouldn't want to see the people that created the intellectual property we cover to not get what they deserve either. Same as any other original act, big or small, covered by BMI/ASCAP. This area is what it is. And cover bands are the thing here. So local bar owners would be committing financial suicide to not pay this cost every year because in the end, the money they generate from cover bands in 12 months covers that cost and then some.

[SpellboundByMetal]

yeah, dude. i agree with you.
I dont think bands should not be allowed to play covers. You are right, coverbands are the thing here. sad, but true. im coming to see you guys play on saturday Vic!
its my b-day on saturday! HAHA!!! Itll be the first time i have ever seen you. i also with be helping DATASOUND out there on whatever he needs. Itll be AWESOME to setup and teardown the show. SEE YOU SATURDAY VIC!!!

[songsmith]

I don't see BMI and other PRO's nailing artists... they can't, they need artists to continue the revenue stream. If BMI boned me, I'd go to ASCAP or SESAC, or one of the others. They know that, so they strong-arm the bar-owners.
P-MAC's right. This has been going on for a really long time, and won't end soon.
Incidentally, did anyone know that Frank Sinatra once had ASCAP by the scrote tight enough that they stopped licensing rock songs, which were stealing valuable bobbysoxer royalties from Ol' Blue Eyes? BMI stepped up to provide their services in the interim, and ASCAP had to relent or go broke. The Chairman of The Board tried to stop rock and roll, and to quote Dee Snider, "You can't stop rock n' roll."----->JMS

[moxham123]

A couple years ago, we were playing a venue in the Blairsville area. BMI & ASCAP went after the owner to pay the license fees. It was a smaller venue that had D.J.'s every Friday and bands every Saturday and drew a nice crowd on band nights and not many people for D.J.'s

The owner was told that his annual license fees would be $1,200 to have the bands and D.J.'s (bascially, it would work out to $11.50 per night of entertainment for 104 dates a year) The annual license fee for just the D.J. was $600 for the same amount of dates. I can't understand how the D.J. fee is lower since they are playing the actual recording of the song by the orginal artist versus a band doing their own version of the song.

The owner's attorney told him he would have to pay a license fee in order to continue to provide musical entertainment so that he could attract people. For spite, the owner said nobody was going to force him to pay $1,200 a year and he cancelled all the bands and went with the D.J. fee and lost much business. He could not understand that it was $11.50 per date and he would make that up on bnd nights with larger crowds. He was looking at the annual fee and not at the cost per date.

Several bands lost frequent work there.