Licensing Fees and Live Music

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Part of what makes any bar experience complete is the live music.  Big names often start in bars and clubs where they are just another act hoping to make it.  The Beatles played the Cavern Club; Ella Fitzgerald, Louis Armstrong, and Duke Ellington had the Cotton Club.  Is this era ending though?  Is live music going the way of smoking in bars?  While it is not likely for live music to be totally eradicated from bars and clubs, licensing companies are making it more difficult for many bar owners to allow bands to play.

How many times have you heard “Brown Eyed Girl” or Margaritaville” in a bar?  Technically, each time a band plays a cover, the club owner needs to secure the rights from one of the three major licensing companies (Broadcast Music Inc., the American Society of Composers, Authors, and Publishers, or SESAC).  Similarly, whenever a song plays on the radio, television, or in ads, the producers must have paid for its use.

For instance, BMI owns the rights to songs by Taylor Swift, Mariah Carey, Lady Gaga, and Kanye West, among many others.  If a band wanted to play songs by any of these artists, the club or bar would have to pay BMI a licensing fee.  Instead of paying for each individual song, they can purchase a blanket licensing fee, which covers all the songs that company handles.  In essence, what this means is that any song other than an original would require a licensing fee to be paid.  A blanket fee runs about $650 a year – from each company.

The law is completely on the side of the licensing companies.  They do own the rights to the songs, and they argue that they have to ensure that the artists they represent are receiving fair pay for their songs.  But small bands, who have seen their gigs dry up as clubs choose to end live music rather than wrangle with the licensing companies, disagree.  Dan Preston of St. Cloud, Minnesota band Preston and Paulzine says, “Fully 50 percent of the clubs that we were gigging at five years ago have shut down their live music…They’re [the licensing companies] protecting Bruce Springsteen, who doesn’t really need a whole lot more money.”

While the law is on their side, it is unfortunate that such strict regulation will hurt the people that make the least amount of profit off these songs and endanger live music in its most accessible form.

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