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How Licensing Fees Affect Live Music Performances

You may not realize it, but every time you hear a singer strumming in a bar or some pop tunes streaming in a coffee shop, that business is on the hook for those songs through a music license.  Songwriters get a cut every time one of their tunes is played.  But, there’s a concern that local live music could be a casualty of this system.

Singer-songwriter Brent Kirby is the definition of a hard-working musician.  When he isn’t playing in one of three different Northeast Ohio bands, you can generally find him wielding an acoustic guitar and singing solo in area bars and music clubs.

He loves being on stage and playing his tunes, maybe sharing something new that he’s still working on.  And he likes the fact that every time he plays one of his original songs, he makes some money.

“Say I play for three hours, and it’s all my own music, I would get maybe two or three dollars in royalties for that,” Kirby said.

Not the mega-paycheck that Paul McCartney or Kanye West get from licensing their music, but an acknowledgement that his songs are worth something.  Every bar, club, arena and even coffee shops that play music for their customers are required to pay a licensing fee for the use of those tunes.  But, Brent Kirby said there’s a downside to that.

“I don’t want to name names and, honestly, I play 25-30 gigs a month, and I can’t think of how many gigs I lost because of that, but it’s happened,” he said. 

Kirby said some of the smaller venues find the licensing requirements onerous.  It can be another line item in a budget that’s already stretched thin.  It also can be easier to simply stop offering live music, rather than paying those fees.

“It doesn’t have to be a hassle, and really, we don’t want it to be a hassle,” said John Johnson, senior vice president of licensing for ASCAP - the American Society of Composers, Authors and Publishers.  “The license that we offer is very economical, and we make it very easy for a business to obtain that license.  When you boil it down, it’s really the cost of doing business.”

ASCAP is one of three companies created to ensure that songwriters are paid for their work.  Broadcast Music Incorporated (BMI) and the Society of European Stage Authors and Composers, (SESAC), use similar calculations.  But, to make sure they’re covered, a business has to be a member of all three organizations.

Johnson said the fees are based on a number of factors, “…like the size of the place, the legal occupancy, how they’re using music – whether it’s live or recorded - how many days per week, and those types of factors, to make it fair.” 

Longtime bar-owner Norm Plonski isn’t sure how fair it is.  Last year, he decided to stop featuring live bands at the Parkview Nite Club on Cleveland’s west side.


Longtime Parkview Nite Club owner Norm Plonski recently turned over operations of the bar to his son, Mike. (David C. Barnett / ideastream)

“Let’s say they’re charging $500-600 for the year, that’s 1,800 bucks before you start paying the bands,” he said.

With liquor costs, insurance, salary and maintenance, it’s cheaper to put on Spotify, although you also need a license to stream canned music through your speakers, too.  Now, at 71, Plonski recently turned over the bar business to his son.  Mike Plonski has ambitions to bring back live music, maybe a half dozen times a year.  His dad just wishes the licensing companies would cut them a break.

“I’d like to see the small places get some kind of a nominal $100 or whatever, because they can’t afford it and they’re just going to stop,” said Norm Plonski. 

Cindy Barber can’t get rid of live music, that’s her business at the Beachland Ballroom on the city’s east side. She says the Beachland pays between $12,000 and $15,000 a year in licensing fees, and she’s concerned that not enough local musicians are knowledgeable about filing for their royalties.

“We want the money to come back to this economy,” said Barber.  “Right now, it’s going out to someone who wrote a song in Nashville, more often than not.” 

Meanwhile, Johnson says ASCAP gives warnings and ultimately pursues legal actions against businesses that don’t pay their fees.

“Our goal is never to put any establishment out of business,” he said.  “We prefer to settle amicably and early and get the business licensed. We want all of our licensees to prosper and keep using our members’ music.”

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