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Are Music Licensing Laws Disproportionately Hurting Small-Town Venues? One Owner Says 'Yes.'

Roper's Saloon and Cafe 37 sit on the historic West Plains Court Square. (Photo credit: Roper's Saloon Facebook page)

A restaurant owner in a small town is fighting what she says are unreasonable fees for hosting live music in her venues.  As KSMU’s Jennifer Davidson reports, the owner feels small town venues like hers are caught between a rock and a hard place when it comes to providing live entertainment.

First, here’s how it works if you want to host live musicians who play even one “cover” song, or a song that is copyrighted work:  you need a license. You can get a license from three major music rights organizations—BMI, ASCAP, or SESAC.  BMI deals with the superstar artists and songwriters.

Toni Chritton Johnson, who owns Café 37 and Roper’s Saloon on the West Plains square, got a call from BMI after a local musician played outside her restaurant during a downtown community event.

“And he said, ‘Can I play on the sidewalk in front of Café 37?’ And I said, ‘Well, it’s a city sidewalk, so you’d have to ask the city. I’m not going to stop you.’ So he went ahead and played. And I never even went outside that night—we were so busy in the restaurant.  About a week later, I got a call from a BMI representative saying that he was looking at this guy’s website, and saw that he was playing in front of our restaurant, and we didn’t have a music license.  And I said, ‘But he was playing on the city sidewalk during the downtown stroll. We didn’t hire him to play.’ And he said, ‘But he has a speaker and an [amplifier], clearly plugged into your building. And if he’s drawing power from your building, you need to have a license,’” she recalls.

She paid a licensing fee to BMI, and hosted live bands.  Those fees, Johnson said, were not extraordinary – they amounted to about four dollars and some change per person, per year.  But her business is required to pay based on a rate of having one live gig a week—much more often than she hosts. And, she’s charged based on her restaurant’s maximum occupancy, 70 people, even though it’s rarely full.

“The law just doesn’t take into consideration small venues in small towns.  I think it’s based on a big nightclub in New York City, maybe, or people who are drawing in 20,000 dollars a night in revenue. And it’s just taking into consideration that, in a small town like West Plains, even though we could seat 70 in Roper’s, most likely, we’ll have 30 or 40 on a good night—on the best nights. We’ve had nights when we had five to 10 people, or sometimes none, for concerts,” she said.

She wasn’t thrilled about having to pay the same rate as a bar that operates at full capacity and hosts live bands every week.  But what really upset her, she said, is when BMI learned she had a huge upstairs ballroom which she rents out for weddings and private events...and they began charging her for the occupancy of that, too, even though she didn’t have live music there. That ballroom holds 300 people…so her licensing bill jumped from about $430 to $2,300.  She said BMI started calling and sending letters, relentless about this bill she didn’t feel she should pay.

“Finally, last week one guy [at BMI] said, ‘Well, if you’ll sign an affidavit that you’ll never use it for live music, then we might be able to exclude the space.’ And that’s when it hit me that we have one concert this year that somebody wants to have. And I said, ‘Can you make a provision for me to just pay a little extra for that?’ And he said, ‘Absolutely not,’” she said.

So, by opening up the ballroom that one night for a concert, she would have to pay a whole year’s worth of licensing fees—something she says she would lose money on.  She’s thinking about canceling the show, which has the musicians upset.

According to its website, BMI represents “more than 8.5 million musical works created and owned by more than 600,000 songwriters, composers and music publishers.”

[Music:  Scott Shipley]

 “Well, speaking as a songwriter, that’s the only compensation, really that we get—royalties on our work,” says Scott Shipley, a musician who lives in West Plains and who tours internationally. He says he feels the licensing fees are reasonable, especially since bars and restaurants tend to make more money from food and drink sales when there’s live music.

“Not to compare any one writer to Michaelangelo, but everyone started somewhere. You wouldn’t expect Michaelangelo to paint for free, so why would you expect Johnny Cash to not get royalties for the songs he wrote,” Shipley said.

Shipley played guitar with Johnny Cash and Kid Rock. He’s not a member of BMI; rather, he’s a member of ASCAP, which pays out money to both small and larger musicians, of all types of song.

“Last year, [ASCAP] took in around $944 million in royalties. And they paid out [about] $828 [million] in royalties.  Their average operating expense per annum is around $11.6 million. And that’s guys having to go around and collect fees, and office stuff, and tracking down the address of Billy-Joe Jim-Bob who moved from Cleveland to Cincinnati and we’ve gotta go find him so we can send him his check. So, a business that operates at about 10 percent—that’s pretty modest,” Shipley said.

The royalties paid out to songwriters are based on air play, and album and track sales. Shipley says the checks songwriters receive aren’t enough to build a house on – they’re nickel and dime checks that all add up.  And, Shipley says this complaint about not wanting to pay the licensing fees isn’t new.

“This comes up continually, all the time and all over the world, really. It’s like paying taxes. People complain about paying taxes. People complain about paying sales tax on a car and licensing on a car. It’s just part of the deal. It’s part of supporting the system,” Shipley said.

Meanwhile, Toni Chritton Johnson says she understands the need for fees. She just feels the fees are skewed in a way that is hurting small-town bars, restaurants and, down the line, musicians.

“I lived in Nashville before I lived in West Plains. I have a lot of friends who are singer-songwriters, and of course I want them to get paid. But I think it’s just not fair the way they assess the amount of the license. We have concerts every once in a while, and maybe have 30 or 40 people. But they’re trying to base it on just occupancy—the fact that we could possibly have ‘X’ amount of people—that’s what you pay on,” she said.

She says she’s trying to make live music a staple of her hometown of West Plains, but the music licensing agencies are making it hard for her to do that and still make money. So, she’s considering not hosting anymore live music. And in this town known for its music legends, like Porter Wagoner and Jan Howard, all parties agree that would just be a crying shame.