No Covers: Dealing with Performance Rights Organizations

Most people have certain expectations when they walk into a cafe – the smell of freshly baked goods co-mingling with brewed coffee and hardworking baristas smoothly transitioning from one task to another. One might hear a grinder humming, along with the strum of guitars from a local indie band. Nowadays, however, more and more cafe and coffee shop owners are choosing to pull the cord and turn the music off.

PROs, or performance rights organizations, like ASCAP and BMI are ramping up efforts to collect fees from retailers who play copyrighted music without a license. The fees vary in amount based on seating capacity, the number of live performances in a given week, etc. and for an average cafe can range anywhere between $150 – $500 per year, per organization. If you are a retail business owner, I’d be willing to bet you’ve already been contacted. If not, you probably be will eventually.

I’m commonly asked the best way to deal with PROs. I don’t profess to be an expert in entertainment law, but I recommend evaluating what live and recorded music brings to your business and go from there. While it’s impossible to quantify in dollars exactly how much cash music brings in, I’m guessing that most, if not all, of our customers will see the value in offering music. We have many customers that purchase from satellite radio providers like Sirius, who pays the royalty fees as apart of the cost, which starts at around $30 a month.

It’s important to note that the PRO fees covered by radio service providers do not cover live copy-written music performed in your cafe. So, can you avoid paying the royalties? Not likely. PRO reps are often threatening, brusk and incredibly persistent. I don’t mean to scare you, but once they get you on their radar, expect a flood of phone calls, letters and visits threatening legal action until the fees are paid.

If you want to avoid the harassment and the capital investment, look into a satellite radio option to cover the background music and demand all live acts perform original compositions only and enforce the policy as strictly as possible. While these options will not keep you 100% free-and-clear of the PRO network and their guidelines (e.g.,”What do you mean they perform all original songs? How do you know for sure? Do you know how many songs are in our catalog?”), it shows a genuine desire to comply and might be enough to get you by.

The bottom line is that according to a recent article in the Boston Globe, ASCAP files between 250-300 copyright infringement suits a year, so ignore them at your own risk.

Mike Adams
Stockton Graham & Co.