Businesses sound sour note on music royalty payments

Businesses sound sour note on music royalty payments


Journal Washington bureau

Washington, D.C. Dave Wiganowsky was tending his bar in Madison one day when a man walked in and asked, “You got any idea why I’m here?”

“To spend money, I hope,” Wiganowsky replied.

“You haven’t paid your fees,” the man said, pointing at the 47-inch big screen television in “Wiggies” bar, located behind the Oscar Mayer plant.

The fees are royalties that US copyright law allows to be collected whenever licensed music is played in a public place. That includes a commercial jingle that pops up during a timeout in a football game being shown on a tavern TV, a Top 10 hit that comes over the radio in a dentist’s waiting room or a compact disc blaring in a health club.

Believe it or not, the law actually is enforced by music licensing groups such as the American Society of Composers, Authors and Publishers, and Broadcast Music Inc., two organizations that hold the licenses to most songs played in America. The organizations have field representatives who monitor businesses and will take to court those who refuse to pay a modest yearly fee for the right to play the background music.

Rep. F. James Sensenbrenner Jr. (R-Wis.) introduced legislation this week that would exempt retail establishments from having to pay the fees.

“This is small-business relief,” Sensenbrenner said. “Anything that is broadcast is in the public domain, and nobody should be forced to pay a fee for simply having a radio or a TV on in a commercial establishment.”

What’s at stake is no small change.

ASCAP collects $60 million per year in fees from taverns, restaurants and other retailers; BMI collects more than $50 million. Cutting off those payments would reduce a songwriter’s royalties by up to one-fifth, said Bill Thomas of ASCAP.

That might not put much of a dent in the profits enjoyed by a superstar like Bruce Springsteen, but it would hurt the 90% of ASCAP’s 65,000 members who cannot make a living from their music alone, Thomas said. “All our members are small-business people, as well,” he said.

“It’s morally the right thing to do,” Thomas said of paying the fees. “That person who wrote that piece of music literally owns that piece of music, and they deserve to be compensated when the music is used.

“The important thing is we’re not talking about a lot of money here. We’re talking about $300 to $400 a year {in fees} for most bars, restaurants and taverns in Milwaukee.”

Not surprisingly, tavern and restaurant operators don’t see it that way.

“They’ve got the biggest scam going,” said Kevin Kleczka, owner of La Chalet, who pays a licensing fee through his jukebox vendor but refused to pay an additional $396 bill that showed up in the mail after an ASCAP representative visited his tavern and restaurant on Lake Pewaukee. “It’s just totally ludicrous what they do to us.”

Wiganowsky, who paid ASCAP $242 several years ago but refused to make any subsequent payments, said: “It’s just another way they’re trying to extort the small businessman.”

Bob Goldman of the Wisconsin Restaurant Association said his organization had no objection to fees being charged for live music but said businesses that use a TV or radio for background music should not be charged fees when the radio and TV stations already are paying fees to play the music.

Restaurateurs who have not paid the fees “certainly worry about it,” Goldman said. “The ones who are licensed are incensed that they’re having to pay the $500 or $600 a year for something they think they should not have to pay anything for.”

Piped-in music such as Muzak is paid for by businesses and is not at issue in the legislation.

Sensenbrenner’s bill is being backed by business groups such as the National Restaurant Association, the American Dental Association and the Wisconsin Tavern League.

“This is part of an orchestrated, nationwide campaign by the National Restaurant Association and its members to avoid paying for the music that they use,” Thomas said.

Copyright 1995

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