Let the Music Play: Proper License Allows You to Entertain Guests and Support Artists (WineAmerica)

To use the music in a commercial enterprise, a license is required.
But who to pay, how to pay – and how much – can be confusing.

By Tara Bon

Any business that plays music for its customers must pay for the privilege of doing so. This includes whether a musician or band is playing live, whether a TV is showing music videos or performances, or simply using a streaming service in public spaces. But who to pay, how to pay – and how much – can be confusing. WineAmerica works to help wineries navigate these troubled waters.

Basically, to use music in any commercial endeavor, a license is required. Licensing protects a songwriter’s intellectual property and ensures that they get paid for their work.

Songwriters and musical artists generally do not license companies directly. Instead, they join one or more performing rights organizations (PROs), which are responsible for collecting revenue on behalf of songwriters and music publishers when a song is released or performed publicly. There are four main PROs: ASCAP, BMI, SESAC and GMReach representing a different catalog of songwriters.

Since 1941, the Department of Justice (DOJ) has forced ASCAP and BMI (which together control over 90% of all musical works) to adhere to consent decrees aimed at prohibiting anti-competitive practices. These include “General Licenses”, which grant full and immediate access to the PRO’s entire catalog upon request and subsequent purchase. These general licenses must be the same for each “similarly located” business. This means, for example, that two wineries of the same size and using the same amount of music cannot be charged differently.

There is also a ban on exclusive licenses and other alternatives to a general license. A performer who owns the rights to their music, for example, must be able to directly license their songs outside of the PRO. In addition, PROs must offer alternatives to the global license. These two requirements ensure that a global license is not the only license available.

Yet challenges remain.

Licensing confusion

As part of its industry advocacy, WineAmerica works to educate lawmakers about the challenges wineries face when licensing music. WA also offers assistance to the wine industry, educating winery owners on how best to license music and how to deal with the challenges that arise. These challenges include negotiating with SESAC and GMR, which are not governed by consent decrees and represent far fewer musical works – but often extract fees equal to or even higher than those charged by ASCAP and BMI.

Fee schedules are further complicated by a lack of transparency. Failure of the PROs to provide access to accurate and reliable data – in particular, which PROs represent which songwriters –has been a long-standing problem in the music industry. Recently, ASCAP and BMI have come together to build Songview, a database including their impressive catalogs. Unfortunately, without the participation of all PROs, Songview remains incomplete. Without a clear database of licensing options and requirements, companies often have to guess what licenses they need and what music is covered.

Despite the requirement that PROs offer meaningful alternatives, in practice they often offer one-size-fits-all licenses. Companies are denied the ability to pay based on actual daily usage and are instead forced to purchase “take it or leave it” licenses that cover more substantial music usage.

Wineries understand the importance of copyright law and want creative artists to get their fair share. This desire is undermined when small businesses experience abusive tactics from PRO representatives seeking to collect licenses. These include disruptive and coercive behavior, harassment and unwarranted royalty demands. In recent years, several states have adopted codes of conduct to regulate how PROs can interact with licensees. Yet PROs find ways to rip off music consumers and licensees.

Several years ago, the Second Circuit Court approved “Fractional Licensing”, which allows a PRO not to offer the full use of a song, but only the “fraction” of the work they control. This means that if a song has three different songwriters and each songwriter is represented by a different PRO, then each PRO only licenses their fraction of the song. This arrangement forces companies to obtain multiple licenses for a single song or face legal damages threatening the company for copyright infringement.

work for clarity

WineAmerica works with the MIC Coalition in Washington, DC, to address these persistent issues. The MIC Coalition (pronounced “mike”, as in “microphone”) is made up of businesses and associations that provide music to millions of local retailers, stores, hotels, restaurants, bars, breweries, taverns and venues. live events across the country, as well as on the national airwaves and on the Internet. Members of the MIC Coalition are committed to working with policy makers to address challenges and ensure that future licensing of public performing rights in musical works continues to promote vigorous competition and benefits all interested parties.

To learn more about how to obtain a legal license for music, visit wineamerica.org/music.

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Tara Good

Tara Good is Vice President of Development at WineAmerica (WA), the only national wine industry association in the United States. WA is a 500-member strong organization that encourages the growth and development of American wineries and viticulture through the advancement and advocacy of healthy public policy. Membership is encouraged to support the important work of WA, which benefits all American wineries. Go to https://wineamerica.org/ for more information.

Elisha A. Tilghman