Music Licensing for Taprooms

Aside from the tasty brews which make any great taproom or brewery stand out, is the atmosphere in which you enjoy your specially crafted beverage. Whether the music is a focal point, or if it’s faded into the background, the music in which an establishment decides to play for its patrons is paramount to the atmosphere it provides. The music provided for that atmosphere is not without cost though; a cost which tends to be over-demanding and opaque due to the lack of information available when obtaining music licenses. However, recent legislative developments have been directed at creating a more user-friendly digital database for historical and current copyright ownership and licensing information.

Public Performance is a Right

Under copyright and intellectual property laws, music is categorically protected from infringement. Particularly, a copyright holder possesses the “Performing Right”, which is the exclusive right to publicly perform a musical composition. The term public performance is broadly defined as the playing of music outside a normal group of friends and family. For example, a microbrewery which may only have the capacity to hold ten people or less is still expected to comply with licensing regulations when playing music for its patrons.

If you play music in your establishment, the current, most-efficient means of obtaining licenses to play someone else’s music is to belong to a performing rights organization (PROs). No PRO is identical, each one contains varying rights and compositions; some PROs you can subscribe to are: American Society of Composers, Global Music Rights, and Broadcast Music, Inc.

Current Issues Surrounding PROs

PROs fees are accompanied with a general license to play the music represented by that PRO, but fee-paying PRO members have a common complaint when it comes to the structures of PROs. They believe that many PROs lack a fundamental transparency regarding the music they license. Indeed, the translucent nature of PROs in their current state is highly problematic for business operators who wish to obtain licenses to play music. If establishments wish to ensure complete compliance, they are left with two unsatisfactory options when it comes to music licensing for their establishment. One, they can subscribe to all PROs, or two, they may choose to stop playing music all together. Currently, there is no single workable database for copyright ownership information; meaning, business operators must buy into every PRO because of the uncertainty surrounding which copyright relates to which PRO.

Establishments who are found in noncompliance, could be leaving themselves open to hefty fines. If found playing music without proper licensure, a person could find themselves subject to actual as well as statutory damages. Not including actual damages sought, statutory damages alone can total up to $150,000 per infringement and actual damages include the cost of licensing the song(s) played without a license. Indeed, many taproom and brewery owners fear that they may buy into a PRO yet still be subject to actual and statutory fines due to inability to search a database for the songs they play.

What Steps have been Taken to Ensure Proper Music Licensure

In 2017, major advancements began in the music regulation arena. The Transparency in Music Licensing and Ownership Act, also known as the Database Bill, was introduced by Congressman Sensenbrenner to simplify the current system. According to Mr. Sensenbrenner when he introduced the Bill in the House of Representatives, the now pending legislation is designed to “establish a database of nondramatic musical works and sound recordings to help entities that wish to publicly perform such works and recordings to identify and compensate the owners of rights.” The Database Bill would enable business owners who often struggle to find proper licensing to ensure that they are legally in compliance with copyright and intellectual property laws. Additionally, this Bill would help rid business owners from the fear of potential lawsuits. After numerous hearings, and several years of examining the current state of American copyright laws, the House Judiciary Committee has determined that reform is essential.

The Transparency in Music Licensing Ownership Act creates a user-friendly platform, where business owners can comply with applicable requirements through a single one-stop-shop database. Business owners will now be able to shop for the PRO which best fits the music demand for their business without feeling compelled to buy into every PRO as a safety precaution. Under the Database Bill, the Register of Copyrights would be required to hire staff as necessary to maintain a database which would provide information relating to musical works and sound recordings. Additionally, the Copyright Office would ensure that this database is available to the public, free of charge, and would be updated regularly on a real-time basis. Lastly, and arguable most importantly, the Bill would limit judicial remedies available for a copyright owner based on the information provided to the database.

Copyright owners would be required to maintain the necessary information on the database in order to claim improper infringement or use of their intellectual property. The key distinction in this piece of legislation is that a business owner is presumed to have acted in good faith if the information for a song played without a license is missing form the database. Whereas, in the current Copyright laws, the business owner would be subject to actual and statutory damages whenever they allowed a song played without license.

In the wake of the 2017 push for more transparency in music licensing, the Broadcast Music, Inc. (BMI) joined efforts with the Brewers Association to help business owners save money while complying with copyright laws. The partnership was announced just one week after the Brewers Association announced that they would back the Transparency in Music Licensing and Ownership Act. The partnership witnessed the difficulties brewers and taprooms were experiencing in their attempts to maintain compliance with Copyright laws; so, they sought out to create a program for its members to get licensed at a 10% discounted rate.

Congressman Sensenbrenner, the BMI, and Brewers Association, among others, see the importance in creating transparency around which copyright ownership information is available for various PROs. With this new-found clarity on the horizon, breweries and taprooms – among other businesses, will be able to shop for the PRO which best fits their business needs, while maintaining compliance and properly compensating artists for their intellectual property. The Transparency in Music Licensing Ownership Act will help business owners while also maintaining the rights of various artists and composers.