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Are Royalty Fees Forcing Venues To Close?

Posted by on November 30, 2009

1671_cbgbThat seems to be what an article from Web site zeropaid claims*. The site is up in arms about the three music licensing companies, BMI, ASCAP and SESAC, charging fees to nightclubs, bars and venues for live music. It states that instead of having to pay the fees, the venues are shutting down instead.

Individually the licenses are usually no more than $650 p/yr, but when combined with payments to the other two the amount grows untenable for many, especially if they’re also required to pay royalties for music played on a jukebox or radio.

So what has happened is that many are choosing to shutter live music altogether, by some accounts as many as 50% in the St Cloud, Minnesota area alone.

The main sticking point for the author of the article is that the fees clubs have to pay are for just in case an artist plays a copywritten song. But any club that has a jukebox is paying the three fees as well. And the scientific claim of 50% of the live venues closing in St. Cloud comes from a performer in a cover band, and doesn’t cite licensing fees as a reason for them closing. Another point claims that the royalty collection groups mainly collect from larger acts since they’re easier to track. That might be true, but works the same way that Roadrunner does. If signing a Nickelback can give them the finances to keep putting out Soulfly records, than everyone wins. And if a song is getting played, whether it’s live or on a jukebox, the artist deserves to be paid, especially in a time of declining CD saels.

It would be interesting to hear from a club owner as to how they feel about having to pay licensing fees. And also interesting to hear how much the penalty for copyright infringement is for ignoring the three groups.

* CBGB closed for a bunch of other reasons. SESAC, BMI and ASCAP didn’t play into those, but when you think ‘live music venue shut down,’ it’s the first that comes to mind. And Google image search.

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