Music and commerce go together. Restaurants, clubs, bars and even retail shops become more inviting with the ambiance created by music. Root canals would be less romantic without Perry Como and other easy-listening warblers on the headset. And being put on hold just wouldn't be the same infuriating experience without bad Top 40 songs to annoy you.
Yet most merchants don't realize that to employ music, even in offhand ways, requires a license.
In the United States, these licenses are issued either by Broadcast Music Incorporated (BMI) or American Society of Composers, Authors and Publishers (ASCAP). Between them, BMI and ASCAP administer the rights to nearly all of the music written today. Most of the money that BMI and ASCAP collects from license sales goes to songwriters.
There are probably hundreds of businesses out there whose managers either don't know about this requirement or don't care. As violations go, the managers rank them right up there with rolling stops and removing tags from mattresses.
But BMI and ASCAP can make a business regret such indifference.
Four years ago, Rosemary and Don Paasch bought a bar at 10444 East Apache Trail in Mesa. Before they unveiled Don & Rose's, the Paasches paid Maricopa County Health Department $390 for a three-year license. The bar's annual state liquor license costs $150. The Paasches expected these costs.
What they didn't count on were fees to BMI and ASCAP for the right to have a jukebox, and a live band one night per week. The Paasches were astounded to learn that the annual bills for their bar (which has a legal capacity of 80 people) came to $597 for ASCAP and $630 for BMI. Convinced that $1,227 was too steep a price for a business that nets $50,000 per year, the Paasches refused to pay.
To build a case against Don & Rose's, a BMI agent frequented the establishment, ordered drinks and passed the time scribbling titles of songs played by the band and on the jukebox. BMI then sued the Paasches for copyright infringement.
On March 4, 1991, tragedy struck. The Paasches were involved in a head-on car wreck. Don Paasch was killed. Distraught about the death of her husband, Rosemary, who still suffers from injuries sustained in the crash, claims she does not remember being served with a court summons. (She recently found it in a box with other papers.)
But things were progressing. On December 10, 1992, U.S. District Court Judge Paul Rosenblatt rendered a default judgment for $28,343.50 against Don & Rose's. He awarded BMI $1,000 for each of 27 copyright-infringement claims, plus court costs and interest.
Music licensing is a complex and controversial subject. Business owners like Rosemary Paasch say the fees are exorbitant. Songwriters accuse BMI and ASCAP of serving only those whose songs make the charts. In reality, BMI and ASCAP are legalized, nonprofit monopolies that enforce Title XVII of U.S. Copyright Law. BMI and ASCAP view any merchant caught playing their music without a license as a common thief.
BMI and ASCAP administer three types of royalties: mechanical royalties cover CDs, records and cassettes; synchronization royalties concern music used on television and in films; and public-performance rights involve live or recorded music used in clubs, stores and hotels.
According to Steven Blinn, BMI's director of media relations, numerous factors go into determining licensing fees--the square footage of an establishment, the number of stereo or public-address speakers, the maximum occupancy and whether the music is live or recorded.
Each year, Blinn says, the corporation files about 400 copyright-infringement lawsuits like the one against Don & Rose's. BMI rarely loses.
Although they have little more than contempt for musicians--There ain't no musician in this world that's worth $10 an hour cash," says Tom Paasch, Rosemary's son--the Paasches say they support giving songwriters their due. It's the money BMI keeps for itself that galls them.
"This [copyright] law was written for them exclusively," says Tom Paasch, who has stepped in to help manage the bar. "People like us are paying more and more and more. On their schedule, they show you where they're raising their rates. What for? They're a nonprofit organization. They're making a business out of something that was intended to protect an artist."
Blinn says BMI's administrative costs in 1992 were 17 percent of its gross revenues. The rest, he says, went to songwriters. Both BMI and ASCAP have about 150,000 members. There are currently 587 BMI-licensed songwriters in Arizona. The burning question for those artists is how effective BMI and ASCAP are at preventing music piracy.
"We have 100,000 licensees across the U.S.," Blinn says with a sigh. "Compare that to how many businesses use music and draw your own conclusions."
Local singer-songwriter Hans Olson has an unusual perspective on music licensing. A member of ASCAP, Olson also had to buy licenses from both BMI and ASCAP when he owned the Sun Club in Tempe in the mid-Eighties. While Olson has received checks from ASCAP for radio airplay of his songs, he feels that small clubs should get some special consideration.
"My theory is that most of the new, creative music that's being done today is born in little bars," Olson says, adding that he believes major artists who make big money through ASCAP and BMI would rather see small bars exempted than have to discontinue live music.
Part of the dispute between BMI and the Paasches comes down to a matter of style. The Paasches say the BMI representatives who came into the bar to sell them a license were rude. They claim one BMI official told them, "We're gonna come and take your bar." Worst of all, the Paasches feel violated, because the BMI agent who sat in the bar and catalogued the songs being played never identified himself.
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"This is an invasion of privacy," Rosemary says. ". . . . To me, it's Gestapo tactics. If you've got to be so secret, it makes me wonder if you're on the up and up."
Rick Gorel, the BMI licensing agent who gathered the goods on Don & Rose's, says he tried to make the Paasches understand copyright law and why they were violating it.
"She [Rosemary] got upset, because somebody was making her do it," Gorel says of his attempts to get the Paasches to purchase a license. "Then she got an attitude that she could beat it. . . .
"We must have made 20 to 25 phone calls to her. She never returned one of them. I was there three or four times myself. We sent them six or seven pieces of mail. It became clear that her intent was to hope it went away."
So far, the Paasches have not hired a lawyer. They say they've made a fair offer and are in the process of setting up a payment plan with BMI. They've also purchased licenses from both BMI and ASCAP.
"It's unfortunate that the little guy has to pay so much," says Tom Paasch. "All I've got to say to other people is if you think it can't happen to you, it can. And if you think you can fight it, you can't.