Category: Businesses/Venues

25 Apr 2018

VNUE Acquires Soundstr

VNUE, Inc. Closes Deal To Acquire Soundstr

Deal Accelerates Company’s Push Into Creating Fair, Transparent Public Performance Licensing For Both Venues And Bands

NEWS PROVIDED BY

VNUE, Inc. 

Apr 25, 2018, 09:00 ET

 

NEW YORKApril 25, 2018 /PRNewswire/ — VNUE, Inc. (OTCQB: VNUE), the global leader in recording live events and releasing experiential content to fans, has officially closed its deal to acquire Soundstr, a technology that aims to help businesses pay fairer music license fees based on actual music usage.

The merger of VNUE’s patent-pending MiC™ (Music Identification Center) system and Soundstr’s own patent-pending music identification technology and hardware aims to fix the current performing rights system. Currently, venues and other businesses are somewhat discouraged from playing music due to high blanket license fees charged by the Performing Rights Organizations (PROs), in which the PROs have no idea what’s actually being played – meaning that in many cases, the correct rights holders are not properly compensated.

Instead of paying these high blanket royalty rates, music licensees utilizing the Soundstr/MiC technology would only pay for music played in their establishments, and the appropriate rights holders would then be properly and transparently compensated. VNUE will also leverage the licensing infrastructure around its “instant live” recording technology to streamline the process for these types of rights clearances.

“While the introduction of the Music Modernization Act is very encouraging in some areas of licensing reform, it does not begin to address the problems of General Licensing, and since it’s another blanket licensing system, it could merely continue to perpetuate the inequities we see in performance licensing into mechanicals. With Soundstr, we have an incredible opportunity to fix this system that’s been broken for more than 50 years, and there’s a potential for $3 billionor more in royalties for general licensing that could be more fairly allocated to artists and songwriters,” said VNUE CEO Zach Bair. “Since we announced our intent to acquire Soundstr in February, it was exciting to see Spotify (SPOT) follow our lead into music rights with their acquisition of Loudr. It is very clear that this is an important move for the future.”

Soundstr was founded by Eron Bucciarelli-Tieger (previously of platinum-selling rock band Hawthorne Heights).

“Our goal with Soundstr is to make real-world music use as transparent as possible so songwriters can receive what they are properly due, while helping licensees pay the fees that are aligned with their music use,” said Bucciarelli-Tieger. “VNUE is the perfect partner to help Soundstr move forward with those goals, and we are excited to be pushing forward.”

For more information on VNUE, please visit http://www.vnue.com/.

About VNUE, Inc.  (www.vnue.com)
VNUE, Inc., (OTC: VNUE) is dedicated to further monetizing the live music experience for artists, labels, writers, and publishers, with products such as its set.fm platform, exclusive license partner and “instant live” pioneer DiscLive, and Soundstr, which helps businesses pay fairer music license fees based on actual music usage. The veteran entrepreneurs, artists and songwriters behind VNUE are passionate about the future of their industry and ensuring that rights holders’ value is not lost amid always-changing technology. VNUE’s team has produced live content and created experiential products for over 15 years for artists and companies including Father John Misty, The Pixies, Blondie, EMI, Capitol Records, and more.

SOURCE VNUE, Inc.

Related Links

http://www.vnue.com

01 Dec 2016

Soundstr Raises $1.1M Seed Round

Music Tech Startup Soundstr Closes $1.1M in Seed Financing

Soundstr’s New Music Identification Technology to Benefit Both Venue Owners & Songwriters

(Cincinnati OH – November 29, 2016)

Soundstr, a music technology startup aiming to bring fairness to real-world music usage, has closed a $1.1 million round of seed financing.  CincyTech led the round with participation from entertainment data and technology company Gracenote, Accelerant and angel investors.

Soundstr’s patent-pending technology offers tracking data to the manner in which venues and businesses pay for the use of music, and songwriters receive royalties.  Music is protected by copyright law, and most businesses and venues that play music are required to pay for a license.  Under the established model, many businesses pay performing rights organizations (PROs) for catalogues of music, even if they use only a fraction.   Soundstr’s technology connects to a venue’s audio system, uses Gracenote’s best-in-class Automatic Content Recognition (ACR) to identify every song played, and creates a record of actual music usage.

“Soundstr’s data can lead to more efficient music licenses,” said Eron Bucciarelli-Tieger, CEO of Soundstr.  “Paying for actual music usage could lower license fees a business pays to some Performing Rights Organizations, leading to more businesses paying for licenses. Both scenarios lead to more songwriters receiving compensation for use of their music, which is at the core of our mission.”

Hundreds of thousands of businesses are subject to the license requirement but some ignore it at the risk of lawsuits and costly fines.

“Disruption is an overused term, but in this case, it truly fits.  We cannot imagine many areas more ready for disruption than this,” said Doug Groh, director at CincyTech.  “We saw that the current methods of determining music licensing fees and royalty payments were both grossly unfair and highly inefficient.  Eron showed a deep understanding of all of the players involved: artists, venues, music publishers, and fans— and their motivations.”

Bucciarelli-Tieger’s knowledge stems from years in the music industry, as a founding member of the platinum-selling band Hawthorne Heights.  He founded Soundstr to help more accurately distribute royalties to songwriters whose music is played in establishments.

Soundstr is currently conducting pilots in several music venues and also with the Canadian Society of Composers, Authors and Music Publishers (SOCAN).

“SOCAN is investing significant resources towards a new world of music consumption and rights management. The identification of the music used in real world businesses, and the related data is crucial to our success,” said Jeff King, COO of SOCAN.  “In our pilot tests, Soundstr’s technology is showing promise and potential.  Between the ease of use and accuracy, we see tremendous opportunity to bring more transparency and clarity to the industry.”

Soundstr is taking pre-orders for an January 2017 launch. Sign-up at the following links:

Soundstr Raises $1.1M Seed Round Soundstr Raises $1.1M Seed Round

Inquiries: info@soundstr.com

15 Nov 2016
5 Things to Know Before Renewing Your Music Licenses

5 Things to Know Before Renewing Your Music Licenses

With the New Year just around the corner, it’s likely time to renew your music licensing agreements. But this industry is under some major changes that could impact all businesses.

In June of 2016, the Department of Justice proposed changes to the Consent Decrees. These agreements govern how ASCAP and BMI, the two biggest US rights organizations, operate. (SESAC and GMR are not bound by these agreements. All four companies are known as Performing Rights Organizations, or “PROs”.) These changes would be the biggest update to the music licensing industry in 75 years. (Note: these changes and this post only relate to US-based PROs.)

Music licensing is a dense topic. Some businesses attempt to avoid paying license fees. But the threat of expensive fines is all too real. New technology is helping businesses negotiate fairer fees and more songwriters get paid. It’s time to take a second look at this industry.

 

1. Current Fee Structures (Bad for Businesses)

Before we jump into proposed changes, it’s important to know what you are already paying for. PROs collect money from music users so they can broadcast music and host performers. Real-world businesses, from concert venues to retail shops, are a part of the “general licensing” category. General licenses are “blanket licenses” which allow real-world music users to play any music within a PRO’s catalog (20 million+ songs). These licenses are determined based on capacity and how the music is being consumed (background music, interactive – band/DJ). Each PRO licenses different songs (although there is some overlap). Each PRO also has a different size catalog. The one thing license fees do not take into account is how much music your business plays from each catalog. It doesn’t make much sense to pay the same amount of money for each license when your business may not use as much music from one or more PRO.  

With music tracking technology, a real-world business can now obtain transparency on their music use and negotiate fees based on actual music usage in their business. This is similar to how many households are cutting the cord with cable companies and only paying for the services and movies they want to watch. These blanket licenses are outdated and inefficient.

 

2. Current Royalty Structures (Bad for Songwriters)

What’s even worse about blanket licenses is who collects royalties from your fees. In the absence of data from real-world music use, the PROs use radio as the main proxy to distribute royalties. This means that if a songwriter performs or is broadcast in your business and is not on the radio, they likely do not earn money. Even worse, your fees are likely going to the big names on commercial radio. We at Soundstr did a case study to challenge this proxy. We sampled 3,000 songs in 12 businesses over 2 weeks. The result was that only 19% of songs played in businesses were also on commercial radio. That means roughly 81% of songwriters would not receive royalties from the use of their music. This is not fair.

 

3. Major Changes (More Mouths to Feed)

So now that you have some back story, let’s move onto changes. The biggest proposed change (actually interpretation of the Consent Decree) is the topic of “No Partial Withdraw.” Currently, music publishers use the PROs to issue public performance rights on behalf of their songwriters to all licensing categories (Radio, TV, Digital & General Licensing). Late last year, all three major publishers (Universal Music Group, Sony/ATV and Warner/Chappell), as well as some independent publishers, signed direct public performance licensing deals with Spotify, Pandora and other digital services. By cutting out the middlemen (PROs), these publishers make more money for their songwriters off direct deals. But, the Department of Justice is pushing to prevent cherry picking these direct deals. “No Partial Withdraw” means that the publishers either have to use the PROs for all four categories or none at all. If the publishers decide to go the “All-in” route, you will still only pay the four PROs (ASCAP, BMI, SESAC and GMR). If they choose the “All-out” option, your music licensing fees will change drastically. If one of the major publishers withdraw from the PROs, you will have another music license to obtain (ASCAP, BMI, SESAC and GMR + Sony, for example). If the tens of thousands of publishers withdraw, you will have many new licenses to pay (ASCAP, BMI, SESAC and GMR + Sony, Universal, Warner Chappell, Downtown, Kobalt, & thousands more). The new system could be complex and transparency around music usage would be essential.

 

4. Technology = Fairer Business Fees & More Songwriter Royalties

Licensing accounts for a large percentage of the entire annual music industry revenue. In fact, in 2014 the performing rights sector was ~31.5% of the size of the entire recorded music industry. (Note: performing rights are not calculated as a part of the recorded music industry.) Technology is looking to disrupt this sector, offering solutions for both businesses and songwriters. We at Soundstr also have some unique solutions rolling out this year. Using our services, businesses can now identify both recorded and live music usage. Having this data would allow a business to negotiate fairer license fees based on pro-rated music usage within their establishment. Either would eliminate overpaying for music or paying for music that was not used. Our mission at Soundstr is to help songwriters earn royalties they deserve for commercial use of their music. By identifying the music used in a business, the PROs can ditch the radio proxy altogether. The 81% of songwriters who were not played on commercial radio would receive compensation for their work. Fairer fees and more royalties sounds like a win-win!

5. The Future of Music Licensing (Better for Everyone!)

The basis of the performing rights industry is simple: when you do a job, you should receive compensation. This is the reason the performing rights industry exists in the first place. In 1847, French composer Ernest Bourget heard one of his works performed in a Parisian cafe, but was not compensated for his work. The lawsuit that followed led to the formation of SACEM, the world’s first PRO. The current system, unfortunately, is not that simple. But the future offers a bright outlook. With transparency around music usage data, new industry standards can be set. Any songwriter can receive compensation for commercial use of their music. Businesses will pay transparent fees based on their actual music use. Currently unlicensed businesses will now be able to afford licenses, pumping more money into the system. The current PRO model will need to be flexible, but the outcome will be a much more sustainable industry.

 

There are a lot of things business owners need to know when it comes to music licensing. This industry is in the midst of some big changes. Staying informed and knowing your options can make a big difference in your fee structure. Why pay for music you aren’t using? And don’t you want to know that your fees are making their way back to the correct songwriters? It’s easy to see the value that music provides to your business. But what about the value that business owners like you provide to the music industry? Technology may finally level the playing field.

 

Click below to learn more about how your business can use Soundstr to identify music usage and negotiate a fairer license. #MusicTransparency

https://www.soundstr.com/renewing-music-licenses

 

 

 

 

 

 

 

 

 

Written by: Brian Penick

Copyediting: Eron Bucciarelli-Tieger, Claire Muenchen

Artwork: Lauren Osinksi

Image: Paul Green Photography

 

13 Jul 2016
5 Things Songwriters Need to Know About the Consent Decree

5 Things Songwriters Need to Know About the Consent Decree

What is the Consent Decree, and why are people talking (and so upset!) about it?

While the music industry can seem glamorous, it does have its “unsexy” parts just like any other business sector. For songwriters, one of the least discussed (yet most important topics) is music licensing. But major changes to the consent decree – the federal agreement that governs how ASCAP and BMI operate – is bringing this topic to the surface.

The truth is, these changes could be the biggest in the music industry in 75 years and greatly impact your career.

So while this might seem like a complex topic now, we’re here to break it down for you. First off, if you are not familiar with Performing Rights Organizations (ASCAP, BMI, SESAC and GMR, “PROs”), read this now. If you are familiar with the PROs and what they do, keep reading. The Consent Decree decisions will impact songwriters, licensors and more. Pretty much everyone in our industry, to a certain degree.

 

1. Consent Decree History

ASCAP and BMI, both of who are non-profit companies, (voluntarily) entered into Consent Decrees with the Department of Justice in 1941. The goal of the agreements was to prevent these two companies from acting monopolistic and regulate how they operate. SESAC and GMR, which are for-profit, are not bound by this agreement. (For a full history of the PROs, click here.) The Department of Justice reviews (and sometimes amends) the Consent Decree every few years to adapt to a changing industry and technology. The proposed updates would be one of the biggest changes to the consent decrees since it was first filed over 75 years ago. (The last changes to the consent decrees were in 1994 for BMI and 2001 for ASCAP.)

 

2. Decision #1: No Partial Withdraw

There are two major decisions proposed by the Department of Justice for the Consent Decree. The first is no partial withdraw. This means that publishers either have to be “all-in” or “all-out” with PROs. Music publishers, with the assistance of the PROs have been asking the DOJ to update the Consent Decrees to allow for partial withdraw. Publishers want the ability to do direct license deals with music licensors for performing rights. In this case, they want to do direct license deals with Digital Services Providers (DSPs) such as Spotify, Pandora, etc. On December 18, 2013, a federal judge ruled that this was not allowed in a case with Pandora and BMI. (A different judge had a similar ruling with Pandora and ASCAP on September 17, 2013.) Yet, shortly thereafter, the publishers went direct to the (digital) source to negotiate better rates, cutting out the PROs as the middleman. This left the PROs to collect on behalf of radio, TV and broadcast/live performances – not digital. The DOJ chose not to update the Consent Decrees to allow for partial withdraw. This means publishers either have to use the PROs to collect on behalf of all mediums, including digital or none at all. If publishers want better rates with Spotify and Pandora, they will also need direct deals in all other mediums. This includes every radio station, TV network, retail store, and live music venue. Publishers would have more work on the admin/collection side, but it might lead to a higher payout for them and their associated songwriters.

 

3. Decision #2: 100% Licensing

The second major decision is called, “100% licensing.” This gives a songwriter with any ownership on a song, even as little as 1%, the right to license the entire song on behalf of all other songwriters. Further, that same song can only be licensed once to a given music licensor. Anyone from the lead songwriter down to the producer that gets a few songwriting credits could license the song. Considering that many co-writers do not share the same PRO, this could lead to several messy scenarios. This is a stark departure from the “fractional” licensing model that the industry currently uses. Fractional licensing means PROs only license their share of a song. In a fractional licensing world, the songwriter (or PRO) with 1% ownership is only able to license their portion. In a 100% Licensing world, when ASCAP licenses a music venue, but only controls 1% of a song, that venue no longer needs to also obtain a license from BMI for that same song. ASCAP must license the full 100% of the song and account back to BMI.

 

4. Short Term Impact

The immediate responses to these proposed changes have not been positive. The CEOs of both ASCAP and BMI have responded, stating their “disappointment” in the DoJ. Other music industry execs have shared this sentiment. The consensus around the short-term impact focuses on the negativity of these rulings. With rate shopping, 100% licensing could devalue the price of music. Licensors will likely be on the hunt for the lowest rate, which could drive down revenues. No partial withdrawal could lead to publishers opting out of the PRO system. Instead of a business needing four PRO licenses, they may now need those four, plus licenses from each of the many publishers.

 

5. Long Term Implications

There are a few implications to consider from these major changes. For better or worse, 100% licensing could lead to a “fixed rate” for music within our industry. This is a long shot, but a fixed rate could help build value (or further devalue) the price of music depending on your perspective. 100% licensing could also place heavy restrictions on the co-writing market. Songwriters may only be able to work with co-writers within their PRO or publisher’s roster. This could lead to a lack of hit songs or more diversity, depending on where you (subjectively) stand. If you’re not already aware, most pop songs have several co-writers, as showcased by popular memes.

 

The biggest potential change could be from the “No Partial Withdraw” ruling. The most contributions against this ruling have come from the PROs, as they should fear this shift. If the DSPs are willing to offer publishers better rates through direct deals or publishers think they can license these services more efficiently by eliminating PRO services fees, this might lead to the end of the current PRO model. With ASCAP and BMI‘s expenses totaling $260M+ in 2015, this money could flow back into the system. This would require the publishers to have direct deals with all radio, TV, background and live music users. It might sound like a stretch, but consider how it could work. Music users would utilize recognition technology to identify all commercial music. A global marketplace could work as an exchange to license and distribute royalties. One organization offering transparency behind rate structures could solve many problems. Businesses would pay fees based on actual music usage. Songwriters could receive compensation for the commercial use of their music. Transparency would allow the industry to fully “Follow The Dollar.”

 

It might sound like a stretch, and again it’s all speculation for now. So much more is likely to happen in the coming months. The PROs and Publishers must respond to the DOJ by the end of July. Lawsuits will likely ensue. Decisions will be delayed as everyone lawyers up and weighs their options. Extremes like ASCAP and BMI merging may actually be considered, despite antitrust lawsuits. The Consent Decrees may even be done away with. Publishers may withdraw from PROs. No one ultimately knows.

 

Regardless of the final ruling on the Consent Decree, we now live in a world where music data is essential. Data impacts everything from songwriting/publishing splits to PRO registration and real world music usage. More overall transparency will be necessary to follow the dollar and understand the true value of music. Songwriters need to pay close attention to this case, as the outcome could have a great affect on their career.

Songwriters – click below to sign up for FREE music recognition services.

5 Things Songwriters Need to Know About the Consent Decree

06 Jul 2016
5 Futuristic Ways Your Brand Can Sponsor Events

5 FUTURISTIC WAYS YOUR BRAND CAN SPONSOR EVENTS

In today’s digital age, you may have to do more than hang a banner to captivate audiences at an event.

Smartphones and social media are killing our attention spans. In a study conducted by Microsoft between 2000 and 2015, our ability to focus has dropped from 15 seconds down to a pitiful 8 seconds. Eight seconds is one less than that of a goldfish. So your carnival pet might be able to win at a staring contest.

There is a simple equation that needs mentioning. When it comes to conversion rates, engagement > visibility.

Consumers are smart and don’t want a brand selling to them. Visibility and name recognition only go so far. Banners, backdrops and signage aren’t stimulating. Advertising should include a call to action from the consumer, but only if the cause of action is enticing enough for them to want or need.

Creating demand with an offer or experience is the name of the game. But the presentation and effort required plays an important role in the user uptake. A great offer with an uninteresting method of connecting the user with the experience can leave a campaign dead in the water. Technology also replaces yesterday’s human touch through efficiency. No more filling out registrations or sign-up sheets required, which minimizes time and effort.

Below are 5 unique ways to advertise at live music events. Each example is efficient, user-friendly and often drive high levels of engagement.

 

1. Text Campaigns

Short-code text campaigns are great. Texting a unique word to a short number (often 5-6 digits) will return a confirmation code or discount to the user. Text campaigns gained popularity in the late 2000’s on the television show “American Idol.” They have become a familiar tool to consumers of all demographics. For advertisers, this medium collects a list of phone numbers that you can add to auto text campaigns. Having this direct pipeline to the consumer is invaluable as social media evolves and audiences shift to the newest, coolest platform.

 

2. In-Venue Broadcast Ads

Broadcasting advertisements in venues is a new way to drive engagement. Fans hear radio-style ads over the sound system during set changeovers, and before/after concerts. This time is often dedicated to playing house music, so it’s a great time to present an event sponsor. In-venue ads are cheaper than radio or cinema advertising. They also focus on engagement over visibility, which often leads to a higher conversion rate. These ads require a device for playback and verification, but more venues are utilizing this technology.

 

3. Beacon Technology

This is the fine line in the sand where the costs and opportunity increase. Beacon technology, known as Bluetooth Low Energy (BLE), interacts with consumers’ smartphones. If someone has an app on their phone and walks within range of a Beacon, they could receive an automatic push notification. (Note: The phone’s Bluetooth needs to be active and the audience needs to have the app using the Beacon.) In other words, there is no action required by the user to get the notification. Businesses that have apps can easily incorporate beacons into ad campaigns. No worries if your business does not have an app, as you have options. App building software and developers have become cheaper and more accessible in recent years. Advertisers also have the option of using popular third-party apps for beacon-enable campaigns. These include artist, venue, or reward apps, among others. After you have identified your destination app, align with a medium that offers beacon marketing and the rest is easy.

 

4. RFID Chips

RFID (radio frequency identification) has become more popular at events, especially music festivals. Through the use of RFID chips and readers, attendees can have a seamless concert experience. RFID allows for checking in and out of access points, push notifications (via app), and even make purchases. PromoWest Productions just introduced RFID technology the Bunbury Music Festival music festival in Cincinnati in June 2016. This led to several improvements from past festivals. By using RFID over cash/credit, all point-of-sale transactions happened via wristband scan. Attendees could load cards at pre-designated “Top Off” stations or through the festival’s app. Fast-paced lines and meant less time missing performances and happy attendees. With this tech making its way into more spaces like marathons, RFID may become cheaper and more accessible over time.

 

5. Augmented & Virtual Reality

Augmented and virtual reality may sound like the future, but in some cases are already available. These sponsorships and activations need third-party technology for broadcasting and viewing. But there are some cost effective workarounds, like 3D technology. Using a 3D projector, audiences can view imagery broadcast with basic 3D glasses. This can be an inexpensive way to display unique visuals at any live event. On the reverse, there are also scenarios that might cost a pretty penny. If you plan on projecting an image of Tupac, you will pay for everything from equipment to license fees. As more advertisers and marketers enter the space, the supply and demand will make this area less expensive.

 

It’s hard to believe that these advertising methods are already available. A brand’s ability to interact with the consumer is better than ever, and who knows what the future will hold. As with any new technology, brands that adopt early have the opportunity to capitalize and set trends. The only question is, will you be ahead of the curve?

Interested in learning more about how your brand can explore these advertising opportunities? Click below for a FREE consultation.

5 Futuristic Ways Your Brand Can Sponsor Events

24 Jun 2016
5 Secrets About Performing Rights Fees

5 SECRETS ABOUT PERFORMING RIGHTS FEES

If you had the opportunity to save money on performing rights fees for your business, would you take it? How about guaranteeing your payments went to the actual songwriters who deserve them?

It’s time to have a serious talk about the performing rights industry. What can we do to make it a more fair and transparent for businesses and songwriters? Let’s start the conversation that should have begun a long time ago.

Yes, paying performing rights fees is the right and legal thing to do. And yes, that money does go to songwriters. But the basic lack of transparency is the issue. If a business knew exactly what they are paying for and where that money goes, this conversation might not be necessary.

Most venue owners cringe when performing rights organizations (“PROs”) come up in conversation. But companies like ASCAP, BMI, SESAC and Global Music Rights (GMR) play an important role in our industry. They collect money from businesses for music use and distribute royalties to songwriters. Any business should realize the value music plays in their establishment. The focus of the conversation should not be about paying PROs. Instead, we need to talk about the fee structure and royalty distribution process. In other words, how is the money collected and where does it go?

 

1. General Blanket Licenses/Venue Reporting

Starting at the top, it is important to know how performing rights fees are currently structured. Regardless of your fee agreement, which is different for many businesses, you pay for a “general blanket license.” This gives you the ability to play any song within a PRO’s catalog. ASCAP and BMI’s catalogs are each over 10 million songs, with SESAC’s at around 500,000. (Global Music Rights does not disclose this info to the public, but it is smaller than SESAC’s.) Since it is impossible to play millions of songs each year in a business, you are essentially paying for something you do not use.

In the case of large concert promoters, PRO fees are deducted from touring artist ticket sales as a percentage of every ticket sold. Promoters must make deductions for each of the four US PROs, regardless of the PRO affiliation of the music performed or broadcast at a given concert. This means, artists are generally paying for music they aren’t performing.

 

2. Songwriter Royal Distribution

One of the main contentions raised by businesses and venue owners when licensing music is the inability of the PROs to prove the money paid goes back to the songwriters featured. This stems from the basic adage: when you do a job, you should receive compensation. The problem is that the money collected by the PROs does not always make it back to the correct songwriters and publishers. The real reason, regardless of what the PROs publish on the issue, is the lack of identification and verification. The PROs still use radio as their main proxy for determining who receives royalty distributions. Most touring songwriters never receive radio airplay. Despite paying performing rights fees at show settlement, these songwriters do not receive royalties. Based on a recent case study, only 20% of the songs on the radio were also played in a business. This means upwards of 80% of the royalties distributed went to the wrong songwriters. How is this fair?

 

3. Radio & TV – The Other Mediums

It is clear that there are inefficiencies when it comes to performing rights fees for businesses and venues. But what drives the knife in even further is the structure of similar mediums like radio and TV. By federal law, these mediums can obtain a “Per Segment” license, which states they only pay for actual music usage. This is due to both mediums having the ability to track and submit playlist data. Does that seem fair? Well keep reading, because I have a feeling you will like where this is going.  

 

4. Technology is the Answer

It’s clear that the main issue is transparency, especially when comparing different mediums. But what if technology could offer a solution that could level the playing field? Well, we are happy to tell you that time has come. New technology has the ability to identify real world music use, which allows for song identification and verification. This means that a business can now generate a report to show all music performed and broadcast in their establishment. These reports show with which PRO(s) the music used is registered. This offers a business paying a blanket license the ability to negotiate license fees based on actual music use or a promoter to ensure their hosted artists aren’t being over-charged for PRO fees.

 

5. The Future

The performing rights industry is in the midst of serious change. The laws that structure this 100 year old industry are currently under review. This is due to both the ability of recognition technology and lobbyist groups fighting for fairness. There is an overwhelming sense of pressure to modernize the music industry altogether. Transparency would allow for more money to flow through the system. Businesses would have the ability to negotiate fairer (and potentially lower) fees. Songwriters would receive more compensation for their work. The PROs could license more businesses and would have a more positive position in the industry. It’s a win-win-win for those interested in the sustainability in this fractured business. And that’s exactly what we’re hoping for.

Click below for a FREE webinar that shows how your business or venue can start identifying your music use today.

5 Secrets About Performing Rights Fees

20 Jun 2016
5 THINGS TO KNOW: MY BUSINESS GOT A LETTER FROM ASCAP/BMI/SESAC

5 THINGS TO KNOW: MY BUSINESS GOT A LETTER FROM ASCAP/BMI/SESAC

The last thing any business owner wants is another bill.

It seems like the cost of operating a brick and mortar business gets more expensive by the day. But what if you receive an invoice in the mail for something you have been using (without payment) for years? That’s exactly what can happen if you see a letter from a performing rights organization.

Performing rights organizations (“PROs”) collect for the commercial use of music in businesses. A letter from these organizations (ASCAP, BMI, SESAC and Global Music Rights in the USA) might take you by surprise. But there are a few things that you need to know to make sure your business is using music in a legal way that avoids expensive fines. (And by expensive, we mean upwards of $150,000.)

Here are 5 things you need to know about the Performing Rights Industry and its affiliated organizations:

 

1. What PROs charge for is completely legal.

Based on US Law, any time a song (“work”) is performed (broadcast or performed live) in a business, you (“music user”) must pay the creator (“songwriter”) for that right. There are some exemptions, which should be understood. PROs collect fees from businesses and distribute them to the songwriters they represent. This is a complicated process, but we’re here to help simplify and explain.

 

2. This is an old, outdated industry.

The first US PRO (ASCAP) launched in 1914, with competitors SESAC in 1930 and BMI in 1939. (Global Music Rights is the new kid on the block, who launched in 2015). ASCAP and BMI have entered into Consent Decrees with the US Department of Justice. These documents govern and set the standard for collection of performing rights fees by these two groups. These documents are updated every 10 or so years, the last of which came in 2001. (Note: major changes have been proposed on June 30th, 2016 – click HERE to learn more.) All PROs are bound by the last major overhaul to US Copyright Law: the Revised Copyright Act of 1976. These updates help the industry adapt to new standards and technology. But at the end of the day, these changes do not happen often enough, and many businesses are pushing for serious changes and updates.

 

3. PROs are litigious.

Although the PROs are quiet when it comes to their rate structure, they are vocal when venues do not pay their fees. In April 2016, ASCAP sued 10 bars that did not comply. These infractions might not seem like much, but consider each case. ASCAP fined a Cincinnati-bar $90,000 for not paying an annual $5,000 fee. This demand was only made by a single PRO – there are now four in the US. Lawyers are expensive. Fines are more expensive. Paying for a product you use is the right thing to do.

 

4. Balancing the system.

There are movements and efforts to make this a fairer and more transparent industry. Most business owners agree that music is a valued asset to their business. People don’t spend much time in silent bars, coffee shops, restaurants and nightclubs. Music helps drive business. Songwriters should receive compensation for commercial use of their music. Paying PRO fees is the right and legal thing to do. But there needs to be a balanced approach. These fees need to reflect actual music use. Business owners need to know that the money they pay is making its way back to the correct songwriters. A fairer system means more businesses could license music, avoiding fines or lawsuits. More money would flow into the system for songwriters. Transparency surrounding fees is a win-win.

 

5. Technology might be the answer.

As of today, PROs charge businesses and venues a general blanket license fee for music performances. This fee offers the ability to play all music from a PRO’s catalog. This is different from other mediums (radio, television, Internet), which pay only for the music they use. This fee structure, known as a Per Segment License, requires tracking of music use. Until recently, technology could not identify live music performances. With the ability to track music use, businesses can gather the necessary data to potentially negotiate lower fees. On a larger scale, this could lead to Per Segment licenses for all businesses. This could help lower rates for businesses and help songwriters get paid when their works are used.

 

Receiving a warning letter from one of these businesses can be intimidating, and a quick Google search can only add to your fears. But it is important to know what you are paying for. Music helps business, from building customer loyalty to helping sales. While the current system does work in theory, a health balance is necessary. Businesses should only pay for the music they use. Songwriters should receive compensation for the commercial use of their music. More transparency would solve many problems, and technology is here to offer a solution.

Click below for a FREE webinar that discusses how you can start identifying music in your business and potentially lower your performing rights fees. 

5 THINGS TO KNOW: MY BUSINESS GOT A LETTER FROM ASCAP/BMI/SESAC