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Fosters American Grille was charged $30,450 for playing four copyrighted songs without licenses  (Source:
Restaurant owners must pay licensing fees for copyrighted music played via stereo systems and even live bands

The recording industry can be very aggressive with matters such as music piracy and licensing rights. For instance, the Recording Industry Association of America (RIAA) spent $64 million between 2006 and 2008 to win $1.4 million from pirates, and just this year, the RIAA won $105 million from Limewire, a free peer-to-peer file sharing program. Record labels also flipped out when cloud-based music services were released such as Amazon's Cloud Drive and Google Music.

Now, licensing companies are targeting restaurants. Just like food costs and rent, restaurants must pay thousands of dollars a year to play copyrighted music in their establishments as well. If they don't, a huge bill could find its way to their doorstep, and the rules do not strictly pertain to music played through a stereo; it also applies to bands playing live. If a band covers an unlicensed song, the restaurant could be fined.

Recently, Broadcast Music Incorporated (BMI) sued a Raleigh, North Carolina restaurant called Fosters American Grille to the tune of $30,450 for playing four copyrighted songs without licenses according to WRAL News. A federal judge also ordered that the restaurant pay $10,700 in attorneys' fees. 

"We've been attempting to resolve this for two years now," said Robbin Ahrold, BMI's vice president of corporate communications and marketing. "It is our obligation when we sign an agreement with these songwriters to be diligent and do what we can do to collect their royalties."

BMI collects license fees from businesses that play copyrighted music, and delivers the royalties to artists and copyright owners. Currently, BMI licensing fees are $6,060 per year, and it sends employees into local bars to see what music is playing inside to make sure the establishment is complying with these fees. 

That is how Fosters' owners, John Powers and Ralph Nelson, were caught. Their restaurant had played Michael Jackson and R. Kelly songs as well as a song called "Aeroplane" illegally when the BMI employees made their way into Fosters. The restaurant is now closed, but according to copyright attorney Rick Matthews, Powers said the music lawsuit is not the reason Fosters closed. Apparently there were sewer and water issues in the building, and that was the reason for closing. But a $30,000+ music licensing fee probably didn't help either.

"Oh, it will close a business, you know, having a bill of that magnitude immediately," said Matthews. 

On the other hand, some restaurant owners feel that it is best to pay up to avoid such legal problems in the future. "It's very important to us to have the right music because of the atmosphere, and there are expenses that go along with that," said Royster who owns a Ruckus Pizza restaurant in Raleigh. 

Other North Carolina bars/restaurants that BMI has sued includes Alley Cat, Andrew Blair's, Sharpshooters Sports Bar, Forty Rod Roadhouse and White Owl. According to 
WRAL News, there have been a total of 38 lawsuits across the country this year alone.

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RE: Piracy
By imaheadcase on 8/12/2011 11:20:19 AM , Rating: 3
The whole idea of royalties is messed up and needs scrapped (just like patent system) plain and simple.

The "laws" in place do not play well with consumers currently. What are they going to do now sue the people outside of concerts who can hear the music inside?

The sheer stupidly of MPAA/RIAA/BMI etc is what drives costs up, in turn drives people to pirate such material ( or you could argue makes stupid material).

I could go on and on about the stupid things they do, but its been said over and over on the internet. Point is Zune pass is not the fix for anything. People pay monthly fees for so much stuff now, why would they consider paying another for something they can get with other packages currently? HSI you can listen to songs online free. Most phones you can stream free to.

Face it, people this generation don't want to pay even 99cents to download a song from some band that was around when dad was young. Generation gaps are quickly changing the moral compass of how to purchase songs and for what reasons.

RE: Piracy
By fic2 on 8/12/2011 12:40:14 PM , Rating: 2
I remember a suite here in Colorado (Pueblo I think) where this same type of thing was brought against a garage because a mechanic had a radio and the other mechanics could hear it.

That is messed up.

Don't know what happened to it.

RE: Piracy
By Solandri on 8/12/2011 1:36:11 PM , Rating: 4
Yes, amazingly enough, that is considered a public performance, even though the radio station has already paid the licensing fees for public broadcast. In some places it's a bit more nuanced - if the garage plays the radio they have to license it, but if an employee brings his own radio and turns it on without the garage owner knowing then it's allowed.

The RIAA's wet dream is a device implanted on your ears which makes you to pay a license fee every time you hear a copyrighted song.

RE: Piracy
By sprockkets on 8/12/2011 3:20:16 PM , Rating: 2
It was his own music collection, not the radio. They were warned before they were fined. While I can understand the stupidity of the law, I cannot condone what he did either after being warned.

Most restaurants just use sat radio (not XM or anything) and that's licensed. But if they play their own, that's against the law. How my local gym gets away with it, I don't know or care, cause it really is stupid.

RE: Piracy
By sygreenblum on 8/12/2011 8:23:47 PM , Rating: 3

"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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