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