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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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By JasonMick on 8/12/2011 11:03:11 AM , Rating: 2
The harder the RIAA squeezes the less business they'll get. They can't beat anonymized P2P. It's prohibitively expensive to try to trace.

Are they forget that pirates are typically the biggest legal purchasers of music? They need to STFU and figure out a better business model, or perish.

Piracy is obviously illegal and immoral in many cases, but it's not always as black and white as the RIAA would have you believe. Issues like playing music in public at a bar or burning a backup copy the RIAA claims are illegal, but common sense says otherwise. Likewise, the RIAA claims pirating a track and using your listen to decide whether to buy is illegal, but that's essentially the digital equivalent going over to your friend's house and listening to a cd of theirs and then deciding whether to buy it.

I agree that pirating with zero intention of buying the music, even if you like it, is wrong and hurts musicians. However, consumers have the right to be able to fully preview what they're buying. That's the biggest problem with the current system.

The RIAA's claim that 1 track pirated equals 1 track not bought is nonsensical as often:
a) If the person likes the track they'll buy it legally or..
b) They wouldn't have bought the track legally in the first place as they don't want to spend the money... they would have listened to it from a friend or got it from a friend (a la the "mixtape").

Hopefully services like Zune Pass will eventually lay this debate to rest if they get enough traction. But at this point the enforcement is grossly out of line with reality and common sense.

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

RE: Piracy
By lyeoh on 8/12/2011 12:06:13 PM , Rating: 2
Thing is, in some countries if a restaurant only plays free music[1] it'll probably still have to pay the "protection racket"/MAFIAA or get sued due the laws etc.

[1] there's actually plenty around- not all good of course, but it's a restaurant. Which customer would care as long as the music isn't too loud or crap or inappropriate?

RE: Piracy
By Chadder007 on 8/12/2011 12:39:34 PM , Rating: 2
Does the RIAA staff only consist of Greedy Lawyers?

RE: Piracy
By alphadogg on 8/12/2011 1:12:39 PM , Rating: 5
There are other kinds? ;)

RE: Piracy
By StanO360 on 8/12/2011 1:48:47 PM , Rating: 2
That reminds me of a guy I knew, way back when, he had a computer chock full of illegal Photoshop, Pagemaker, Excel, etc.

Did anyone lose a nickel on that? No, he would never have bought it legally, never used them (probably didn't know how). A true loss is someone that pays for an illegal copy of something.

Going after restaurants? Showboating.

RE: Piracy
By alphadogg on 8/12/11, Rating: -1
RE: Piracy
By jeff834 on 8/12/2011 5:28:33 PM , Rating: 5
I knew a guy once who made an absolutely ridiculous post comparing software piracy to murder. Did anyone miss it when it was rated down? Nope.

RE: Piracy
By alphadogg on 8/16/2011 9:29:10 AM , Rating: 2
I get it. If you don't condone piracy, or at least minimize its socio-political impact, you get downvoted. Point taken.

RE: Piracy
By kmmatney on 8/12/2011 11:13:41 PM , Rating: 3
What a tool. There is no reason to pirate Excel, Photoshop, etc... There are plenty of free alternatives. You can get a 3 computer license for MS Office (Home edition) for $80. I guess it was harder to find laternatives several years ago, but there are options now, and a lot of good software can be found for reasonable prices.

RE: Piracy
By superPC on 8/12/2011 6:51:56 PM , Rating: 3
ways around this exist for personal use. netflix, hulu, BBC iplayer can handle our video needs while spottify and zune pass can handle our music needs. but for an establishment this is much more difficult. an establishment need to have a license and owned the media to playback music or video period. doesn't matter the source, be it CD, or the internet. and i don't think this is wise. RIAA or MPAA should think of a restaurant that plays their media as a free advertisement (since most people that listened to it there can't take it home).

you know what? these days i think most of us are getting fooled by the politician, lawyer, and economist...

RE: Piracy
By inperfectdarkness on 8/12/2011 11:01:46 PM , Rating: 3
proof positive that the situation is out of control. adapt or die. RIAA and MPAA has opted for "die".

RE: Piracy
By gorehound on 8/13/2011 8:02:21 AM , Rating: 1
I play in two bands up in Portland, ME.
Recently this year or it was late last year a club had to pay these assholes $10000 becuase bands will whip off a cover once in a while.So now most or all of the clubs here are being extorted by this asshole NANNY operation.
As far as Restaurants go I would not pay these fuckers a dime.
STOP PAYING BMI !!! You do not need them.Play music from Artists who do not sell out and do not joing the Traitor Organizations like BMI,ASCAP,RIAA
They take your money and you never see a dime as an artist but some will never learn.
This is the same kind of bullshit like the grandmother who was sued in the UK for having a radio in a store.So she took it out and sang to her they came in and sued her anyways.

RE: Piracy
By Reclaimer77 on 8/13/2011 9:15:08 AM , Rating: 1
Well this might be a first, but I 100% agree with everything you said.

RE: Piracy
By lowsidex2 on 8/13/2011 10:20:16 AM , Rating: 2
I better start screening my neighbors and friends before I invite them to my next backyard cookout.
Food- $25
Drinks - $45
Music - $6000

A commercial establishment I can understand but they do take it to include any airing of music the public can hear. In college dorm? Better close your windows and doors. On the lake? Better use headphones.

How about we just socialize music? Screw healthcare, everyone is required to purchase a music license or what ever it is called for $6000 a year or else be exiled to some middle east country that bans music all together.

RE: Piracy
By Lazarus Dark on 8/16/2011 10:43:07 PM , Rating: 2
I'm gunna start taking down license plates of the guys blasting rap while driving down my street and send them to RIAA, as they are obviously public performances.

Its no wonder people go postal, actually its a wonder they dont go postal more. I'd have a lot of trouble not decking a guy if he tried to claim my music playing at work required a license. We need to go down to bmi and riaa headquarters and do some London-style protesting, yknow what I mean?

By Lifted on 8/12/2011 11:20:01 AM , Rating: 4
Now, licensing companies are targeting restaurants.

This is nothing new. In fact, restaurants, bars, discos, clubs, etc., were the original "pirates" and have been targeted for not paying for use well before ARPANET was even thought of.

RE: Now?
By Gio6518 on 8/12/2011 11:32:58 AM , Rating: 5
Maybe the restaurants should sue the record labels for promotional fees

RE: Now?
By ClownPuncher on 8/12/2011 1:29:48 PM , Rating: 2
Free advertising, true.

RE: Now?
By Dr of crap on 8/12/2011 12:21:51 PM , Rating: 2
I had no idea that these places had to pay.
SO if a bar has a live band,
they have to pay the band,
pay the RIAA - or however gets the money,
and then raise the cost of the booze and eats to cover these costs and make enough cash to pay it's bills, the workers, and the left over cash to stay open.

And the loosers of this setup - the bar owner and the people sitting in the bar.

Thanks a lot!!

RE: Now?
By Iaiken on 8/12/2011 12:47:37 PM , Rating: 2
And the loosers of this setup - the bar owner and the people sitting in the bar.

Nope, the loser in this setup is you, the consumer.

RE: Now?
By Solandri on 8/12/2011 1:47:27 PM , Rating: 2
The cost of the license depends on how many people the bar can accommodate, and how frequently the music is played. On a per-customer basis it actually isn't that bad (ranges from a few hundred to a few thousand dollars a year for most bars and restaurants). But it is an extra expense whose legitimacy is questionable if all you're doing is piping in a radio broadcast.

IIRC, there's an extra fee if your bar has live performances. With pre-recorded broadcasts, you just need to pay the RIAA. With live performances, you also need to pay the song composers and lyrics writers (they have their own enforcement arm). Actually, the band performing it is supposed to pay it. But if they don't, the venue also gets fined (they're the ones collecting the money from people who come to listen to the public performance). So most venues just pay a universal cover fee in case one of the bands they hire didn't know/didn't care/refused to pay.

By torpor on 8/12/2011 11:56:39 AM , Rating: 5
Stealing means you take something and deprive someone else of it.

But copying/playing music doesn't take anything from anyone. If you have an mp3, and I make a copy, you still have your copy. You've lost nothing. For instance, if you built yourself a computer, and I built a computer with the exact same parts, what have you lost? Nothing, of course. But if I take your computer, you don't have one anymore.

That's why our laws don't equate copyright infringement to stealing. It's not at all the same.

Our country is hurt by stifling scientific and cultural innovation by preserving these "rights" well beyond any reasonable term. Mickey Mouse is still copyrighted, nearly 100 years after first being introduced. Do you get how ridiculous that is?

And FYI, a typical record deal gets you 3% of profit after every expense the RIAA can think of or manufacture is deducted from the sales. So, on the basis of the above lawsuit, the artist might get $900, assuming the full $30,000 is considered profit (good luck).

By MrTeal on 8/12/2011 12:49:00 PM , Rating: 2
I don't fully agree with your analogy. It disregards that the first party is innovating and using that innovation to generate a profit, while the second party is providing the same service without having the expenses. It would be more accurate if I had come up with some novel way of say connecting the parts together that increases performance and that wasn't previously available in the market and then started assembling and selling computers based on that, and you copied the design for your own rig. Nothing is physically being stolen and it's not theft, but you are depriving me of the use of my innovation as I see fit.

Obviously the RIAA's stance that all piracy equates to lost sales is ridiculous, but this isn't really about that. Restaurants and bars provide music as a service to their customers, and it serves to draw people into the establishment. It's reasonable that they should have to pay a licensing fee for that, in the same way that they'd have to pay a licensing fee to have a public display of a UFC fight.

By Solandri on 8/12/2011 1:56:14 PM , Rating: 2
That pre-supposes that every pirated song is a lost sale. That is far from the case. The vast majority of pirated music does not represent lost sales. Those who can afford it usually just pay for it because it's the right thing to do. Those who can't (e.g. kids, poor people) are usually the ones who pirate it.

It sounds like the restaurant in the article was already in financial trouble. So if they had tried to be legit from the start, they probably would have gone bankrupt even sooner and the RIAA wouldn't have gotten paid.

By torpor on 8/12/2011 5:51:07 PM , Rating: 2
Taking the money would be theft.
Taking the music would not.

You assume I am willing to purchase something which moves freely between two people; that being knowledge. People have always tried to control ideas, and they have always failed.

Did you know the song, "Happy Birthday", is copyrighted?

Next time you're at some small child's party, and everyone starts to sing Happy Birthday as the cake comes around the corner, loudly inform everyone there that they're a bunch of thieves. Do it the same way you would if you saw someone raiding the mom's jewelry box and stuffing the contents into their pockets.

If this action feels natural and correct to you, then by all means, continue thinking what you think.

There's one more thing you don't understand. I'm not trying to have a philosophical discussion with you. I'm explaining the legal reasoning why our laws are as they are, and why things like the DMCA are an offense to that original reasoning.

By Flunk on 8/12/2011 12:17:45 PM , Rating: 2
Even taking that all at face value $30,450 seems like an extreme amount of royalities for 4 songs.

By ipay on 8/12/2011 1:20:10 PM , Rating: 2
I don't really mind having restaurants pay royalties for this, although there needs to be some common sense involved. For example, one grocery store was sued because one of their employees was playing a radio in a back room, and after they removed that the lawsuit continued because she began singing to herself.

However, the penalties are way out of proportion. Why is it that this is penalized more heavily than if i had gone into a store, and robbed a bunch of CDs right off the shelf? That seems like a far worse crime to me.

and the artist's cut of that is?
By mydogfarted on 8/12/2011 10:59:48 AM , Rating: 3
Anyone? Anyone? I'm going with probably not a cent.

RE: and the artist's cut of that is?
By fic2 on 8/12/2011 12:37:41 PM , Rating: 2
I was going to say something like that.

"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."

and not give the artists any of it.

The legal concept
By deathwombat on 8/12/2011 12:38:47 PM , Rating: 2
The legal concept is that playing music in a restaurant represents a performance, and the diners represent an audience. Of course, most people don't go to a restaurant to listen to the background music. You might go specifically to see a live band, but I don't choose a restaurant based on what radio station they play in the background. You often can't hear the music anyway; the music is a form of white noise to drown out the conversations of the other diners.

The courts are supposed to award damages to remedy injury. Anti-piracy laws allow and require them to issue awards that far exceed the damages suffered by the copyright holder in order to serve as a deterrent, but there is still a basic principle that you don't have a case unless you've suffered an injury. People don't go to restaurants to listen to background music, they go to eat food. The music that plays in the background does not deprive the copyright holder of any revenues (if anything, it promotes their music and increases revenues), so without any damages, how can any court award remediation?

RE: The legal concept
By deathwombat on 8/12/2011 12:47:29 PM , Rating: 3
Also, the deterrent portion of the award should be kept by the state. Awarding the copyright holder $25,000 for each $0.99 song stolen allows content creators to earn more money from lawsuits than they from sales, which in turn provides an incentive for them to promote piracy, thus defeating the purpose of the deterrent award.

If the government wants to fine people $25,000 per infraction to deter piracy, that's their prerogative. The copyright holder's award should be equal to their damages (plus their court costs if they sue for them), and the $24,999 deterrent should be kept by the state. The recording industry shouldn't be allowed to profit off of the state's deterrent efforts.

This is nuts
By TechIsGr8 on 8/12/2011 12:36:23 PM , Rating: 2
Can they sue you if you sing one of their recorded songs, too? It used to be that, if you heard a song somewhere that you liked, you'd go buy it. That's the free market, that's marketing and merchandising at its best. This approach by the RIAA is nothing more than a desperate money grab by a group of authoritarian greedy dimwits.

RE: This is nuts
By Solandri on 8/12/2011 1:32:33 PM , Rating: 2
Can they sue you if you sing one of their recorded songs, too?

Yes. This is the reason many restaurants don't use the Happy Birthday song - it's still under copyright and they frequently only have a license for public broadcast of pre-recorded music.

Wait a minute...
By meepstone on 8/14/2011 10:31:12 AM , Rating: 2
So if I own a restaurant. Buy a CD and play the CD in the restaurant I'm violating copyright laws??? If this is the case, what's the point of buying any music if your just gonna get sued anyways.

RE: Wait a minute...
By JKflipflop98 on 8/15/2011 3:57:33 AM , Rating: 2
These a-holes are so finished. I can't wait until all the old and stuffy dinosaurs that run this country finally die. The same dinosaurs that dont understand a single iota of technology, but feel qualified to issue legislation on it.

The RIAA better rape while the raping is good. Gen X is going to kill you.

Multable taxation
By overlandpark4me on 8/15/2011 10:40:37 PM , Rating: 2
So they get a cut when it is sold.
They get a cut when it is played from the radio station.
They want a cut when customers listen to the radio station in an eatery.


Now their model is to let a location play it for a length of time that suits them, then sue for for max dollars.

RE: Multable taxation
By overlandpark4me on 8/15/2011 10:42:19 PM , Rating: 2
and I left out the band pays them to play the music too.

By seamonkey79 on 8/12/2011 2:18:13 PM , Rating: 3
I for one would welcome the silence that would come if all restaurants and bars and stores would simply stop playing music, use the money to buff the floors so they don't look like a thousand children have vomited all over them, and let me shop without hearing some lousy cover of an 80's song that wasn't bad 30 years ago but is made to sound like some dead cat isn't being allowed to die in peace.

How much
By Piiman on 8/12/2011 12:36:31 PM , Rating: 2
I'd like to see just how much they actually give the artist. I'm sure a lot of them feel like BMI is stealing from them.

Creative Commons License
By SniperWulf on 8/12/2011 2:43:45 PM , Rating: 2
Well since businesses are getting sued because of this now, how would it work if they played music that has a Creative Commons License?

By wardww on 8/12/2011 6:36:34 PM , Rating: 2
"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."..............for us

By jnemesh on 8/16/2011 7:33:44 PM , Rating: 2
I think, if I owned a business where I wanted music, I would find tracks that arent licensed by BMI or anyone else...maybe open source classical recordings. Or just pay XM for sat radio and skip the hassles. Personally, I think this behavior by BMI is just one step away from extortion, and if they ever showed up at my doorstep, I might have Guido and Nunzio work over their kneecaps!

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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