WRAL Investigates

Listen up: Restaurants pay high price to play copyrighted music

Posted August 11, 2011
Updated August 16, 2011

WRAL Investigates

— Raleigh pizzeria owner Robert Royster says he pays thousands of dollars each year to play copyrighted music for his customers. If restaurants and clubs don’t buy licenses, they can end up like another Raleigh eatery, in court facing huge fines.

“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 Ruckus Pizza on Avent Ferry Road.

Royster says he bought three music licenses to play popular copyrighted songs in his restaurant.

Fosters American Grille, which recently closed in Raleigh’s Cameron Village, has been ordered to pay $30,450 for illegally playing four songs. The federal judge also ordered the restaurant’s owners to pay about $10,700 in attorneys’ fees.

Broadcast Music Incorporated sued Fosters and claimed in court documents that it called the restaurant 56 times and mailed 29 letters. BMI says Fosters ignored its requests to get a license to play music.

“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 represents about 475,000 songwriters, composers and music publishers. It collects license fees from businesses that use music, which it then distributes as royalties to the musical creators and copyright owners it represents. BMI says its current licensing fee is $6,060 per year.

'Music spies' catching copyright infringement 'Music spies' catching copyright infringement

Licensing companies, such as BMI, hire people to go into bars, restaurants and clubs and record the music that is played or performed. That’s what happened at Fosters, according to a court document, which says the restaurant played songs by Michael Jackson, R. Kelly and a song called Aeroplane, by several artists.

Fosters’ owners, John Powers and Ralph Nelson, declined WRAL’s request for comment. However, Powers told copyright attorney Rick Matthews that the lawsuit did not prompt the restaurant’s closing, according to Matthews.

According to court documents, Foster's has filed suit against Harris Teeter for sewer and water issues. The restaurant closed once before for that reason. That case went to arbitration and the outcome is sealed.

While the songs may not be the reason for Foster's closing, similar copyright lawsuits have been known to shut down restaurants.

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

He handled a similar case for Chapel Hill bar, The Library, which eventually settled for an undisclosed amount. The restaurant remained open.

When asked if he thinks owners understand how serious copyrighted music infringement is, Matthews says, “They do after they talk to me.”

While BMI says lawsuits are rare, the company has sued Alley Cat and Andrew Blair's, both in Charlotte, Sharpshooters Sports Bar in Jacksonville, Forty Rod Roadhouse in Mint Hill, White Owl Tavern in Mooresville and The Diamond Club in New Bern. WRAL News found a total of 39 suits filed across the country this year.

Royster said he doesn't take chances with his pizzeria.

“It’s part of doing business, like food costs or rent,” he said.

Copyright infringement not only pertains to music through a stereo system. If a restaurant or bar has a live band, the restaurant can be fined if the musician plays unlicensed material.

The three big music license companies are BMI, American Society of Composers, Authors and Publishers, and Society of European Stage Authors & Composers.

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  • YESSIRRRRR Aug 16, 12:31 p.m.

    http://www.riaa.com/physicalpiracy.php?content_selector=piracy_online_the_law

    This provides detailed information.

  • Dark_Horse Aug 15, 12:52 p.m.

    "I guess Dark Horse doesn't know about acoustic designs. It can be accomplished."- ssdavisnc51

    Yes it can, and so can actually talking to the person you came to the restaurant with...But your suggestion is for someone to redesign their entire restaurant just so that you can listen to your favorite Sonny and Cher song at your table?! Yeah, that makes WAY more business sense....

  • ameansteak Aug 12, 5:46 p.m.

    I am a restaurant owner and we do have live bands, I agree that the artist that wrote the music should get paid for there work, but i have heard from a lot of people in the music business that BMI and ASCAP pays out very little or nothing to them. And how do they know who to send the money to. If the band i hired plays a song, how do they know to send money to that writer, they dont I have a ascap and a bmi licence. it cost me $1,800 for one and $2,000 a year for the other, plus i have to hire the band for between $1,000 to $3,000 a show,then advertisement Plus provide the place to have it and all the cost with that. Who's making the money? Its not me.i loose or break even on bands. They demand way to much for there licences.Plus there very bullish on the phone. There using laws to extort money from us. Wral didnt show both sides. There is a lot more to this.

  • mmtlash Aug 12, 2:26 p.m.

    can't they just turn on the radio and play that for free? like turn it to 93.9 or 101.5 or something and turn the volume low lol

  • Mr. Furious Aug 12, 12:41 p.m.

    jncna2 - Actually, if a business wants to use satellite radio or a similar paid service, they have to pay for a business subscription, which takes care of the royalties and licensing fees. That's not the case for terrestrial radio, though, thanks to the NAB's lobbying.

  • jncna2 Aug 12, 11:51 a.m.

    This law is crazy! If the restarant is playing the radio or a paid service such as satellite radio what more do they need? The radio os free!!

  • davidgnews Aug 12, 11:50 a.m.

    "In addition, saying that you can't play the music that you bought to other people is absurd."

    No one is telling individuals that, only restaurants.

    The same thing would happen if they tried to rent a Netflix movie and show it to their patrons. This is counted as 'public performance' when you have a random crowd of people, as it's not like playing your CD to a living room full of your friends.

    There are a lot of restaurants that want to be 'clubs' as well, and too many do a poor job of it. This is icing on the cake in that regard, since it covers bands playing there as well.

  • jrtlover Aug 12, 11:32 a.m.

    I understand the law but don't agree with it. What is the difference in buying a painting and hanging it in your place of business to enhance the atmosphere and buying a CD and playing it to enhance the atmosphere?

  • dcatz Aug 12, 11:21 a.m.

    You can't violate a copyright that isn't even legally valid. Please reread the constitution.

    In addition, saying that you can't play the music that you bought to other people is absurd. It's like trying to charge royalties to an art museum for exhibiting paintings because looking at the painting creates a copy of it in people's heads.

  • drjones74 Aug 12, 11:14 a.m.

    So I imagine that not every artist uses one of these companies to go around collecting money for them? Maybe its via the record label? If so, simple solution. Just play stuff that is not using one of these firms. I bet hardly anything on my ipod fall under one of these guys clientele. Only big name mass marketed cr%p. In no time, the artists will come back to you begging for you to play there stuff, and the license companies will be out of business.

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