WRAL Investigates

Listen up: Restaurants pay high price to play copyrighted music

Posted August 11, 2011 6:00 p.m. EDT
Updated August 16, 2011 8:49 a.m. EDT

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.

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.