A question regarding ASCAP and other similar organizations

[Village Idiot]

When I was getting my pickup installed a few weeks ago I fell into a conversation with a customer there and the banter turned to ASCAP and other places like that, specifically SEESAC (sic). I know what those organizations are and that they exist, but that's really about it.

I found it interesting when he said that he was told, before signing a contract with a place to play a gig at what I assume was a brewery/restaurant, he was told he needed to check with SEESAC (sic) because if he got busted the responsibility would fall on him and it could cost him thousands. I don't know what he meant by "checking with the SEESAC".

Again, I know nothing about this stuff, but doesn't the venue pay an annual fee to those organizations, so both they and the musicians are covered? I've been getting out and playing more and have never heard of this.

[Cornflake]

I don't know, Todd. I've been with BMI for many years. I don't know what it does except send me checks occasionally, but that's enough to make it okay in my book.

[aquaduct]

Nov 26, 2022 20:48:42 GMT -5 Village Idiot said:

When I was getting my pickup installed a few weeks ago I fell into a conversation with a customer there and the banter turned to ASCAP and other places like that, specifically SEESAC (sic). I know what those organizations are and that they exist, but that's really about it.

I found it interesting when he said that he was told, before signing a contract with a place to play a gig at what I assume was a brewery/restaurant, he was told he needed to check with SEESAC (sic) because if he got busted the responsibility would fall on him and it could cost him thousands. I don't know what he meant by "checking with the SEESAC".

Again, I know nothing about this stuff, but doesn't the venue pay and annual fee to those organizations, so both they and the musicians are covered? I've been getting out and playing more and have never heard of this.

A few of us (myself and sidhe at least) had quite a few conversations about this here a decade ago. It had to do with the rights organizations (ASCAP, BMI, and SESAC) were shaking down venues for rights payments for allowing the playing of covers in the venue (the musicians don't need to pay anything for performing the cover- that's the way the system views it anyways). There were also at least rumored to be phone apps that could record songs being played and identify them as covered by copyright (Youtube does this for many songs posted on it identifying the song and copyright holder).

At the hieght of the scramble if I recall, some venues were limiting performers to only originals and some other things. That being said, we were never impacted in any way so I really have no idea what's going on with it now.

[Russell Letson]

I see that Peter beat me to it with some of this, but I'll leave my post as-is.

ASCAP, BMI, and SESAC are PROs--performing rights organizations--that collect license fees from venues that present their clients' music. There are lots of on-line discussions of their virtues and (mostly) vices, and just about any bar or coffee-house proprietor can tell stories about dealing with PRO reps. (I suppose there's a bias in the direction of unhappy stories, because nobody makes a lot of noise about fair and pleasant business dealings.)

But musicians are not on the hook for licensing--only the venue owners. The problems for players start when coffee houses and bars and restaurants decide not to offer music because the fees exceed the revenue music might bring in. Or they don't want the hassle. And if you offer any music, all three PROs can show up with their hands out--even if the venue has an "originals only" policy. There are stories of reps refusing to believe that it was possible--and PROs have been known to send in agents to monitor venues for presentation of material they represent. (For years, the Folk Society had a no-Dylan policy, because his PRO, SESAC, was so aggressive. And the reps refused to give the owner/booker a list of represented artists so he could verify that we were not violating SESAC client rights. Assholes.)

And yes, if a PRO decides that a venue has been offering music without paying license fees, the penalties can be serious, and the PROs can be relentless. The irony is that the fee structures and PRO tactics tend to reduce the number of music venues, and many of the musicians the Folk Society books make bitter jokes about the laughable checks they get. (Lots of dissatisfaction with the distribution formulas--a topic too complicated to get into here.)

[aquaduct]

The other aspect of this that's incredibly annoying is you're playing to (or rather being ignored by) 4 people in a restaurant and Bob freaking Dylan demands his cut.

[Marshall]

I think it'd be hard for the performer to be on the hook. The establishment can say that, but the PRO will go after the venue. The performer will not be named. Then the venue would have to sue the performer. A court battle would then ensue if they could find and attorney that would chase it. Highly unlikely.

[Village Idiot]

Those of you who attended Idiotjam the first few years we spent Friday evenings at the Hitchin' Post will remember Joe, the owner at the time. He and I were talking about things a couple years ago and he mentioned that he paid one of those organizations $500 or so a year so we could play in his place that Friday. I was rather shocked, my response being that he did NOT need to that.

Did he get caught? No, he just didn't want to get caught. He also said it was worth it, that's how much he liked having us there. I'm sure he made well over 500 bucks on those nights, even the locals poured in, but still.

[drlj]

Todd should send a monthly payment covering only songs in G. Doing one in D would cost extra, but what’s the chance of that?

[Marshall]

I’m sure we spent $500 on alcohol and elephant ear sandwiches.

But I seriously doubt he was in any jeopardy.

[TKennedy]

We lost one of our favorite background music restaurants when the suits showed up and shook down the owner. Didn’t that happen at the 421 Bill and Marty?

[billhammond]

Nov 27, 2022 17:12:44 GMT -5 TKennedy said:

We lost one of our favorite background music restaurants when the suits showed up and shook down the owner. Didn’t that happen at the 421 Bill and Marty?

That may have happened, Terry, but I'm not sure. I used to play there about once a month, and I can't recall how or why that ceased to be the case.

[Russell Letson]

I suspect that any university-neighborhood venue that offers music* can expect a visit from the PRO reps--and it won't just be from one, since their catalogues do no overlap and they all assume that somebody will eventually play one of their licensed works. And one is all it takes to bring the penalties, if they manage to document it. So a venue owner isn't going to have to pay just ASCAP or whoever--though since the PROs seem to work on a sales-territory model, a given rep might be less aggressive. It wouldn't surprise me to hear that the 421 got hit up by all three PROs and decided that the combined costs were not going to be matched by increased income. That's a story that shows up all over the discussions of PROs and the value of music.

* And there are licenses for ambient, piped-in music as well. The PROs do not miss a trick.

[billhammond]

I played for years at Nova Wine Bar in Hudson, Wis., whose tough-as-nails owner/manager told me of how she was constantly harassed by PROs, even calls to her home phone. Her reply to those guys was "No, I'm not paying, take me to court," which none of them ever did, which I found fascinating on multiple levels.

I stopped playing there after they moved the warm-weather patio "stage" to a rock formation like 8 feet above the level where the diners were seated. Horrible load-in/load-out, hot setting and distant from potential tippers, etc.

[PaulKay]

What is also frustrating about the whole PRO business is that there is 0% correlation between the fees collected and the artists whose songs are actually played.
It would be at least nice to know that some way, somehow, the fees paid eventually did get to the actual artists whose stuff is being covered.
The artists that they all represent are paid based solely on their percentage of radio play. So basically the artists with the highest radio play gets the majority of the fee money.

[Village Idiot]

So which ones are the artist? The writer or the performer? The writer never seems to get enough credit for anything, as many people assume the artists are also the authors. I assume the performer is the one getting fees, correct?

[Dub]

Nov 28, 2022 12:00:08 GMT -5 Village Idiot said:

So which ones are the artist? The writer or the performer? The writer never seems to get enough credit for anything, as many people assume the artists are also the authors. I assume the performer is the one getting fees, correct?

If you are a registered member of one of the PROs, you are paid by the PRO. And, as Paul says, what you get is based on the number of times your music is played over the radio. If you are an artist, it's the number of times your recording is played, if you're the composer, it's based on the number of times a recording of your composition is aired regardless of the performer.

You get nothing if you're a singer-songwriter whose music is seldom aired.

And no one tracks the tunes played in live performances except the PROs and only to see if any of their licensed music is being played.

[aquaduct]

And if I recall, it was about that same time that the IRS got the notion that tightening up the accounting rules for venues would guarantee them several tens of dollars in tax revenue by forcing W2s on any musician who made more than $600 in a year at that particular venue. Thus folks could book my wife 3 times and then book me 3 times without incurring the wrath of the Federal government.

At that point playing music became much more of a PITA than it was worth.

[Russell Letson]

It's been a while since I looked into the PRO sampling systems, but at one time singer-songwriters would complain that the broadcast outlets where they were featured--mostly college radio stations--were under-represented in PRO surveys. On the other hand, live performances do figure in some surveys--there's a protocol for submitting set lists, though I suspect that is limited to large venues. Here's one description of the landscape:

In the US, only top-200 highest-grossing live venues (identified by Pollstar) report the songs played to the PROs, which then extrapolate that data on the entire live venue landscape. Radio broadcast logs are full of corrupted metadata and human errors — so the PROs usually combine the radio reports with airplay tracking data to get a report of the local airplay. And even going through all those hoops, PROs are never able to get complete data on all music used in the country.

soundcharts.com/blog/performance-rights-organizations

Soundcharts, by the way, is in the business as well, so their account is not disinterested.

A not-uncommon not-a-joke I heard more than once from the players we booked for the Folk Society: "My dues make [insert current hot pop artist here] rich." Another n.a.j.: "My ASCAP income for the last few years is in the mid-two-figures." Another artist described what he does with his PRO checks: He wallpapers his basement with them. I can't imagine that things have gotten better in the last three years.

[Dub]

Nov 28, 2022 12:40:16 GMT -5 aquaduct said:

And if I recall, it was about that same time that the IRS got the notion that tightening up the accounting rules for venues would guarantee them several tens of dollars in tax revenue by forcing W2s on any musician who made more than $600 in a year at that particular venue. Thus folks could book my wife 3 times and then book me 3 times without incurring the wrath of the Federal government.

At that point playing music became much more of a PITA than it was worth.

I got a tax ID no. for Castle Ridge years ago. It didn’t cost anything and has worked out well. We get single gigs that top the limit so we often get asked for a tax ID. I set up a DBA checking account that also costs nothing. We write off all our music-related purchases and claim milage.




On edit: I should add that our tax accounting is always professionally done, not by an H&R Block prep outfit but by a professional accounting firm.

[John B]

Nov 28, 2022 12:40:16 GMT -5 aquaduct said:

And if I recall, it was about that same time that the IRS got the notion that tightening up the accounting rules for venues would guarantee them several tens of dollars in tax revenue by forcing W2s on any musician who made more than $600 in a year at that particular venue. Thus folks could book my wife 3 times and then book me 3 times without incurring the wrath of the Federal government.

At that point playing music became much more of a PITA than it was worth.

Rules for issuing 1099s have not changed in decades, and apply to any payments made by a business entity, estate or trust for services to individuals, partnerships and LLCs exceeding a total of $600 per year. And they apply to any payment by a business entity, estate or trust to an attorney, regardless of amount or business organization.

Penalties for failure of the business to file 1099s is now $280 per form not filed (up from $50 last year). In 26 years of public accounting, assisting businesses in filing 1099s, I never had the IRS assess penalties for failure to file. Never. Technically a business can't deduct payments for services if they did not issue a 1099, but once again I never had the IRS question a taxpayer regarding 1099 filings. I did deal with taxpayers who did not report all of the income reported to them on a 1099.

If you are like any musician/performer I have ever worked with, you would not have earned significant amounts of revenue and true verifiable expenses likely offset any revenue; ergo no taxable income. If it's a hobby (as it would be for anyone with a primary source of income) a loss would not be deductible, but I fail to see how a piece of paper inhibits performance for money.

I fail to see any reason why matching payments to taxpayers is an issue, unless for some reason that person thinks that the rules that apply to wage earners shouldn't apply to them.