What you need to know about music licensing for meetings and events.

by Nan Little | August 10, 2011 | (2)

SOMEONE OWNS THE RIGHTS TO EVERY PIECE OF MUSIC YOU HAVE EVER HEARD. Many people don’t realize that they can’t just put a CD they’ve purchased into a stereo system and play it for an event without obtaining a licensing agreement with the individual or entity that owns the copyright. And some event planners may not recognize that the licensing fees paid to obtain the right to play a piece of music are how songwriters make the majority of their income from a piece of original music.

It’s commonly believed that songwriters make most of their money off music sales. We may view those in the music industry as rich and famous, but the truth is that a songwriter signed to a traditional record label is paid only about four-and-a-half cents per CD sold. Royalty fees paid to the songwriters for the performance of their music is essential to their ability to make a living creating that music. Even with royalty fees, most songwriters do not make enough money to be self sufficient. That’s why it’s essential that music licensing organizations monitor the use of their members’ music and collect fees on their behalf.

“Music performance royalties, to me, are really no different than anyone’s regular paycheck—we all can relate to looking forward to getting the money we’ve worked hard for,” said Los Angeles, California-based musician Alexander Amato. “We, as artists, need this royalty income to sustain our lives and lifestyles; it allow us to create music for the world to experience.”

The average yearly income through licensing fees for songwriters is US$5,000. According to the law, a person must pay the copyright holder a fee for any public performance of that copyright holder’s piece of music. Of course, an individual doesn’t have to pay a licensing fee if he is listening to a favorite album during a house party, even though there might be a large group of people in attendance. Legally speaking, a person must pay a licensing fee whenever playing a piece of copyrighted music for a group that includes people other than his or her family and friends, broadcasting the music or making a direct or indirect profit off of the performance of the music. If anyone is compensated for involvement with an event—musical performer, promoter or event organizer—then a licensing agreement is required. An event with an admission fee can be exempt if it is benefiting a charitable or religious organization. 

When a meeting is being organized, responsibility for acquiring licensing for any and all music played in conjunction with the event falls on the sponsor or producer of the event. Some mistakenly believe that it is the venue’s or performer’s responsibility to pay licensing fees. Even if the hotel or convention center playing host to the event has a licensing agreement with the copyright holder, the presenter must obtain her own licensing agreement in order to perform any copyrighted music. If an exhibitor in an event is going to include music in a presentation, it is still the event sponsor’s responsibility to obtain proper licensing agreements. 

If everyone had to create licensing agreements with each individual copyright holder for each piece of music, things could get out of hand fast. Fortunately, there are organizations that act on the behalf of copyright holders to insure that they receive compensation whenever someone uses their music. In 1914, Victor Herbert founded the American Society of Composers, Authors and Publishers (ASCAP). Composers of music can join ASCAP, and the organization will create licensing agreements and pay member artists the royalty fees they are owed. Since the creation of ASCAP, other organizations have emerged to represent artists. The three largest groups are ASCAP, Broadcast Music Inc. (BMI) and SESAC (which is not an acronym). These three groups control 95 percent of music licensing (the other 5 percent is controlled by agencies that provide licenses for specific uses). By signing a music licensing agreement with one of these groups, the licensee can then publicly perform any of the music of that group’s members.

If you want to know who owns a piece of music, check with each of the licensing organizations to find out. ASCAP, BMI and SESAC maintain lists of the music they represent, which can be found on their websites (www.ascap.com, www.bmi.com, www.sesac.com). Music licensing agreements are handled on a yearly basis. If an association holds four meetings or fewer a year, they can fill out reports and pay fees 30 days before each event. Those who host more than four meetings or events within a year file the reports and pay fees on a quarterly basis. The amount of the fees depends on whether the music is live or recorded and the number of people in attendance, which is determined by the number of people who are registered guests at the event and does not include the organizers and staff members putting on the event. 

Even if you’ve already obtained a license to play music during a presentation, there are things that license may not cover. If you plan on placing video of your presentation on the Internet, you will need a separate licensing agreement with ASCAP, BMI or SESAC for that specific use. Also, if you’re planning on putting together a video presentation that contains music, that requires a sync license with the song’s publisher.

For meetings held in the European Union, music that is copyrighted in one country maintains its protections internationally. In 1886, the Berne Conventions for the Protection of Literary and Artistic Works (also known as the Berne Union) was created in Berne, Switzerland. The Berne Union governs copyrights internationally. One hundred and sixty-four countries are members of the Berne Union, including all European Union nations. According to the convention, a piece of music is covered by the copyright laws of the country in which it was originally performed or published. The main difference between the U.S. and the European Union in music licensing for meetings and trade shows is that in most countries outside of the U.S. it is the facility that is responsible for obtaining the music license. 

“Regardless of what country you’re in, always check with your professional conference organizer or facility to find out exactly what your responsibilities are for the event,” said Jonathan Howe, founding partner and president of Howe & Hutton Ltd. “The main thing is to be conscious of who exactly is responsible in each situation.”

It’s easy to think you won’t get caught using music you haven’t licensed. The problem is that ASCAP, BMI and SESAC employ individuals to perform random checks at events. Because the music industry has seen profits from music sales drop over the last few years, licensing organizations are highly motivated to make sure they are reimbursed for every public use of the music they represent. If you get caught using an unlicensed piece of music, it could cost you much more than licensing the music in the first place. The damages can cost anywhere from $500 per song to $100,000, not to mention the court costs. 

For example, when you first obtain a music license for your event, you pay a minimum fee of around $140. The minimum fee is adjusted each year based on the Consumer Price Index. At the end of the licensing period, you then pay approximately $.06 per registered attendee for the event minus the minimum fee already paid. If you had 10,000 registered attendees at the events you held over a licensing period, you would pay roughly $460.

“Fifteen or 20 years ago, we saw a lot of activity,” Howe said. “Meeting planners were saying it was the exhibitor’s responsibility to obtain the licenses, and there was some disagreement about that. More recently, ASCAP, BMI and SESAC just send out letters to organizers letting them know they didn’t have a license and asking them to remit.” 

You may be familiar with the phrase “public domain.” When a piece of music becomes public domain, it is no longer copyrighted, and anyone can use it in a public performance at no cost. At this point, the music belongs to the public. Music that was created after Jan. 1, 1978, retains its copyright for 70 years after the death of the composer. If the copyright is owned by a corporation, the copyright extends for 95 years after the piece was first published or for 120 years after the year of creation. Copyrights on any music created before 1978 retains its copyright for 95 years after the original copyright date. Even a piece of music whose original copyright has expired may not be public domain. If a newer version has been recorded and copyrighted, that piece of music is not in the public domain. A lot of music that you might assume to be in the public domain isn’t.

“Now how the world pays to experience music is a whole other ball game,” Amato said. “We [musicians] do the work like anybody does a job, from the man at the dry cleaners to the lady at the corner market and the people on Wall Street. I’ve earned that money, and it is my profession.”

Just like meetings is your profession. One+
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Comments 2

  1. Lisa Pressman 02 Sep

    Many thanks to Nan Little for this well-written article. This is very important and essential information, and very dear to my heart! I am a professional musician (and Director, PR/Marketing, Arizona Sunbelt Chapter of MPI) as well as a BMI songwriter and BMI music publisher. Music is my profession and my passion! Thank you.
  2. Nathan Lively 25 Nov

    If I hire a DJ for my event. Am I required to go over every piece of music they might play?

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