The Day the Music Died

Why small businesses must pay mega-pop stars or drop local bands



At home, or in your car, radio's free. You may have to sit through some insufferable ads between songs, or you may feel compelled to donate to your local public station, but once you've bought the box, you can hear all the songs you want from the airwaves.

But turn on a radio for customers in your boutique clothing store, plug in your iPod for your café clientele, or invite a local accordionist to entertain diners at your restaurant, and all of a sudden you have to pay up. Not to that accordionist, necessarily, or the local radio station you're jamming to — but to one or more national agencies that collect fees on behalf of hundreds of thousands of songwriters around the world.

Those agencies say fees are necessary for songwriters to be properly paid for their creative works. But the fees can be hefty, and some small business owners argue that they end up hurting local musicians who lose gigs when venues drop live music to save money.

Joe Filgas, the owner of two Café Nooner restaurants in Eureka, recently canceled ongoing live performances at his Henderson Center restaurant when the American Society of Composers, Authors and Publishers (ASCAP) pressured him to begin paying licensing fees.

ASCAP, a nonprofit based in New York City, is the oldest and perhaps best known songwriters' organization, representing 470,000 members. It was founded in 1914, and during the next 25 years two more associations sprang up: SESAC, which originally stood for the Society of European Stage Authors and Composers, and now is a privately owned for-profit group; and Broadcast Music, Inc., founded by broadcasters to offer a cheaper alternative than ASCAP, representing 600,000 songwriters.

Filgas knew about licensing fees when he bought the Old Town Café Nooner at the end of 2011. He signed up for a commercial service that covered his licensing fees to play satellite radio in the restaurants and to host live music — or so he thought. Then, he said, "harassing and sneaky" phone calls started coming in asking employees what music, karaoke or other events they were holding at the restaurant. He suspected the calls were from licensing associations.

ASCAP sent letters to Café Nooner. "We kept throwing them away because we were covered," Filgas said. The restaurant played canned music during regular hours and hosted live bands during Arts Alive. In late 2012, Filgas opened Café Nooner 2 in Henderson Center and local musicians began to play there.

About a month ago, with calls and letters from ASCAP continuing to come in, Filgas contacted the company that provided his satellite radio license and discovered he had been wrong: He was not licensed to host live music at the restaurants.

It was time for a quick and difficult decision: Continue live music at both restaurants for $2,300 a year?

"It's nice to have live music, but I don't think it necessarily draws people into your restaurant," he said. "A lot of the restaurants are providing that as a luxury to the customer and not passing that cost onto the customer."

Filgas opted to pay $1,000 a year to continue live music once a month during Arts Alive at the Old Town restaurant. That doesn't include the $35 a month he pays to pipe in the radio at both locations.

He said at least one of the musicians who had been playing his restaurant was upset about the loss of a gig, but understood his position.

That musician was Anna Hamilton, a guitarist who has been playing in and around Humboldt County for decades. Losing a gig at the Café Nooner forced her to continue using food stamps, she said, and it wasn't the first time pressure from licensing agencies put her out of work. In the past, she's picked up a venue's ASCAP fees out of her own pocket — and she's considering that again, if she can pool some money from like-minded musicians.

Three years ago, Oberon Grill also discontinued live music because of licensing fees, co-owner Roy Kohl said. Still, he estimated the restaurant has received more than 100 calls in the last five years from licensing agencies, and said he suspects the groups use "secret shoppers" to spy on the restaurant.

ASCAP has 35 teams assigned to monitor venues all over the U.S., both by phone and in person. Who do these teams contact? Just about every business you can think of that plays live or canned music: gyms, farmers markets, restaurants, retail stores — the list goes on.

Halsey Ray, a guitarist and songwriter from Fortuna, said it's "absurd" for venues to get upset about licensing fees. "That gets used by venue owners a lot as a reason why they shouldn't have to pay us. Or why a pitcher of beer or a meal is worth five hours of performance."

It's a misconception, Ray said, that ASCAP is an "evil, greedy, giant" corporation shaking down small business owners and screwing over musicians. True, ASCAP collected $600 million in domestic license fees in 2012, according to its website, but it paid out $444 million of that to its American members.

Ray admitted that licensing organizations can be heavy-handed at times, with threats of lawsuits and pressure on business owners. It's a little overboard to charge musical instrument shops in the off chance a customer lays into a Zeppelin riff while testing out a guitar, he said, but "I understand what the fees are for and I like the principle." Tough-mindedness helps songwriters who are hemorrhaging money everywhere else.

Plus, playing covers of someone else's tunes is the way working musicians make a living in a place like Humboldt, he said. Casinos, weddings, private gigs — "The bands I play in where we actually make money: cover bands."

Ray has been playing and writing music for "quite a long time." He's a member of BMI — though he says he's never collected royalties, because he hadn't registered any songs until recently — and he plans to become an ASCAP member in the next year or so, when he's polished some of his material.

And there is, of course, one loophole for musicians and the venues who want to host them — limiting the playlist to original song.

Café Nooner's Filgas is planning two live music events at his Henderson Center location with artists who have agreed to play only original material. He is comfortable with a verbal guarantee — "I've talked to both of them in depth," he said. "I'm going to be there. I know what their sets are going to be."

But that's not a realistic solution for most venues, said Ray. If a band promises to play no covers, then launches into "November Rain," the venue owner is still liable. That could lead to legal disputes and bad blood between venues and musicians.

At Six Rivers Brewery in McKinleyville, which pays $5,000 a year in licensing fees, co-owner Meredith Maier looks on music as another amenity for her customers. "It's like putting flowers on the table." Six Rivers, which has a full bar and stage area, is more of a music destination than Café Nooner, and it's a larger building. ASCAP determines its live music licensing fees by a pair of factors: the occupancy of the building and whether a venue charges admission.

Maier said the fees were a "big blow" when she and Talia Nachshon bought the brewery in 2004. Early on, they were doing bigger shows and more music, but they've since toned that down — focusing on being a good stop for traveling and local bands, while offering a small guarantee for each gig.

She is dubious about ASCAP, though, echoing a common criticism that it benefits mega-pop stars but does little for small, struggling local and touring bands.

"It's kind of a racket to be honest — I'm not 100 percent sure how much money trickles down to the band," she said.

ASCAP vice president of licensing Vincent Candilora said the royalties paid to its members are based on a complex metric of census studies, sample studies and digital monitoring of more than 2,500 radio stations. The artists with a bigger chunk of those markets — as well as those who play venues like sports arenas, amusement parks and some larger concert halls, which report what they play — get a bigger share of the royalties.

In that world of radio conglomerates and pop stars, it's difficult to imagine your favorite Humboldt County bands making much off royalties. Until they've hit the big time, maybe. Sara Bareilles, whose picture is splashed across the ASCAP website, is quoted giving the agency this endorsement, "I've always felt really well-taken care of like, human-to-human.... I just feel like these are people who actually care about what happens to me."

Eric Sampson, a Los Angeles songwriter and session musician who grew up in Humboldt, estimates he gets 25 percent of his income from royalties collected by ASCAP. Sampson owns a recording studio and is a producer and engineer as well as a full-time musician, living in a city where plenty of musical gigs can lead to royalty payments. For him, "It's quite necessary to be involved in at least one of those associations," not only for royalty payments but because they fight for musicians' and songwriters' rights.

And if you listen to music, you've gotta care at least a little about musician's rights. Right?

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