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American Consumers Hear Music While Parting With Their Cash

Posted in News on January 14, 2002

If you think music is as common as light bulbs in America's restaurants, bars, and retail shops -- you're probably half right.

Nobody is counting light bulbs, but BMI knows where music is played. Research by the performing rights organization that licenses more than half the music performed publicly in America, reveals that music, recorded or live, is now played in about 55% of restaurants and 37% of retail stores.

BMI arrived at these numbers during a survey of 150,000 individual, non-chain business locations. The proprietors were asked if their customers can hear any kind of music, if they play background music, and whether they play CDs, radio and/or television. About 25% of restaurant owners reported they provide live music, either bands or solo performers, to help attract customers and provide ambiance.

With so many merchants using music to entertain customers, the task of locating businesses using music and distributing royalties to songwriters has become a high-tech operation at BMI. Approximately 300,000 songwriters and copyright owners have chosen BMI to represent them in collecting royalties on 4.5 million songs. Operating as a non-profit company, BMI pays out 83% of revenue collected to the songwriters and their publishers. With so much at stake, BMI doesn't rely on surveys to determine who is playing music in public. Many of the businesses are located through their own advertising, through digital phone books and purchased databases. Some are revealed by their competitors down the street.

"Businesses are legally responsible for obtaining permission from the composers before they play copyrighted music," said Tom Annastas, BMI Vice President, General Licensing. "Unfortunately, some don't comply until we call on them. While we'd rather sell them on the value of music, we necessarily spend a lot of time educating some of them about copyright law."

Annastas said the majority of proprietors who hesitate to license the music they play are those with little prior business experience with copyrighted music. "It's understandable that they may be shocked to hear they can't play CDs for customers without permission of copyright owners," said Annastas. "Purchasing a CD conveys only the right of private use to the buyer, not the right to play music in public.

"BMI is patient in explaining copyright law to business owners," he said. "Most people appreciate the value of music, but it's often necessary to explain the concept of intellectual property to people who use music to sell more tangible products, such as food or clothing."

The BMI General Licensing (GL) staff makes contact with all businesses except radio and TV stations and web sites, which are handled by BMI's Media Licensing department. The GL staff initiated more than one million phone calls during 2001 to restaurants, bars, shops, hotels and other business customers. The phone calls often require follow-up letters to answer specific questions and deliver licensing agreements. The mailroom sent out about 180,000 letters to these businesses last year, many by air delivery or certified mail. BMI's sales staff also made more than 12,000 personal visits to business owners, and anticipates visiting more than 17,000 in 2002. BMI records all contact with customers in its computer system for future reference, including phone calls, letters and visits.

"Technology has made us more effective and efficient in serving customers," said Annastas. "We can more quickly locate and contact those businesses using music, while keeping their cost of playing music reasonable.

"Almost everyone would like a free lunch and free music nowadays, but somebody has to pay the cook and the songwriter," Annastas said. "With BMI's help, many songwriters can afford to buy their lunch, and the cook can eat, too."

SOURCENews TAGS Licensing Rights Management