Those CDs and tapes rarely come with information about who wrote and published the songs -- the legal copyright owners who must grant permission before the music is authorized for public performances.
"An artist or record company cannot grant permission for performances of copyrights owned by someone else," explained Tom Annastas, BMI Vice President, General Licensing. "Even if the artist is your best friend, permission must be obtained from the actual writer and/or music publisher before a copyrighted song can be played in a business or other public place."
Just as a restaurant or club owner has the exclusive right to use a trademarked logo, name, or even a cooking method - under copyright law, songwriters have the exclusive right to play their songs in public. Even if a recording artist makes substantial changes to the song, or creates a new arrangement, the author of the original composition still owns an exclusive right of public performance. If an unauthorized performance of that music occurs in a business, the proprietor can be held responsible for copyright infringement. In this situation, it makes no difference under U.S. Copyright Law whether the music is played live or by means of CD, tape or karaoke equipment.
Since locating and negotiating with copyright owners is a daunting task for business owners, performing rights organizations like BMI were formed in the first half of the 20th century to simplify the process. BMI can authorize the performance of 4.5 million songs, more than half the music currently played in America, with a single contract. The fees charged by BMI are much lower than one might incur through negotiations with numerous individual copyright owners.
Occasionally, business owners contend they shouldn't have to pay songwriters because playing music in public might prompt listeners to purchase the recordings. "That position originally was tested by broadcasters before most of today's business owners were born," said Annastas. "Most radio stations receive music free from record companies, who hope to generate sales by exposing their music to the public. Nevertheless, radio stations have been required to pay royalties to songwriters for most of the 20th century in the United States. The promotional value of radio is reflected in the royalty rates paid to copyright owners."