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5 Things You Didn’t Know About Performance Licensing
Music Business

5 Things You Didn’t Know About Performance Licensing

frank gulinoby Frank Gulino, Berenzweig Leonard, LLP and member of Local 161-710 (Washington, DC)

Whether you write music or operate a venue that features live performances, licensing impacts your business and livelihood. For composers and songwriters, licensing revenue provides an important source of income that enables them to keep doing what they do best. For bar and restaurant proprietors, providing live entertainment can help draw a broader audience, give the regulars a reason to stick around and buy that next drink, and generally improves the ambiance, adding value to the customer experience. By observing licensing requirements and presenting only appropriately licensed performances, we can ensure that composers and songwriters are able to keep turning out hits and also that venues are able to keep showcasing exceptional music played by talented bands. Given the broad reach and importance of licensing, there are a few key things critical to understand, no matter which side of the industry you’re coming from.

5 Things You Didn’t Know About Performance Licensing

1) The venue, not the performer, is responsible for securing licenses. It may seem counterintuitive that the venue is responsible for licensing a performance, rather than the musicians who are actually performing. The logic is that the venue is the party who ultimately derives the benefit from live performances. For example, a bar with a pleasant atmosphere that includes live music frequently charges a cover, and also sees the additional financial benefits of drawing more customers and being able to charge more for food and drinks than they would without live entertainment. As a result, the liability for unlicensed performances falls squarely on the venue.

2) What kind of venues need licenses? Any venue presenting live performances or playing nonbroadcast recordings needs a license! There are more than 100 different kinds of businesses that need to license music—bars, restaurants, hotels, shopping centers, museums, cruise ships, airlines, orchestras, and many more.  

3) Performance licenses are required whether music is live or played from a recording. Radio and television don’t count, as long as you’re not charging a cover just for having the radio on, but playing a CD, record, or digital recording over the speaker system at your restaurant or retail store to liven up the atmosphere, or on an airplane to entertain passengers in flight, definitely requires a performance license.

4) If you place a caller on hold and play music over the phone, you need a license. Even hold music counts as a performance, believe it or not.

5) The rights to perform, record, physically copy, or use music in a film or commercial are licensed separately. Don’t assume that, if you have permission to do one, you have permission to do them all! Also, because those rights are not necessarily all held by the same party, you might have to do some legwork to secure all of those different permissions—but that’s another article.

So what can you do about it? The performing rights organizations in the North America—ASCAP, BMI, and SESAC (in the US), and SOCAN (in Canada)—are responsible for collecting licensing fees and distributing royalties for roughly 20 million different songs. Each organization offers blanket licenses that your business can purchase for a flat annual fee in order to have unlimited access to the largest repertories of music in the world. The songwriters get paid and the business owners get the right to use all the great music that’s out there. In the licensing game, everybody wins as long as you know the rules.

Frank Gulino (@GulinoFrank) is a composer, trombonist, Local 161-710 (Washington, DC) member, and business attorney living in the Washington, DC, area. As a composer, his works have been commissioned, recorded, and performed by some of the world’s foremost brass soloists, chamber groups, and symphony musicians at venues such as the Kennedy Center, the US Capitol, and conservatories and universities around the world. As an attorney, Gulino practices in the Entertainment, Sports and Media Law group at Berenzweig Leonard, LLP, in Tysons Corner, Virginia. He is an artist/clinician for the Edwards Instrument Company and performs exclusively on Edwards trombones.

Music Business, Resources

Top 10 Reasons to Record AFM

In summary, and with apologies to David Letterman, the EMSD staff have compiled the Top 10 most important reasons why you should record under AFM agreements:

10 Standard wages—You are guaranteed to receive at least the minimum standards for your services.

9  Doubling and overdubs—In addition to the wage payments, the employer is required to make payments for your doubling and overdub services.

8  Foreign use—If you perform services in the production of a show produced under most of the AFM’s television agreements, aside from the payment due to you for your original services, if the program is broadcast overseas, you will receive additional payments.

7 DVD payments—If the program is released into the DVD format, you will be entitled to additional payments that will continue to accrue based on the gross receipts.

6 Pension fund contribution—The employer is required to make a pension fund contribution on your behalf, which puts your session work into the system.

5 Health and welfare fund contribution—The employer is required to make a health and welfare contribution, either to the health plan of your local (if it has one), or directly to you.

4 Special payments fund—If you perform services on a session(s) for a sound recording, you are guaranteed to receive payments from the Sound Recording Special Payments Fund for the next five years.

3 Secondary markets fund—Under the Basic Theatrical Motion Picture or Television Film Labor Agreements you will qualify for distributions from the Film Musicians Secondary Markets Fund, should the film be released to outlets such as pay cable TV or the home video market.

2  Reuse—Under the Commercial Announcements Agreement you will receive periodic reuse payments for any new cycles the commercial(s) enter into.

And the number one reason to record AFM:

1  New use—If you perform services under an AFM agreement and your product is licensed for use in another medium, such as a theatrical motion picture, television film, or commercial announcement, you will be entitled to additional payments as if you had performed the work under that agreement.

Electronic Media Services

Top 10 Most Important Reasons Why You Should Record Under AFM Agreements

In summary, and with apologies to David Letterman, the EMSD staff have compiled the Top 10 most important reasons why you should record under AFM agreements:

10. Standard wages—You are guaranteed to receive at least the minimum standards for your services.

9. Doubling and overdubs—In addition to the wage payments, the employer is required to make payments for doubling and overdub services.

8.  Foreign use—If you perform services in the production of a show produced under most of the AFM’s television agreements, aside from the payment due to you for your original services, if the program is broadcast overseas, you will receive additional payments.

7. DVD payments—If the program is released into DVD format, you will be entitled to additional payments that continue to accrue based on the gross receipts.

6. Pension fund contribution—The employer is required to make a pension fund contribution on your behalf, which puts your session work into the system.

5. Health and welfare fund contribution—The employer is required to make a health and welfare contribution, either to the health plan of your local (if it has one), or directly to you.

4. Special payments fund—If you perform services on session(s) for a sound recording, you are guaranteed to receive payments from the Sound Recording Special Payments Fund for the next five years.

3. Secondary markets fund—Under the Basic Theatrical Motion Picture and Television Film Labor Agreements you will qualify for distributions from the Film Musicians Secondary Markets Fund, should the film be released to outlets such as pay cable TV or the home video market.

2. Reuse—Under the Commercial Announcements Agreement you will receive periodic reuse payments for any new cycles that commercial(s) enter into.

And the number 1 reason to record AFM:

New use—If you perform services under an AFM agreement and your product is licensed for use in another medium, such as a theatrical motion picture, television film, or commercial announcement, you will be entitled to additional payments as if you had performed the work under that agreement.

 

Recent News

10 Questions Music Entrepreneurs Should Be Able to Answer

by Michael Drapkin

The days in which the music offered in stores and on the radio was controlled by a handful of large corporations are rapidly receding. Increasingly, working musicians are following their own paths–and hearts–by becoming music entrepreneurs, and reaching out to audiences directly.

The Internet is the rock that has shattered traditional models of the music industry, and many acts are finding it tempting to bypass a traditional path to a musical career, working for someone else. Today’s working musicians are starting their own record labels and merchandising companies, and they are distributing CDs, booking gigs, and managing their own careers.

But before you tell your music director what he can do with his baton, you may want to think about the following issues:

10 Questions Music Entrepreneurs Should Be Able to Answer

1) What makes you different? You are competing with many other musicians with similar dreams about making it big on their own terms. What is different about what you want to do? How are you going to stand out? Think about what you are proposing to do and see if it fulfills one of the following: Do you entertain people? Do you save or make them money? Do you make their lives easier? If you cannot say “yes” to one of these three, then get a new plan.

2) Can you take initiative? Every journey starts with a first step, and that is especially true with new business ventures. Just taking the plunge is a huge challenge. Can you bring together everything that is needed for success?

3) Can you make decisions? Having the title “chief executive officer” does not guarantee success. In fact, I have seen many startup firms fail because of lack of decision-making ability. Sometimes even a wrong decision is better than no decision. Find mentors or friends who can give you good advice, and then execute! That’s what “executives” do.

4) Are you an innovator? Do you sense opportunities that perhaps few others see? Do you have a vision? Here are three reasons why people start businesses: a) to begin a professional practice, like a doctor or lawyer (freelance musicians often fall into this category); b) you see a market for something that doesn’t yet exist (but it may not exist because no one wants it!); c) you think you can build a better mouse trap.

5) How do you deal with risk? Are you afraid that if you fail you will become homeless? Unlikely, but if you only see a gray cloud of uncertainty instead of a fantastic opportunity about to come to your door, then don’t become an entrepreneur.

6) Are you organized? Unlike in a big company with lots of staff and resources, you are going to have to start out doing most things yourself, from making the coffee to bookkeeping. Are you a natural organizer who makes “to do” lists? Do you have follow through?

7) Can you sell? Now there’s a dirty word! The truth is that musicians advertise their wares every time they play. Now just apply that passion to your business venture. Marketing and advertising is just spreading the word about something you love.

8) Can you plan? The traditional way of starting a business is to write a business plan, and there are lots of tools and resources for doing that. In order to be successful, you need to understand what you want to do, how you plan to do it, and what it will cost.

9) Where will you get the capital? It takes money to make money. Now that you have made your business plan, where will you get the funds you need in order to be successful? The single biggest reason why businesses fail is lack of capital.

10) Are you an optimist? Yes, you can be a realist, but you still have to believe in what you are doing. Entrepreneurs, by their nature, are optimists. Are you?

The 10 questions above will be explored further at the Brevard Conference on Music Entrepreneurship, at Brevard Music Center, Brevard, North Carolina, July 27 to 29.

Michael Drapkin is executive director of the Brevard Conference on Music Entrepreneurship. Learn more at www.bcome.org.

Recent News

5 Essentials of Music Career Success

by Peter Spellman, Director of Career Development at Berklee College of Music

Music is too big a world for a one-size-fits-all model of music career success. Musicians’ career paths are as unique as their fingerprints.

Nevertheless, there are a few guidelines that I believe apply to anyone trying to make a living and a career out of their love of music.

Here are 5 essentials of music career success:

1) Hone your talent and realize there is a place for you. Not everyone is a Quincy Jones, The Beatles, or a Bruce Springsteen, but if an artist like Tom Waits is a vocalist, then there is definitely room for you too. Do the work necessary to excel in your niche, whether it’s writing a chart, engineering a session, providing backup vocals, or teaching kids the basics of music.

Your goal, to use marketing lingo, is to “position” yourself in your market as the go-to person for that particular skill or talent. Don’t worry too much about industry rejection. Every record label in Britain initially passed on The Beatles and The Rolling Stones. The key is believing in yourself and persevering beyond others’ opinions (even those of “the industry”).

2) Connect with as many people as you can because relationships drive music careers more that anything else, even talent. Music is a “who you know/who knows you” kind of business. The quality and quantity of your relationships will be the primary engines of your progress. Try developing creative projects with fellowmusicians. Perhaps you can combine your live show with two other acts and present the package to a local promoter. There is strength in numbers. Finding the right combinations takes experimentation.

If you’re interested in working in the business side of music, then interning at a music company is the best way to both learn how the biz works and connect with those who can help move your career along.

3) Accept the new powers in your corner and take responsibility for creating your own success. The last 20 years has given you the means to both produce and distribute your own music on a global scale. New models of business are emerging in the world of music. A “record deal” is not necessarily the goal any longer. The Internet has clearly become your “open mike” to the world, and desktop technologies provide you with ways to have the look, reach, and efficiency of larger companies. Dare to be different.

Remember, new power also means new responsibilities. Global reach means a potentially far-flung audience. You need to be ready for the incoming messages and questions from this new market. Have you created the best business structures to hold and express your work? Are you setting up effective systems to communicate with your audience? It’s up to you to create your own success and not merely rely on a record company or agent to do the work of making you visible in the marketplace.

4) Understand that every business is becoming a “music business” and so musical opportunities are multiplying. It took a coffee company and a computer manufacturer to teach the music industry how to sell music in the digital age! Nonmusic businesses everywhere are seeking creative ways to add music-related services to their mix. This means that you needn’t be dependent on the traditional “music industrial complex” for music career success.

Think of companies you already resonate with and try brainstorming ways you can link up. Start on a local scale. It might be a gift shop, bookstore, or arts organization. It may even evolve into a full-fledged sponsorship for a tour or recording project. Finds ways to add value to what these businesses are doing with what you have to offer. Forging creative alliances is key to building a multi-dimensional music career.

5) Prepare to be versatile and to wear several hats initially, until your “brand” is established. Most musicians I know have had to cobble together several revenue streams in the early stages of their careers in order to make enough money to support themselves. Many have also had to take on nonmusic “lifeline careers” just to make ends meet, pay down debt, or supplement what they earn from music. I tell musicians to not so much look for “a job,” but to seek out the work that needs to be done. It might be arranging a song, playing a wedding gig, helping organize a concert series, doing a jingle session, offering private music instruction, or writing a review of your favorite band’s new CD.

Eventually, all the different experiences merge together into the roaring river that will be your music career. At that point you’ll be visible, in demand, and able to name your price. And that’s career success.

Peter Spellman is Director of Career Development at Berklee College of Music, Boston. This article is adapted from his new book, Indie Marketing Power: The Guide for Maximizing Your Music Marketing (2008, Music Business Solutions).

International Musician

Preparing For a Gig: 3 Lessons Learned the Hard Way

Thanks to Gig Salad for sharing some wisdom on three lessons learned the hard way when it comes to a gig. You can read the original article here. 

So you’ve landed a gig. Awesome! Maybe it’s your first one, or maybe you’ve been at it for years. Either way, there are few things to remember when preparing to head off into the gig unknown. Our resident musicians and booking agents, Joey and Devin, put their heads together and came up with some lessons they learned the hard way. Now you don’t have to! (We’ll keep the lessons anonymous so as not to embarrass the contributors.)

#1: I Forgot to Sign a Contract & Get a Deposit

Sometimes in the midst of booking a gig, the most important part can be forgotten. You show up, do your thing…and then the excuses start. Maybe someone forgot the checkbook, or someone else was supposed to pay you. Bottom line is, you don’t get paid. Unfortunately, if you don’t have a contract or a deposit, there’s not much you can do. So we can’t stress enough: Get those in order before the gig. To help you avoid performing for free, we offer a handy booking tool to take care of all of that for you. One more thing you don’t have to worry about!

#2: My String Broke During the Show

Equipment malfunction is always a risk at performances. You know it, we know it. So to avoid stopping the show altogether, make sure you have some backups on hand. Whether this is strings, batteries, cables, extension cords, or clown noses, it’s always better to be over-prepared than under. Don’t assume that the venue or client will provide the things you may need. Make yourself accountable for everything. Use a checklist to make sure you have everything you need for each gig.

#3: I Drank A Protein Shake Before the Show

We can’t help but laugh a little at this “lesson learned” but it does have some truth behind it. Think ahead to how long you’ll be in the spotlight, and plan accordingly. You may not get a bathroom break for awhile! Read your contract carefully and check out when and where to load in, start time, breaks, end time, etc. Nothing is more miserable than being physically uncomfortable during a gig! So plan ahead, don’t drink a gallon of lemonade beforehand, put on deodorant (thanks, Devin!), and you should be fine.

Happy Gigging!