BMI And The Little Fella

Venue operators from the 9:30 Club in Washington D.C. to The Great American Music Hall in San Francisco have sent a letter to BMI, objecting to what they believe is a licensing policy that is unfair to smaller venues.

As live music venues renew their policies with BMI and ASCAP, operators of smaller rooms have perceived a discrepancy: arenas will be paying .04 percent of each ticket to BMI and ASCAP while venues 2,500-capacity and below will be charged .08 percent.

“I looked at [the policy] and thought, wow, this is different,” Michael Dorf, founder of the City Winery in New York, told Pollstar. “I did the calculations and found this is many times what it has been in the past. I looked at how they were calculating it and read the fine print, and realized it was really a tiered system that favors big rooms and penalizes small ones.”

He contacted other small venue operators and found that many of them were “blindly writing checks,” not knowing the larger venues were paying less per listener. 

Dorf said he complained to a friend of his, BMI VP Charlie Feldman.

“He sent me a note saying he’ll do what he can and essentially four or five days later I got harsher notes from BMI’s army of attorneys saying, ‘Send us the money,’ which I have not done. I have it; I just don’t want to send it to them out of principle. I’d just like to have this more equitably distributed.”

The letter’s undersigned include Joe Shanahan from Chicago’s Smart Bar, Michael Jaworek from The Birchmere in Virginia, Seth Hurwitz from the 9:30 Club, Peter Williams from the Napa Valley Opera House and Dayna Frank from Minneapolis’ First Avenue.

“Why should a large arena pay .04% per ticket when we all pay .08% per ticket?” the letter says. “What is the difference in a music patron listening to the same set list of songs in a 2,501-seat venue vs. a 300-seat venue? The excessive charge to us ‘small venues’ is a financial burden which is both unfair and hurting our economies.

“When you add BMI’s fee, ASCAP’s fee and SESAC’s fee, the performance fees are becoming an unsustainable cost. In just one example, this new rate structure has increased the annual license from $3,000 to over $15,000 – this is unacceptable.”

Dorf said he tried to discuss the situation with BMI but was told it was their policy and “we needed to sign the new agreement. Period.”

“I want to reiterate that I’m a very strong believer of copyright,” Dorf said. “I think I’m the only schmuck in my entire office who buys music on iTunes. I think we pay very good fees to artists. … I want to support BMI and ASCAP deeply. I think the songwriters deserve it. But I just don’t understand why Live Nation should get a better rate than us.”

A BMI representative was asked if there were differences in fees between large and small venues and, if so, why:

“The license fees that Broadcast Music, Inc. collects from live concerts and distributes as royalties to songwriters and publishers represent only a very small fraction of the ticket revenue generated from the musical performances,” the statement said. “The live concert industry is a specific example of how, when it is reasonable for BMI to do so, we offer volume discount rates to certain categories of licensees. The rates are based upon size of venue and ticket/admission costs, among other factors.”