logo
Restaurants, bars consider turning off music as licensing fees skyrocket

Restaurants, bars consider turning off music as licensing fees skyrocket

Ever since operetta composer Victor Herbert sued Shanley's restaurant in New York in 1917 to force it to pay for playing his song on a player-piano, songwriters and music publishers have depended on Performing Rights Organizations to make sure they get compensated.
For much of the last century, three organizations dominated the industry, a relatively staid and unglamorous corner of the music scene that remained largely unchanged throughout the eras of radio, records and CDs. But the rise of streaming has led to a surge in revenue and spawned a handful of new organizations looking to cash in.
Now there are at least half a dozen PROs in the US, representing different songwriters and publishers, each demanding that bars, restaurants, hotels and other venues pay a fee or risk being sued.
Businesses say the rising licensing costs have become overwhelming, and some question whether it's even worth playing music at all. The House Judiciary Committee last fall asked the Copyright Office to investigate the current system and consider potential reforms. In February, the Office opened an inquiry and received thousands of comments from businesses and songwriters.
'The growing proliferation of PROs and their lack of transparency have made it increasingly difficult to offer music in our establishments,' hundreds of small businesses from across the country wrote to the Copyright Office in a joint letter. 'The issue is not that small businesses are unwilling to pay for music,' they wrote, adding that the current system is unfair and untenable. 'Small businesses can be left feeling like PROs have them over the proverbial barrel.'
Creating a welcoming ambiance in a restaurant or yoga studio isn't as simple as putting on a Spotify playlist. Streaming has unleashed trillions of songs and every one must be licensed and have royalties paid to the songwriter whenever any track is played in public. Violations can cost up to $150,000 per infringement.
This booming market for music publishing has led to a windfall for the two major PROs. ASCAP, founded in 1914, and BMI, established in 1939, together represent more than 90% of musical compositions in the US today with talent lists covering Taylor Swift, Olivia Rodrigo, Jay-Z, Lady Gaga and Eminem, to name a few. SESAC, founded in 1931, rounds out the original three and operates on an invite-only basis.
The American Society of Composers, Authors and Publishers (ASCAP,) the oldest and, as a nonprofit, the only PRO to publicly share data on its collections and payout, has seen revenue jump to $1.8 billion in 2024 from $935 million in 2010. Broadcast Music Inc. (BMI), in its last public report as a nonprofit in 2022, showed record revenue of $1.6 billion, with 48% of that from digital sources.
This kind of growth hasn't gone unnoticed. In just over the last 12 years, three new PROs have emerged. Legendary music manager Irving Azoff founded Global Music Rights in 2013, offering 'boutique services' and royalty transparency, building a stable of more than 160 high-profile songwriters like Bad Bunny and Bruce Springsteen.
AllTrack, founded in 2017, caters to smaller, independent songwriters. Pro Music Rights launched in 2018 and says it represents more than 2.5 million musical works, including AI-created music.
Many songs today are composed by several songwriters, each of whom could be affiliated with a different PRO. Therefore, to legally play those songs, establishments must pay for a license from each PRO. Most PROs offer blanket licensing agreements, meaning that they provide access to their entire repertoires for one fee. And while that gives a particular venue a wide range of musical freedom, it also means bars and restaurants are paying for thousands of songs they may never play or are essentially paying twice, in instances where a song with multiple writers is represented by more than one PRO.
The National Restaurant Association said its members pay an average of $4,500 per year to license music, or 0.5% of the average US small restaurant's total annual sales.
'This may not seem like a large amount, but for an industry that runs on an average pre-tax margin of 3%-5%, this cost is significant, especially since operators don't clearly understand what they get for this particular investment aside from avoiding the very legitimate threat of a business-ending lawsuit,' the association wrote in public comments to the Copyright Office.
The American Hotel & Lodging Association said the mushrooming number of PROs has led to 'significant increases in both financial and administrative burdens.' It gave an example of one 'major global hotel chain' that reported the cost per hotel for PRO license fees rose by about 200% from 2021-2025, with some hotels seeing increases of 400% or more. A large hotel that hosts occasional live music events could be paying a single PRO $5,000 to $20,000 a year. If it's paying all of the major PROs, it could be incurring as much as $80,000 in fees, according to the association.
BMI said its licensing fees have remained 'relatively steady over the years' and are based on objective criteria that apply equally to all similar businesses. Fees for individual bars and restaurants start at just over $1 a day, according to BMI. Other factors that go into licensing fees include the occupancy rate, and the type of music being played — live, DJed or recorded, for example.
In the 1917 Supreme Court case that delivered Herbert his victory over Shanley's, Chief Justice Oliver Wendell Holmes wrote: 'If music did not pay, it would be given up.' He wasn't only referring to the songwriters, but also to the venues themselves and addressing whether music helped generate revenue. The ruling was a win for Herbert personally but also for ASCAP, which he had helped found, and established the royalty payment system that's largely still in use today.
A spokesperson for ASCAP said an increase in fees paid to songwriters by venues is an appropriate and inevitable outcome of a growing market. The organization's musical repertoires have grown exponentially over the years to include tens of millions of works, giving music users more music and more choice, the spokesperson said. ASCAP says about 90 cents of every dollar it collects from licensees is made available for distribution to its members as royalties.
'Licensees are seeking more regulation of PROs because they want to pay songwriters less,' ASCAP Chief Executive Officer Elizabeth Matthews said in a statement to Bloomberg. 'If transparency, efficiency and innovation are the goals, more free market competition among PROs is the answer— not unnecessary government intervention.'
Songwriters depend on PROs for their livelihoods, especially in the streaming era. Many individual songwriters wrote to the Copyright Office in defense of the PRO system, expressing concern that government regulation would only diminish their hard-won earnings.
'Every royalty payment I receive represents not just compensation for my work, but my ability to continue creating music that enhances these very businesses,' wrote Joseph Trapanese, a composer who has created scores for film and TV.
Performance royalties make up about half of total publishing revenue, which is collected by PROs and dispersed to songwriters, according to the National Music Publishers' Association. Last year, only about 5% of songwriters' earnings came from bars, restaurants and other venues, a figure that is 'significantly undervalued,' according to NMPA executive vice president and General Counsel Danielle Aguirre.
'There is a substantial opportunity for growth here,' she said, speaking at the group's annual meeting in June.
The organization set a goal to significantly increase that money over the next year, likely by enforcing licensing requirements.
Several establishment owners equated the PRO's efforts to collect fees to a mob-like shakedown, citing aggressive on-site confrontations and threatening letters.
BMI said it spends a lot of time trying to educate business owners on the value that music brings to their establishment, federal copyright law requirements and the importance of maintaining a music license.
Lawsuits are always a last resort, a spokesperson said, which is why BMI spends sometimes years on educational outreach. If those efforts are ignored, however, an in-person visit might occur, and BMI may take legal action.
Despite their differences, songwriters and businesses agree that the current system is opaque and bureaucratic and could serve both sides better.
Businesses complain about the lack of a comprehensive database of songs and the fact that there is no easy system for reporting which songs they've played. Meanwhile, songwriters claim that the sheer volume of music and businesses throughout the US makes it hard to track where and when their work is played and to know whether they've been properly compensated.
'What's really being called to question is, is this system working accurately—is the money that should be finding its way to the songwriters' pockets finding its way in an efficient manner?' said George Howard, a professor at Berklee College of Music. 'And the answer is 'no.' There's no excuse for that with the level of technology we have today.'
BMI and ASCAP joined forces in 2020 to launch Songview, a free digital database showing copyright ownership and administration shares for more than 20 million works. The two PROs are exploring including GMR and SESAC, which would add even more songs to the platform.
Some of the complaints about the PRO licensing system go back decades. Michael Dorf, a producer and founder of the legendary Manhattan music club The Knitting Factory, has faced off with PROs numerous times over his 30-some years as a venue operator. In the 1990s, he signed singer-songwriters who performed at his club to his publishing company and submitted their setlists to the PROs, assuming he and his acts would reap the resulting royalties from their performances.
'We didn't receive one penny,' Dorf, who's also the founder and Chief Executive Officer of City Winery, said in an interview. 'To me, there is a cost of doing business, and we want to have the artists and the songwriters properly paid – we love that. What's simply frustrating is to pay money and know it's not going to the reason why it's being collected.'
Caleb Shreve, a songwriter and producer who's worked with the likes of Jennifer Lopez and is also CEO at Killphonic Rights, a rights collection organization, said he hears music he has produced 'all the time in yoga spots and bars, and I've never seen them on publishing statements.' Many songwriters are convinced the current system favors the biggest artists at the expense of middle-tier and emerging songwriters. Because of the blanket licensing system, BMI and ASCAP don't track individual song use by those licensees and instead rely on proxy data, like what's popular on the radio or through streaming platforms, to divvy up those collected fees.
Sometimes radio hits mimic what's played in an arena, restaurant or bar, but not always.
ASCAP said it tracks trillions of performances every year across all media platforms and only uses sample surveys or proxy data when obtaining actual performance data isn't feasible or is cost prohibitive.
Technology could be a way to solve the current issues without regulation. London-based Audoo is one company leading the way.
Founded by musician Ryan Edwards in 2018 after he heard his music being played in a department store and discovered he wasn't getting paid for it, the growing startup uses proprietary listening devices it places in cafes, gyms and other public venues to recognize and log songs. It uploads the data to the cloud, ensuring every artist — not just the chart toppers — receives compensation for their work.
The company has attracted investment from music icons including Elton John and Adele, and its devices are used by PROs in the UK and Australia. It made its first foray into the US earlier this year, placing listening devices in about 180 establishments around the Denver area in a test run.The collected data underscored that what's played in public places doesn't necessarily mirror what's on the popular playlists or radio and streaming platforms. Edwards likens the idea of using proxies to political polling — directionally helpful but not precise.
Audoo found that 77,000 unique tracks were played around Denver over two months, split among 26,000 artists, according to data viewed by Bloomberg News. On average, only 6.6% of the top-40 songs played in the venues also appeared on Billboard's top radio-play chart.
In markets where Audoo has partnered with venues, Edwards said business owners have been proud to support particular songwriters and the music business writ large.
'All of a sudden it went from a push-and-pull of, 'Why do I owe you money?' to, 'Ok, I can understand music is funding the people who create,'' Edwards said.
Carman and Soni write for Bloomberg.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Miley Cyrus Teases Exciting Career Update—and Fans ‘Can't Wait'
Miley Cyrus Teases Exciting Career Update—and Fans ‘Can't Wait'

Yahoo

time9 hours ago

  • Yahoo

Miley Cyrus Teases Exciting Career Update—and Fans ‘Can't Wait'

Miley Cyrus Teases Exciting Career Update—and Fans 'Can't Wait' originally appeared on Parade. While has already spoiled her fans this year with her Something Beautiful album release and accompanying movie, the singer has another special present for fans coming up, with many on the edge of their seat with anticipation. On July 21, Cyrus, along with Spotify, took a moment to promote her upcoming concert film of her Billions Club Live performance in Paris, France. In June, the singer performed some of her biggest hits in front of a select group of fans as she celebrated her success on the music platform, with many of her songs hitting over 1 billion streams. 🎬 The set started with Cyrus' Grammy-winning track "Flowers," which is reportedly the fastest song on Spotify to reach the 1 billion streams milestone, while she also performed other hits like "The Climb" and "Wrecking Ball." Luckily for fans who couldn't attend the event in person, Spotify and Cyrus are releasing a film version of the concert exclusively on Spotify this summer. Cyrus' latest post featured a stunning photo from the event, with the caption reading, "An intimate night in Paris, celebrating Miley's biggest hits. The Billions Club Live concert film is coming soon on Spotify." Fans were hyped up about the tease, with replies like, "We're being served 😍😍😍😍," "Omg! Can't wait," and "Our queen is coming." "This is incredibly beautiful. I can't wait ♥️✨," said another fan, while more wrote, "I am so excited ❤️," and "THE LEGEND MILEY CYRUS ❤️❤️." While Spotify hasn't shared the official release date, fans can expect the concert film to drop soon, as the music streaming platform previously said it would premiere "later this summer." It will be released exclusively on Cyrus Teases Exciting Career Update—and Fans 'Can't Wait' first appeared on Parade on Jul 21, 2025 This story was originally reported by Parade on Jul 21, 2025, where it first appeared. Solve the daily Crossword

Bay Area rock band cuts ties with ‘garbage hole' Spotify over CEO's AI weapons deal
Bay Area rock band cuts ties with ‘garbage hole' Spotify over CEO's AI weapons deal

San Francisco Chronicle​

time14 hours ago

  • San Francisco Chronicle​

Bay Area rock band cuts ties with ‘garbage hole' Spotify over CEO's AI weapons deal

Xiu Xiu, a popular Bay Area indie rock band, is the latest artist to take action against Spotify in protest of the streaming platform's ties to military artificial intelligence technology. "We are currently working to take all of our music off of garbage hole violent armageddon portal Spotify," the San Jose trio revealed in a statement shared to Instagram on Thursday, July 24. Xiu Xiu noted that the process is taking longer than expected due to procedural 'complications.' 'Spotify uses music money to invest in AI war drones,' the caption adds, referring to the platform's co-founder and chief executive, Daniel Ek, who reportedly invested nearly $700 million in European defense technology company Helsing, which is developing AI software for military use. Ek serves as chairman of Helsing and made the investment through his firm Prima Materia, which has been funding the company since 2021. Xiu Xiu told Consequence that their three main labels — Polyvinyl, Kill Rock Stars and Graveface — are in 'full support' of the decision. The group, composed of Jamie Stewart, Angela Seo and David Kendrick, came to the decision a month after San Francisco indie rock band Deerhoof cut ties with Spotify over similar concerns. 'We don't want our music killing people. We don't want our success being tied to AI battle tech,' the Deerhoof wrote in a statement posted to social media Monday, June 30. Its label, Joyful Noise Recordings, backed the choice. 'As a label, we too are sickened by the fact that our releases have inadvertently contributed to the global war machine,' Joyful Noise Records wrote in a separate statement. '(W)e serve the artist. It is ultimately their decision to present their material on whichever platforms they choose.' Several others have also joined the exodus, including the Dutch music label Kalahari Oyster Cult and Australian folk singer Leah Senior. 'As soon as I saw that Daniel Ek is investing in AI military technology, something just snapped and I thought, 'Enough,'' Senior told The Music Network. 'We all know Spotify is bad, has always been bad, but artists are made to feel like we need it, like it's just a necessary evil of the current music world. Well, I'm saying, we don't need them.' Meanwhile, other artists have pulled their music from Spotify due to other grievances with the streaming platform over the years. In 2022, Graham Nash, Neil Young and Joni Mitchell did so in protest of the platform's exclusive deal with podcaster Joe Rogan. Most have since returned.

Dareyes de la Sierra gets his redemption
Dareyes de la Sierra gets his redemption

Los Angeles Times

time14 hours ago

  • Los Angeles Times

Dareyes de la Sierra gets his redemption

In the world of música Mexicana, few artists have been able to successfully evolve their sound and image after decades without rattling their base of dedicated listeners — let alone entice a new demographic of supporters. But this rare occurrence seems to be the case for José Darey Castro, the L.A.-based singer and accordionist who performs under the name Dareyes de la Sierra. His gritty vocals and revamped sound have elevated him as one of this year's most popular singers of corridos tumbados. In May, Darey released his latest album, 'Redención.' A collection of 14 thunderous songs, the album has taken hold of corrido fanatics old and new for its brazen lyrics and turbulent rhythms, perfectly suited for a drop-top evening cruise. The LP debuted at No. 3 on Spotify's Top Albums Debut Global chart. After expanding the track list with a deluxe album in June, the singer will soon embark on his first-ever U.S. tour. Come Aug. 1, Darey and his band will kick off a 20-date run at the Belasco in Los Angeles. He will make stops in major cities including Las Vegas, San Diego, Chicago, Houston and more before wrapping up in Portland, Ore., on Sept. 21. '[My tour] will expose a new facet musically speaking, but I will not forget the songs I've sung before,' says Darey during a video call with The Times. His first release in seven years, 'Redención,' which translates to 'Redemption,' is a fitting self-assessment for the legacy act, who kicked off his career over 20 years ago in Mexico. Norteño aficionados may already be familiar with the power of Dareyes de la Sierra, the band from Navojoa, Sonora, that specialized in sentimental corridos, like early 2000s Billboard hits 'Sufre' and 'Enséñame a Olvidar' — for which the music video bears a close resemblance to the theme found in the 2004 film 'Eternal Sunshine of the Spotless Mind.' Their scorching breakup song, 'Hasta El Día De Hoy,' remained 11 weeks on the Regional Mexican Airplay in 2008. Currently, the song's official YouTube video (re-uploaded in 2018) has reached over 35 million views. But most listeners might have overlooked Darey's early attempts to trek into the world of 'corridos verdes': a marijuana-inspired subgenre that has now become widely acceptable as the drug has been decriminalized in a handful of U.S. states. His 2007 release 'Los En-Kush-ados,' which underscored the blissful state of a smoke session, failed to resonate with audiences at the time — perhaps due to stigma surrounding use of the substance. 'I've always been ahead of the wave,' Darey says. 'When people started singing corridos verdes, I had done so years before. People did not accept it.' Now as this new era of corridos tumbados begins to normalize marijuana use, and the resulting euphoria, Darey seems to have found the momentum for his redemption arc. 'Things happen when they need to, you know?' he says. 'It wasn't a change that happened overnight, because the public has to accept you. We took notice of the musical evolution and the public was more accepting.' Yet music is the main medicine for the singer, who received his first guitar from his father when he was 10 years old — although he later ended up breaking the guitar in a childish fit. Five years later, he picked up the instrument again and never let go. And while there have been moments that would dissuade any aspiring musician from following their passion — including a deadly attack he miraculously survived in 2004 — Darey holds his head high, embracing the tumultuous twists and turns of life and, humbly, his long-awaited flowers. The new LP features guest appearances by the crème de la crème of the genre, such as Tito Double P, Peso Pluma, Neton Vega and Gabito Ballesteros. It's a mastermind move by Darey, who recognizes that most of his new listeners are part of a younger generation, but he also makes clear he is not riding the coattails of younger talent — Darey owns his spotlight. 'I don't do this [type of music] out of obligation, it comes organically from me,' says Darey. His opening track, Italian-folk-inspired 'Vita Fer,' alludes to a sexual enhancement drink. Featuring Tito Double P, the frisky song peaked at No. 1 on the Billboard Mexico Songs chart. The album is altogether an intoxicated romp that illustrates the chaotic rock star lifestyle. Darey's strong, rugged voice and tongue-twisting lyrics break through the purple haze, especially in standout tracks like 'Polvo de Hadas' featuring Luis R Conriquez and 'Boneless' alongside Neton Vega. There's also 'Supreme,' Darey's collaboration with Peso Pluma, which boasts of material luxuries, including iced-out Cartier watches. While he is thankful for the outpouring of support he's received surrounding the release of 'Redención,' he's also aware of the dangers such fame could bring to one's psyche. 'There's a fine line where [you have to be careful] not to get sick,' says Darey. Currently trending at No. 3 on Mexico's Billboard 100 chart is 'Frecuencia,' a cut from his deluxe album. The upbeat jingle calls back to Ice Cube's 1993 hit 'It Was a Good Day.' Although paranoid at times, Darey's opening lines are almost hymn-like: 'I know that I will die, that's why I live life crazy,' he sings, 'I pray that my God guides me down the right path.' 'If you think about the future, it'll cause anxiety. [If you think] of the past, [it'll cause] depression,' says Darey of this empowering new chapter of his life. 'Let's live in the moment.'

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store