January

Club Owners vs. Musicians: Motivations in the Food Service Entertainment Business

Posted In: Band Management, Career Building, For Businesses, Uncategorized by claybutlermusic

I received an email from a reader asking questions about the viability of live music for food service venues in today’s economy. Is live music really a smart business decision for restaurant/club owners? How can a musician make him/herself more attractive to owners? Here are my thoughts:

Choosing Wisely

In my personal opinion, choosing the right band for a venue is a vital business decision on the part of a restaurant/club owner. Every venue has its own clientele, so the entertainment needs to be tailored specifically to fit that clientele. First and foremost, the entertainment is there (in the owner’s mind) for one reason only: to keep their customers happy and present. The longer a customer stays, the more he/she is likely to purchase. I don’t have the information here, but I’ve read studies on that very topic (how much longer a customer stays with music vs. without, etc.). That attitude can become somewhat off-putting to potential musicians. However, a good entertainer knows that his/her job is to entertain. An entertainer has two bosses: the owner and the patrons. Offend either one, and you no longer have a job!

“Licensing is like Paying Twice for Music”

Perhaps the most confusing issue to owners is that of music performance licenses. I’ve run into too many club owners that try to make their musicians pay for their own licensing. Club owners need to understand that they must pay a blanket performance license (i.e. “royalties”) from Performance Rights Organizations (ASCAP, BMI, and SESAC in the United States or SOCAN in Canada). Copyright law only grants the right to perform music to the copyright holder. If a person doesn’t own the copyright to a song, then he can’t legally perform it without a license. One restaurant owner was so misguided as to refuse to allow me to play at his establishment because I’m a member of ASCAP, and that he did not allow licensed music to be played in his restaurant! [I know, right?! Let's just say he's not in business anymore.]

The confusion comes when club owners feel like they’re “paying twice” (i.e. paying to be able to have music performed, and paying for someone to perform it). That’s a valid concern; however, it’s just another cost of doing business. For example, most establishments sell alcohol. They have to pay not only for the alcohol they serve to their customers, but they also pay for a pouring license to serve it. The situation is almost identical. The problem lies in that people don’t understand how ownership of music works. In fact, where I live, restaurants must pay not only for the band, but also for a PRO license AND for an entertainment license from the local county government if there’s dancing–3 payouts to have live music!

That said, if an owner tries the illegal and unethical practice of trying to make entertainment “pay for their own license”, I usually run away as fast as I can. Those business owners are seriously misinformed or are unethical in their dealings. Either way, it rarely works out well in the end!

Live vs. “Piped-in” Music

Is there’s more money to be made in playing live music vs. piped-in music (muzak, DMX, etc.)? There’s money in both. Canned is better than nothing, according to studies, for keeping patrons at an establishment longer. Again, it depends on your establishment and your clientele. As a patron, I’m always willing to stay longer if there’s live music. In fact, I plan on it. I can’t say that everyone else is like me in that respect, but I’m sure most people are willing to stay longer for live entertainment.

As for where food service venue operators are in respect to hiring entertainment, most search for the cheapest alternative they can find, hence the rise of karaoke. Not only Karaoke entertaining for patrons, but it’s cheaper on the venue. A venue may pay a live band $600, while a KJ (Karaoke Jockey) may only charge $200. Being both a musician and a KJ, as a band member, I may make $100 for the night. I would be doubling that income as a KJ. Similarly, that’s the appeal of solo musicians like a guitarist/vocalist or a pianist/vocalist. The venue pays less than a band, the musicians make more solo than with a band, the customers are entertained, and everyone goes home happy at the end of the night.

Play it Smart (read: It’s Not About You!)

As a musician, keep in mind that you are not playing for yourself. It may benefit you to perform, but you are truly there to make the venue owner money. You make the owner money by keeping his customers there and entertained, happily buying more drinks and food. If you can do that, then you may play there again.

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January

The McTrademark and Intellectual Property Rights

Posted In: Band Management, Career Building, For Businesses, For Worship, Recording, Uncategorized by claybutlermusic

I’ve been teaching a series of seminars and classes on taking your church’s music and media ministry to the next level. We start off by focusing on “keeping it legal” by acknowledging and respecting the intellectual property rights of others. This morning on the WalletPop blog, there’s an article of a teen named Lauren McCluskey, along with another girl with Mc in her surname, who raised $30,000 for the Special Olympics with a charity concert series they called the McFest. McDonalds claimed it was infringement of their “Mc” trademark. In the December issue of Recording Magazine, another teen was sued by four record labels for illegally downloading and sharing 24 songs. The verdict after two trials? Punitive damages of 1.93 MILLION dollars. It seems like every time I pick up a magazine or turn on the computer, there’s an article dealing with an infringement case. It just serves to further remind us that INTELLECTUAL PROPERTY RIGHTS ARE A BIG DEAL!

If you’re a songwriter, performer, or artist, those rights are a big deal to you, too. It’s how you make a living. (See our previous posts on How to Get Paid for your Music and How to Start your Own MusicPublishing Company.) If you’re a venue, church, or broadcaster, they’re also a big deal for you, as well. Understanding the rights of others, in addition to your responsibilities pertaining to those rights, ensures that you don’t get sued (if you abide by them).

The law allows Intellectual Property owners certain EXCLUSIVE rights:

To reproduce the works
To create derivative works
To distribute the works
To perform the works
To display the works

No one else can do those things (well, legally, anyway). So, then, how does a potential music user get permission to do any of those things? Licensing. You must purchase a license in order to use the music of someone else for any reason. Each potential use requires a specific license.

To have music at your venue, club, or restaurant, you need a Performance License from a Performing Rights Organization (PRO) such as ASCAP, BMI, or SESAC.
To broadcast music on television, radio, or the internet, you also need a Performance License from a PRO.
To use music in a church worship setting, copy music, or display music/lyrics, you need a CCLI license from Christian Copyright License International.
To record someone else’s music onto a CD, for example a compilation, you need a Mechanical License, which can generally be obtained through the Harry Fox Agency and a Master Use License.
To record your performance of someone else’s music, for example a CD of cover tunes, you must also have a Mechanical License, but not a Master Use License.
To use someone else’s music on a video for broadcast, you would need a Broadcast License, a Synchronization License and a Master Use License. If it then goes on a CD or DVD for sale, you must add a Mechanical License.

Keep in mind that when you buy a CD, the ONLY thing you own is the little plastic disc and a License to listen to the music. You in no way own the music. You cannot copy, perform or distribute any of that music. Period. Well, unless you buy a license.

Comments? Questions? Keep ‘em comin!

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November

Starting your own Music Publishing Company

Posted In: Band Management, Career Building, For Businesses, Marketing & Promotion, Uncategorized by claybutlermusic

If you write your own music, it’s a wise idea to start your own music publishing company. Although you can utilize another publisher when licensing your music, you can double your profit by acting as your own publisher. It’s easier than you might think.

Step 1. Select a Performer’s Rights Organization (PRO). The three major PRO’s in the US are Broadcast Music International (BMI); American Society of Composers, Authors, and Publishers (ASCAP); and Society of European Stage Authors and Composers (SESAC). These societies collect and distribute royalty payments for public performances of your music. Do a little research on each society’s websites to determine which one is right for you. You can join as a Writer, as a Publisher, or as both. It is wise to enroll as both, as it will double your potential profits from your music. Some have a nominal one-time fee, others do not.

Step 2. Once you have selected a PRO, decide on your publisher name. This should be a clever name which reflects your personality or theme of your music. If you have an existing production company or corporation, you can use this name. Most PRO’s require you to choose three names, from which they will register you with the first available name.

Step 3. After your publisher name has been cleared, check with your local city, county, or state government for any legal requirements if you intend to do business. Most likely, you will be required to procure a business license. This is also the time to determine which type of business you intend to run (sole proprietorship, partnership, corporation, etc.). In most cases, a sole proprietorship is sufficient.

Step 4. Open a “Doing Business As” account (D.B.A.) with your local bank, using your publisher name issued by your PRO. This will allow you to receive royalty payments generated by your PRO.

Step 5. Finally, register ALL songs you write or compose with your PRO. If your songs are broadcast or publicly performed, you can receive royalties. However, if your songs aren’t registered, you will likely not receive any royalties, as the PRO won’t associate the songs and performances to you as a writer or publisher.

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