Why Small Business Owners Need Transparency in Music Licensing

Wisconsin Bar Owner Kelly Vecitis Shares his Story with the MIC Coalition

For over 38 years, my family has proudly operated six restaurants and bars in Wisconsin. According to the Tavern League of Wisconsin (TLW), more than 161,000 jobs are generated by the alcohol industry in our state with pre-pandemic figures close to $3.2 billion in total annual wages paid, and taxes totaling more than $2.6 billion. We are an important part of the Wisconsin state economy but what our fellow Wisconsinites and elected leaders might be surprised to learn is — that one of our biggest operating headaches has nothing to do with taxes and regulations, it’s the music we play in our flagship venue — Kelly’s Bleachers Wind Lake.

Simply put, when we want to play music or hire a local musician, we need to buy licenses from performing rights organizations (PROs) that offer blanket licenses covering millions of songs within their respective catalogs. And, while we are happy to purchase these licenses and pay PROs what we reasonably owe based upon our use of music, we often end up paying for access to more songs that we need or paying over 100% of the value of the musical works we use. Sounds unfair, right? Well, that’s because it is.

Often, a PRO is unwilling to disclose the exact works included within their respective catalog which forces businesses such as mine to obtain licenses from multiple PROs to ensure a given song we want to use has been properly licensed. To make matters worse, after securing a license from all the major PROs, it’s not uncommon to discover that the market share claimed to be controlled by the individual PROs adds up to more than 100% of the entire industry. Each licensee must pay each PRO (currently four) for their entire catalog — even if they mostly own rights to music we will never play — and we end up paying a similar amount to each even just two own 80% of musical works.

As a venue owner, I try to cooperate with the PROs, but that spirit is a one-way street. For example, I have suggested that I would be willing to only pay for the 100 songs my venue would like to play as opposed to the thousands and thousands each PRO owns. They say that’s not possible because their catalogs are too complex and unwieldy. Therefore, I am forced to overpay.

I have asked a PRO, can you give me a list of songs in your catalog so I don’t play them and I won’t have to pay for something I don’t play? Not possible. I say, my venue was closed for 4 months during COVID and we didn’t play any live music. Can I get a refund or credit? Their response — how about a discount? I still had to pay even though we didn’t plan any music for 4 months.

Can you see how I get to feeling like this is an “unfair shakedown?”

A lack of transparency has been a longstanding problem within the industry. The first PRO was established in 1914 — over a century ago — and the music ecosystem continues to evolve in its complexity as new technologies transform the music marketplace. The lack of transparency provides PROs with an unfair advantage, and it forces venues and other small businesses to purchase the rights to more works than otherwise necessary while often requiring other music licensees to overpay for the rights acquired or risk copyright infringement lawsuits and statutory damages.

At Kelly’s Bleachers Wind Lake, we have done everything from small showers and dinners to huge benefits and weddings. I have six venues, but only one plays music and I know this shouldn’t be so hard to figure out. If you own a country-themed bar, you will probably never play heavy metal — so why pay rights for songs you will never play? That doesn’t seem like the American way to me.

We need to make it easier on family-owned businesses like mine by leveling the playing field. What can policymakers do to help improve the existing music licensing landscape? If you are an elected official or even a concerned citizen, I ask that you reach out to some of the bars, restaurants and other venues located in your community to hear about their experience purchasing licenses and work with us on efforts to promote increased transparency within the music industry.

Kelly Vecitis is the owner of Kelly’s Bleachers Wind Lake in Wind Lake, Wisconsin.