A friend emailed me this article, calling it the “stupidest tax ever” and laments that it won’t be long before we’re doing that over here. But… don’t we already do that here? I seem to recall a big to-do a decade or so ago when fast food restaurants and the like all shifted from the radio to song collections. More recently, many are using satellite radio (which has fees of its own).

It does bring to light… what obligations should establishments have towards the playing of other people’s music? In some cases, like Burger King, it would seem that the obligation should be minimal. The contribution that the music plays to the atmosphere is minimal. This is particularly true if you’re dealing with the radio, wherein they don’t even get to control what music is being played except by station. Further, the royalties are already being paid, in a sense, by the advertisers whose ads were playing at the fast food joint. I would actually say that a willingness to play the radio, with commercials and all, is about as clear-cut an indicator as you’re going to get that they’re not making any money off the music.

A more middling example, though, would be Starbucks. Starbucks puts a much strong emphasis on atmosphere and that includes certain types of music over other music and also excludes the radio. People aren’t paying $4 for coffee to listen to listen to Crazy Sam sell cars at craaaaazy prices. Since their using the atmosphere to get people to buy overpaid coffee and that atmosphere involves music, it does not seem wholly unreasonable to me that the artists that are making them money on a regular basis get paid more than the $1 MP3 download.

A while back I twittered an article from the St Cloud Times that they have since taken offline. It deal with various venues ceasing to play live music because royalty-seekers were asking for a monthly fee lest they get slammed if one of their singers covers a song in their stable without permission. Such fees are typically paid by actual live music venues. It seems right to me that live music venues should pay for people that write the music that they’re paying people to perform. It gets uncomfortable in cases where live music is an occasional throw-in but not a central part of the business model. Rights-holders can easily make the counterpoint that if it’s not that important then they should be willing to do away with it. According to the article, some places are doing just that because while it may be bringing mild enjoyment to the coffee shop’s or sandwich shop’s clientele as well as the unpaid singers enjoying getting a stage, it’s not really bringing in money. This does not strike me as a situation where anyone wins.

The other issue in all of this is that while there are some good arguments that establishments should pay, the entire pay structure kind of smells. It’s not like somebody that does a Billy Joel or Benny Wobczek cover or the venue that makes money by having a guy play a Billy Joel or Benny Wobczek song on stage results in Billy Joel or Benny Wobczek getting paid for the use of the song he wrote. Instead, it is part of a monthly fee that goes to his royalty collection agency. They then decide how to dispense the money, using some sort of formula that basically makes sure that the Billy Joels get paid whether the songs are Billy Joel songs of Benny Wobczek (a name I made up) ones. In other words, it’s a system designed to assure that those that need it the least get the most. And honestly that’s going to be fair a good deal of the time, but when it comes to sandwich shops failing to play music so that Billy Joel can get just a little more coin… well, that’s just not something I’m excited about.

Of course, what’s the alternative? The alternative is to keep a catalog of what is being played. This is most easily done when people buy collections. I would guess that Starbucks probably pays its artists in accordance with how frequently their art is played (and the songwriters get paid in kind). With Satellite radio, it’s a big more tricky. Satellite radio has to pay the songwriters for the music they play, but I think they, too, pay ASCAP and the like in lump sums. However, they also have playlists that ASCAP can use to distribute the pay fairly. Anyhow, the places that play satellite radio let XM/Sirius take care of that for them. With live venues, though, there is far less accountability. While I’ve heard that it used to be that they paid something like 12-cents a song, the SCT article and what I’ve heard more recently is that it’s more the Joel/Wobczek lump sum arrangement. Absent a radio playlist, though, the degree of accounting and accountability required would be cost-prohibitive. A couple years ago, the rules for Internet Radio changed from lump sums to a song-by-song fee and the internet stations cried bloody murder because it made profitability that much harder.

What frustrates me more than a little about this is that here we have an industry where the number of people trying to break into it far exceeds the number of slots available. For every Billy Joel that has made it, there are ten Benny Wobczeks that would love for people to cover their songs with attribution and would consider it free advertising. The same goes for the radio. The radio has to pay songwriters and such to play their music… but there is also a long history of the record labels having to pay radio stations to play their music. Nowhere in this process is the realistic ability of songwriters to say “Hey, play my song. Hopefully that will get people to buy the CD which I will ge ta royalty from” or artists to say “Hopefully that will ge tpeople to come to my shows.” In other words, the system treats the Billy Joel’s and Benny Wobczeks the same which puts the latter at a competitive disadvantage.

The Creative Commons attempted to account for this sort of mismatching by giving people a host of royalty-free art that they can use under specific rules. So it’s not like it hasn’t been tried. But this gets down to the guts of the problem, which is that people are really not very adventurous when it comes to music. We prize the familiar. By doing so, we give all of the leverage to the big record labels and radio conglomerates and royalty collection agencies who can basically set our musical menu both in terms of content and price. If anything else is to change, that would have to change first. I’m not holding my breath.