I am not particularly hopeful that anyone with decision making authority will read this, or that even if someone does, that they will listen.  But I am taking an hour of my time to write in hopes I am wrong.  I am doing so because I care.  I particularly hope that some composers, artists and other music copyright owners will read this, learn what is really going on, and put pressure on you to make the changes that need to be made to protect their best interests in today's world.
 
I hold a Ph.D. in business and taught business at a major business school at a respected university for many years.  So it would be fair to say I know something about business.  I taught copyright and patent law in my courses, so it would also be fair to say I know something about intellectual property rights.
 
I am also a musician.  I am both a performer and a songwriter.  I have been involved in music all my life, at various times as an amateur, a paraprofessional, a professional, and a teacher.
 
I am also an entrepreneur who used to own a tiny restaurant.  So I also know something of the struggle it is to try to squeeze a tiny profit margin from a razor thin balancing act between revenue minus payroll, food cost, rent, other expenses, and taxes.  As a public service to the high school and college kids in my town, I used to allow them to occasionally perform live music in my restaurant.  Much of it was original songs.  Some was covers.  It was not a profit driven decision.  My motivation was to provide a place for young musicians to play.
 
Then I started receiving mail from one of the three of your organizations.  I read your letters and understood what you were saying.  However, when I calculated the fee you were demanding, I found it to be outrageous.  Then I started receiving phone calls from your “representatives” (who acted more like scumbag debt collection agents.)  Three times a week.  I started talking to other restaurants and small venues and everyone was telling me that BMI/ASCAP/SESAC were also harassing them and most of them were going to stop having live music rather than submit to the exorbitant demands.  They simply could not afford the fees and they were tired of the mafia-style intimidation tactics your salespeople used.  I started talking to my young amateur musicians, who informed me that they were finding fewer and fewer places to play.
 
I found a forum on Linked-In’s Professional Musician Network group.  The title of the thread was, “BMI and ASCAP threatening small venues”.  The instigator of the thread wrote, “I got on the phone today for two hours calling to catch up on booking our band, Most of the venues said that they had a call (in the last month or so) asking if they had live music, if the answer was "yes" the caller (who was from BMI) asked what their BMI contract number was. If they didn’t have one, they were threatened that if they had another live band they would be sued for $10,000.”
 
None of this, I’m sure, is news to you.  But sadly, you obviously don’t care about any of it.  You think you are justified in murdering the amateur live music scene with your legalized extortion that you run more like a “protection money racket” than a legitimate business.  Since it is clear that all you care about is money, let me get to my point.  I have some suggestions that, if you will implement, you will make MORE MONEY for your copyright owners.
 
Your business model is wrong.  Your pricing structure is wrong.  Your marketing structure and philosophy are wrong.  As a result, many small venues have discontinued having live music, and others who never had live music won’t even consider it.  That isn’t good for anybody.  Not for the public, not for the young musicians, not for the venue owners, and especially not for the copyright owners whose interests you allegedly represent.  It is a travesty.
 
Your clients (the composers and copyright owners), need to understand what you are doing.  Your business practices are not helping them, they are hurting them.  Suppose a restaurant isn’t paying you.  Is the copyright owner hurt by this?  No.  Here’s why: anytime the restaurant doesn’t have live music, the PA background music is turned on.  And when that background music is turned off for the live performance, you are STILL getting paid for that revenue stream.  So the bottom line is, during live music performances, even if the venue pays you nothing for the live music, you are still getting paid your normal fee for the recorded music.  Furthermore, I can’t tell you the number of times I’ve performed a cover song in small venue, and a customer has come up to me and asked what it was and I told them the name of the song and the artist and they said they were going to buy it.  You can’t convince me that the copyright owner didn’t benefit from me playing that song.  (This is especially true for older songs that get introduced to a new generation through live performance, and also for songs by unknown, independent singer/songwriters!)  On the other hand, if the venue does pay for a live music contract with you, you are extorting out of the venue a DOUBLE charge.
 
But let’s forget about all that and pretend that the copyright owner is harmed by live performance of their songs.  If the restaurant refuses to bow to your outrageous demands and threats, and instead chooses to discontinue having live music, are the copyright owners any wealthier?  No, they will still get no incremental revenue from the live performance, because there is no longer a live performance.  So are you really benefiting your clients?  NO, you are not.
 
On the other hand, if BMI/ASCAP/SESAC were to charge a reasonable, fair fee for live music performances that makes business sense for small venue owners, that would benefit your clients.  Then copyright owners would actually get some money.

It isn't that venues don't want to pay and want to rip off composers.  They just can’t afford your outrageous fees, and they get sick of your outrageous threats.  What, then,  is a reasonable, fair fee?  A reasonable, fair fee would be a fee that small venues CAN AFFORD and makes BUSINESS SENSE because it is based on ACTUAL USAGE of the songs and ACTUAL LISTENING to the songs by ACTUAL CUSTOMERS of the restaurant.  If you would do this, most venues would voluntarily pay the fee without your strongarm tactics.  Sadly, that’s not what you want, and that's why composers make less money than they otherwise could.
 
I'm not arguing against paying for music. I'm against blanket fees that are unfair to small venues. Out of 60 hours my restaurant was open per week, I had live music 2 to 4 of those hours. Suppose that 50% of the music played during those 2-4 hours was original songs composed by the performers, that BMI/ASCAP/SEC had no rights to. BMI/ASCAP/SESAC wanted me to pay for the WHOLE 2-4 hours rather than the approximately 1-2 hours per week that "covers" of copyrighted music were being played. During those 1-2 hours, suppose the average occupancy (customers in seats) was approximately 40% of the fire code legal maximum seating capacity. BMI/ASCAP/SESAC wanted me to pay for the number of seats, not the number of people actually there. Finally, all three of your organizations wanted me to pay a fee, but during those 1-2 hours only one of the companies represented each song.  So in effect, a triple fee was being charged for each song; one legitimate, and two completely a rip off scam.  As a result, the vast majority of your fees would be for songs that are not heard by customers because the seats are empty, or for hours that live music isn't even being played, or that that two of the three of your organizations don't have rights to.  And then you wonder why venue owners quit having live music.  You are a bunch of business morons and rip-off artists.
 
Remember Napster and all the millions of illegal downloads? Why did most people stop downloading illegally and start downloading legally?  What stopped the torrent (no pun intended) of illegal activity?  Was it the lawsuits that scared people away?  NO!!!!  When Napster was shut down, a dozen others popped up.  I suppose there are still some out there, but they are not as widely used as Napster was back in the day.  Ask yourself "Why?"  The answer is that iTunes made it EASY and AFFORDABLE and FAIR to be legal.  Easy, affordable, and fair; that’s what makes good business in today’s world.  Most people want to be honest.  If companies make it easy and affordable and fair to be honest, they will happily do what is right.

If you would do likewise for small clubs and restaurants, most of them would comply.  First, make it EASY.  iTunes is one stop shopping.  So take a hint and get ASCAP, BMI, and SESAC to either merge, or form a joint venture, or to work with a third party (like iTunes), to get one stop shopping.  One entity takes care of everything.  Nobody wants to work with three vendors to buy one thing.  Second, work out a pricing structure that is both AFFORDABLE and FAIR, so that people are paying a small fee for what they actually use instead of a large inflated fee for a bunch of stuff they shouldn't have to pay for (i.e. empty seats, uncopyrighted original songs, nights when live music isn't being played, fees to all three of you for a song that only belongs to one of you, etc.)  Let us get online and send to a third party a list of the songs that were performed, and pay the fee online with a click of a button.  Then distribute the fee to the correct copyright owner, no matter which of the three of you that copyright owner chooses to be affiliated with.  Not based on samples or averages.  Based on ACTUAL songs performed.  And not a triple charge for one song, two of which are completely bogus.
 
I know you don’t care about young musicians, nor small struggling businesses.  But it’s not just young musicians and small venues that are getting screwed by your current system.  Your own clients/members are also not well served.  Unless you charge and distribute money based on songs ACTUALLY played, some clients are getting rich at the expense of other clients.  Your philosophy (that you sample what’s played nationwide and base your distributions to clients on a mathematical model) is sheer bunk.  How did you know what was being played in my restaurant?  You didn’t have a clue.  What if we ONLY played 1960s music, and you were distributing some of our fee to Maroon Five and Sia?  Is that honest?  Is that fair?  Is that taking care of your clients?  No way; it is dishonest.  It is particularly unfair to young, new copyright owners whose songs are being played in a venue but your stupid system hasn’t figured that out yet.  Your business model was always moronic, but now that technology has improved, it’s downright dishonest.
 
Perhaps an analogy might help: Can you imagine VISA, Mastercard, Discover, and AmEx each wanting to charge a flat fee to every business that accepts credit cards?  A large, arbitrary, flat fee per year, based on the estimated number of customers that MIGHT come into a business in a year, (based on the fire code maximum occupancy of the building, not on actual customers who actually buy goods and services at the business), who MIGHT use a credit card (not based on actual credit card swipes… because the credit card companies want to get paid even when some customers write checks or pay with cash)?  How well do you think that would go over?  Don’t you think there might be an outcry that would be heard all the way to Congress and the Supreme Court?
 
Or what if those three companies then distributed the payments paid by customers to the retailers based on estimates and samples and guesses about how much money every business should receive instead of actual specific products and services sold by each business?  How fair would that be, and how long would it take for a class action lawsuit to spring up?
 
How long do you think a pizza restaurant would last if it decided to charge tell everyone in town that if they eat any pizza they have to pay that restaurant a large, flat, annual fee per year that is good for a weekly pizza, even if they only eat one pizza a couple of times per year? Especially if 90% of the charge is for pizzas the store doesn't even make, but are made by other pizza stores or that the customer makes at home and thus the pizza store has no legal rights to sell?  And what if 60% of the flat fee is for people in their family who don't eat pizza but who arguably theoretically could eat pizza?  I think a lot of families would choose to not have pizza, don’t you?  Especially if the pizza restaurant hired a team of people to call and harass them 3 times a week and threatened to sue them?  That is precisely what BMI/ASCAP/SESAC are doing to small venues.  Do you honestly think this is a good business model?  Are you kidding?  How can you possibly justify this?  It is amazing that you haven’t had your butts served up on a silver platter by a class action lawsuit in all these years.  Your business practices are immoral, unethical, and unconstitutional.

By the way, after being harassed to death, I finally purchased a contract with the organization that had been harassing me.  However, within weeks of when I had done this, another of the three of you started harassing me.  I told the salesperson, “I already have a contract with one of your competitors.”  The salesperson said, “That contract is only for certain songs.  You have to buy our contract also, for the songs we represent.”  I said, “I understand that.  So please send me a list of the artists and songs you represent, so I can make an informed decision on whether or not I want to buy your product.”  “We can’t do that.”  “Are you saying you want me to buy something from you but won’t tell me what it is?  I’ll tell you what.  Just send me a list of all the songs you represent and I’ll make sure we don’t allow our musicians to play any of those songs.”  You should have heard the silence on the other end of the phone.  Finally, “Uh, uh, we can’t do that.”  “Why not?”  “We don’t have that list.”  “Then how do you distribute money to the copyright owners if you don’t know who they are?”  At that point, the salesperson threatened me with legal action.  Finally, I said, “So you want me to pay you for the use of something of yours that you THINK I MIGHT be using, but you can’t even tell me what it is?  That would be like someone coming to me and saying ‘I want you to pay me because you are driving a rental car and we own a lot of rental cars’ and me saying, ‘How do you know I’m driving one of your cars?  Maybe the car I’m driving is owned by someone else.’  And you saying, ‘Well you MIGHT be driving one of our cars, so you have to pay us or we’ll sue you.’  And me saying, ‘Just send me a list of the VIN numbers of your cars and I’ll be sure to not drive one of them.’ And you saying, ‘We can’t do that.’ ”  If it weren’t so stupid, it would have been laughable.
 
Your inability and/or unwillingness to provide a list of songs you represent is absurd.  And don’t lie that you can’t do it.  That’s complete bull crap, and you know it.  You could do it online, easily, and update it every single day.  You just don’t want to do it.  It is an intentional strategy on your part to maintain your mafia-like protection racket business model, so that the thee of you can continue to conspire to price fix and triple charge and intimidate and threaten.  You want venues to pay you but you won’t even tell them what you’re selling and what they are buying.  You want them to pay all three of you and not allow them to make a choice of which of the three has the best mix of songs and artists that they want.  That isn’t business, it’s merely racketeering and blackmail.  And I wish somebody would sue you, because you would lose in court.
 
Your so-called "representatives" are low life commissioned salespeople who act like mafia enforcers and collection agents.  They are not musicians, and they are not trying to help musicians; they are only lining their own pockets.  If your clients knew how much of their fees you skim off the top to pay those scumbags before they receive anything, they’d fire you.
 
When I owned a restaurant, I didn’t hire professional musicians.  I had no budget to pay musicians, nor did I have a cover charge. The musicians played for free, or for small tips. It was mostly high school and college students who just wanted a place to play.  BMI/ASCAP/SESAC didn’t care. You wanted to charge me for doing these kids a service.  Most of them played nearly all originals.  BMI/ASCAP/SESAC didn’t care. You said I had to pay the full license fee for the whole year "because they might get a request."  I only had live music a few nights per month. BMI/ASCAP/SESAC didn’t care.  You said I had to pay a ridiculous license fee, even if we were to have live music just a few nights per year.  When tough economic times reduced my customer base, BMI/ASCAP/SESAC didn’t care.  Your fees were based on the legal number of seats in the venue according to fire code, regardless of how many customers actually showed up.  You said I had to pay that full license fee for all the seats even though my musicians played to an almost empty restaurant on some nights.  I respect intellectual property rights, but this was absolutely ridiculous.
 
You can rationalize it all you want, but it doesn't change the fact that the fee you are demanding is more than small venues can afford.  When I sold my restaurant, the first thing the new owner did was discontinue live music.  Nor does it change the fact that most of that fee does not go to the correct copyright owners, and a big part of it doesn’t even go to any copyright owner but instead to your employees.
 
When will BMI, ASCAP and SESAC wake up and move into the 21st century?  Take a clue from Square and iTunes.  Figure out a way to make your fees easy, affordable, and fair, based on specific actual usage.  Quit doing one size fits all, and use technology to make it easy for a venue to pay a small, reasonable fee per song that you actually have the rights to, that is actually played, for actual people in actual seats that actually hear it on a specific night, and make it convenient, with a one stop clearinghouse for all three of your organizations.  Start distributing revenues to your clients based on how many times their songs are actually played, not on some inaccurate model based on a bogus sample, so the money goes to the correct copyright holders instead of estimating how to divide up the pie.  Fire all your commissioned salespeople and instead do a marketing campaign aimed at helping venue owners do what’s right.  I believe your revenues will go up, your expenses will go down, your clients will make more money, and small venues won’t quit having live music.  In fact, many new venues will open up to live music.  And young amateur musicians (who might someday become your clients) might still be able to play in public without the venue owner either being exploited or living in fear of a lawsuit. Make it EASY, AFFORDABLE and FAIR for venues of all sizes, and for all copyright owners, and everyone will win.
 
Right now, copyright owners, venues, venue customers, and musicians are all victims of your antiquated and immoral business model.  The only people who win are your abusive collection agents.  The people hurt the most are the young performers, the next generation of musicians, who have fewer and fewer opportunities to perform in public because the venues keep drying up.  Your war on venues is really a war on kids. 

Irv Nelson