Transparency in Music Licensing and What it Means for Breweries

The Brewers Association joined other members of the Music, Innovation, Consumers (MIC) Coalition, a partnership of associations committed to a transparent and sustainable music licensing system, in announcing its support for bipartisan legislation. The Transparency in Music Licensing and Ownership Act (HR 3350) introduced by Representative Jim Sensenbrenner (R-WI) and cosponsored by Representatives Suzan DelBene (D-WA), Blake Farenthold (R-TX), and Steve Chabot (R-OH) would establish a searchable, digital database of historical and current copyright ownership and licensing information.

The Transparency in Music Licensing and Ownership Act is a major step forward in creating a music licensing system that is open and accessible to those who own and license music. The proposed legislation would create a public database that provides all stakeholders in the music marketplace with access to authoritative and fully searchable records of music ownership and licensing information, free of charge to users and updated in a timely manner.

Over the past decade, we have seen massive growth in new brewery openings (there are currently more than 5,600 operating breweries in the United States). A significant number of those breweries have taprooms and sell beer at their breweries, with around 35 percent of craft’s volume coming via on-premises channels. The smallest breweries and brewpubs rely heavily on on-premises sales: brewpubs that produce less than 1,000 barrels have production that is 95 percent draught, while production brewers that produce less than 1,000 barrels are on average 89 percent draught.

Many of these breweries would like to play music or host live musical acts in their brewpubs and taprooms. If passed, this legislation will bring transparency to music licensing for Brewers Association members, giving them the ability to purchase the music licenses they want while ensuring that they are not violating any copyright laws and are fully compensating hardworking artists and songwriters. As a result of increased transparency, under the new law brewery owners would be able to choose the licenses that best fit their music needs.

Breweries who play music will still be required to purchase the appropriate licenses from performing rights organizations (PROs) like ASCAP, BMI, GMR, and SESAC. Currently, brewery operators are in the dark as to which copyright ownership information is connected with which PRO, so must pay all PROs whether or not they play music whose rights are managed by a specific PRO. As a result, many breweries may choose to stop playing music altogether, or in some cases cancel live performances to protect themselves from potential infringement. The database that would result from the Transparency in Music Licensing and Ownership Act will allow business owners to know which music is covered depending on which licenses they purchase.

Under the new law, if the database is used by a brewery in good faith and an infringement occurs as a result of copyright ownership information missing from the database, the copyright owner is limited to seeking “actual” damages and injunctive relief as opposed to “statutory” damages. Statutory damages are set by courts and can total up to $150,000 per infringement. Actual damages are the actual cost of licensing that song according to a PRO’s licensing agreement.

Example:

Current Law: Brewery X has a license with only one of the PROs. The brewery hires a live musician who covers a song that is licensed by a different PRO that the brewery is not covered by. Brewery X is now open to statutory and actual damages.

Under HR 3350: Brewery X has a license with only one of the PROs. The brewery hires a live musician who covers a song that is licensed by a different PRO that the brewery is not licensed by. Brewery X is still open to statutory and actual damages unless the copyright information is missing from the database. If the information is not available in the database, and Brewery X acted in good faith, they would be open to actual damages. Existing copyright law addresses the liability an artist faces if he or she does not follow the proper licensing protocol before distributing a cover of a song.

The Brewers Association looks forward to working with members of Congress and the MIC Coalition to ensure that breweries who want to support musicians by hosting live shows or playing music at their breweries can do so with the knowledge that they are complying with music licensing and copyright laws. The Transparency in Music Licensing and Ownership Act will give them the tools necessary to do just that. If you have any questions, please feel free to contact Brewers Association Federal Affairs Manager Katie Marisic.