Fred Stewart
04-09-2008, 11:43 PM
Newark nightspot sued for royalties by music giant. (http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20080409/NEWS/804090365) Click to review story and photos.
By SEAN O'SULLIVAN • The News Journal • April 9, 2008
WILMINGTON -- A national music industry group has filed a federal lawsuit against a Newark restaurant for having live bands and karaoke nights featuring copyrighted music without paying the proper licensing fees.
The federal civil action by the American Society of Composers, Authors and Publishers, on behalf of copyright owners, against Matilda's on South College Avenue near the University of Delaware's Bob Carpenter Center comes less than six months after a similar lawsuit was filed against the Rusty Rudder in Dewey Beach.
That lawsuit, filed by Broadcast Music Inc., was resolved late last year in an undisclosed settlement between the music giant and the bar owners.
The legal action against Matilda's, an Australian-themed bar and grill, is part of a coordinated national campaign by ASCAP to crack down on businesses that fail to get the proper license despite repeated warnings.
Matilda's owner Doug Smith said the suit caught him by surprise and he is hoping to quickly resolve it.
He said he recently bought the restaurant from Lee Buzalek, who was named in the lawsuit, and was unaware of what happened or the previous ownership's conversations with ASCAP.
Smith initially said he planned to pay whatever he had to pay and continue the effort to have live music there. He later reversed course after talking to attorneys.
"They have talked us out of doing music at all," he said.
Because of the size of the restaurant, the lack of a cover charge and the relatively small amount of business the live music was bringing in, Smith said getting a license was too expensive -- $1,400 to $1,900 each to both ASCAP and BMI. "We're better off not doing it."
He said he may seek a cheaper license, for about $800, that would allow karaoke or a live DJ on some nights.
Businesses that feature music -- recorded, live or performances that could include a DJ or karaoke -- are required to pay royalty fees to copyright owners through clearinghouses like BMI and ASCAP.
The fees are determined by factors including the size of the establishment and the use of the music. Live music -- which theoretically attracts more business -- carries a higher fee than recorded music.
When a business gets music through a commercial service such as DMX or Muzak, the fees are often included in the cost, said ASCAP Senior Vice President Vincent Candilora.
An establishment that hosts bands that play original music -- not registered with ASCAP or BMI -- would not have to pay the fee. But Candilora noted that most live bands play a few copyrighted cover tunes or the establishment ends up playing recorded, copyrighted music between sets.
In the Rusty Rudder's case, the bar was cited because of copyrighted music that was either played by bands or a DJ at the venue.
BMI has the rights to about 6.5 million musical works, while ASCAP claims ownership of about 8.5 million.
The lawsuit against Matilda's cites five copyrighted works that were "performed" in July 2007 and documented by an investigator for ASCAP, including songs by Eddie Vedder, Alicia Keys, Bon Jovi and Britney Spears.
Matilda's faces fines of $750 to $30,000 for each of the five infractions, according to court papers.
The same day court papers were filed against Matilda's, ASCAP filed similar lawsuits against 28 other establishments in 21 states.
"By filing these 29 actions at the same time, ASCAP is aiming to heighten awareness among music users and the public that it is a federal offense to perform copyrighted music without permission," said Candilora.
He added that 90 percent of the fees that ASCAP collects are paid back to the songwriters, composers and music publishers.
Lawsuits are only filed "as a last resort," Candilora said, usually after months of unsuccessful contacts with the establishment. Legal action is then necessary not only to be fair to song owners but to the 300,000 establishments that abide by the law and pay the fees, he said.
Despite the recent music lawsuits in Delaware, including a half-dozen in recent years by the Recording Industry of America against individuals who illegally downloaded songs from the Internet, New York entertainment attorney Steve Gordon said he does not think it is part of a coordinated industrywide effort.
"That is what they do for a living," he said of ASCAP. "They have been doing that for 100 years now. I don't think it is anything new."
A legal expert with Billboard magazine agreed.
"Simply business as usual, suing people and companies that do not properly license or purchase copyrighted music," said senior correspondent Susan Butler in an e-mail.
At the same time, Gordon, author of "The Future of the Music Business," said it is likely ASCAP and BMI have more work than ever because there are more people attempting to break into live music -- with more bands providing performances for more venues than ever before.
"There are more bands because it is easier to record music now. It is more affordable and more appealing, because of things like MySpace, to have a band and get music out there," he said.
So one result is new venues that are unaware -- or unwilling -- to abide by the rules.
Contact Sean O'Sullivan at 324-2777 or sosullivan@delawareonline.com
By SEAN O'SULLIVAN • The News Journal • April 9, 2008
WILMINGTON -- A national music industry group has filed a federal lawsuit against a Newark restaurant for having live bands and karaoke nights featuring copyrighted music without paying the proper licensing fees.
The federal civil action by the American Society of Composers, Authors and Publishers, on behalf of copyright owners, against Matilda's on South College Avenue near the University of Delaware's Bob Carpenter Center comes less than six months after a similar lawsuit was filed against the Rusty Rudder in Dewey Beach.
That lawsuit, filed by Broadcast Music Inc., was resolved late last year in an undisclosed settlement between the music giant and the bar owners.
The legal action against Matilda's, an Australian-themed bar and grill, is part of a coordinated national campaign by ASCAP to crack down on businesses that fail to get the proper license despite repeated warnings.
Matilda's owner Doug Smith said the suit caught him by surprise and he is hoping to quickly resolve it.
He said he recently bought the restaurant from Lee Buzalek, who was named in the lawsuit, and was unaware of what happened or the previous ownership's conversations with ASCAP.
Smith initially said he planned to pay whatever he had to pay and continue the effort to have live music there. He later reversed course after talking to attorneys.
"They have talked us out of doing music at all," he said.
Because of the size of the restaurant, the lack of a cover charge and the relatively small amount of business the live music was bringing in, Smith said getting a license was too expensive -- $1,400 to $1,900 each to both ASCAP and BMI. "We're better off not doing it."
He said he may seek a cheaper license, for about $800, that would allow karaoke or a live DJ on some nights.
Businesses that feature music -- recorded, live or performances that could include a DJ or karaoke -- are required to pay royalty fees to copyright owners through clearinghouses like BMI and ASCAP.
The fees are determined by factors including the size of the establishment and the use of the music. Live music -- which theoretically attracts more business -- carries a higher fee than recorded music.
When a business gets music through a commercial service such as DMX or Muzak, the fees are often included in the cost, said ASCAP Senior Vice President Vincent Candilora.
An establishment that hosts bands that play original music -- not registered with ASCAP or BMI -- would not have to pay the fee. But Candilora noted that most live bands play a few copyrighted cover tunes or the establishment ends up playing recorded, copyrighted music between sets.
In the Rusty Rudder's case, the bar was cited because of copyrighted music that was either played by bands or a DJ at the venue.
BMI has the rights to about 6.5 million musical works, while ASCAP claims ownership of about 8.5 million.
The lawsuit against Matilda's cites five copyrighted works that were "performed" in July 2007 and documented by an investigator for ASCAP, including songs by Eddie Vedder, Alicia Keys, Bon Jovi and Britney Spears.
Matilda's faces fines of $750 to $30,000 for each of the five infractions, according to court papers.
The same day court papers were filed against Matilda's, ASCAP filed similar lawsuits against 28 other establishments in 21 states.
"By filing these 29 actions at the same time, ASCAP is aiming to heighten awareness among music users and the public that it is a federal offense to perform copyrighted music without permission," said Candilora.
He added that 90 percent of the fees that ASCAP collects are paid back to the songwriters, composers and music publishers.
Lawsuits are only filed "as a last resort," Candilora said, usually after months of unsuccessful contacts with the establishment. Legal action is then necessary not only to be fair to song owners but to the 300,000 establishments that abide by the law and pay the fees, he said.
Despite the recent music lawsuits in Delaware, including a half-dozen in recent years by the Recording Industry of America against individuals who illegally downloaded songs from the Internet, New York entertainment attorney Steve Gordon said he does not think it is part of a coordinated industrywide effort.
"That is what they do for a living," he said of ASCAP. "They have been doing that for 100 years now. I don't think it is anything new."
A legal expert with Billboard magazine agreed.
"Simply business as usual, suing people and companies that do not properly license or purchase copyrighted music," said senior correspondent Susan Butler in an e-mail.
At the same time, Gordon, author of "The Future of the Music Business," said it is likely ASCAP and BMI have more work than ever because there are more people attempting to break into live music -- with more bands providing performances for more venues than ever before.
"There are more bands because it is easier to record music now. It is more affordable and more appealing, because of things like MySpace, to have a band and get music out there," he said.
So one result is new venues that are unaware -- or unwilling -- to abide by the rules.
Contact Sean O'Sullivan at 324-2777 or sosullivan@delawareonline.com