Restaurateurs Beware: Michael Jackson Could Cost You $40,000

If you own a restaurant, beware Michael Jackson and R. Kelly. Play their music — or any other copyrighted songs — without theproper license and you can face fines of$10,000 per song.

Playing copyrighted music, even from a legally purchased source like a CD, in a public place constitutes a “public performance” of the music under copyright law. That means the restaurant owes money to the licensing companies, which in turn pay some percentage of the fee to the artist as royalties. BMI, ASCAP, and SESAC — the three major licensing companies — have scouts who check out restaurants and other venues to make sure their licensing is legitimate.

Fosters American Grille in Raleigh, N.C., played songs by Jackson and Kelly, and lost a lawsuit last month that cost $30,450 in fines and $10,700 in attorney's fees.

How likely is this to happen in San Francisco? We called some local restaurants to find out about their music policies. Benu's management didn't consider a music license when planning the opening, said administrative manager Carey Snowden. But near its debut, ASCAP asked for a licensing fee, and Benu complied. Snowden said she didn't think ASCAP visited the restaurant before sending a notice.

San Francisco restaurants we talked to use several legal options: 25 Lusk uses a DirecTV subscription for businesses that incorporates licensing fees, while Andalu uses satellite radio. RN74 uses the Playlist Generation, a music curation service that also wraps copyright fees into its service price. “It's the biggest hurdle restaurants come up against,” said RN74 Director of Partnerships Alex Bird. “People are used to getting music for free.” But free doesn't fly in a business setting.

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