Music Licensing Gangsters
Once there was only ASCAP (American Society of Composers, Authors, and Publishers) that boasted being the largest litigator shaking down restaurants and bars for playing copyrighted music, live, recorded, or broadcast. Then BMI (Broadcast Music, Inc.) came along to double the pain, then, in the last decade, SESAC (Society of European Stage Authors and Composers) added their fees. There is a FOURTH group that just showed up called AllTrack. So, you have four music license chasers that could each take $600 - $2,000 per year from your bottom line and there's no plans in the works to change that reality. While we can't help you get rid of these, there are ways to soften the blow. 1. Evaluate the value of live music to your establishment. Is entertainment/live music a key part of your brand? My restaurant is waterfront and boaters love to come by at least once a week in the afternoon to hear music and day-drink. Likewise, our competitors all have live music. You'll want to measure the benefit if that's the case for your store. Come up with a benchmark of average additional beverage and food sales that is owed in part to the live music. The best way to do this is to observe and tally guests' spend who are paying attention to the music and those who came to see the music, and estimate the sales on one day for your hottest performer and on one day for your performer who has the least number of followers. The average between those two is your number. Run a quick P+L for music; e.g. Total average sales less 45% for food & beverage costs, and labor (Note: Normally would be 55% COGS but we're accounting for the higher bar percentage of gross during live shows). Then subtract your average entertainer fee, usually around $200 in 2025. Thus, if you find music brings an average of $1,200, less $200 for the talent, less $540 for COGS, less $50 for the music licenses, music gives you potentially an extra $410 or 34% net profit to pay the bottom half of the P+L. In short, your first step is to use these calculations to evaluate whether you want to have live music at all.