Letters continue to be sent to apartment operators and other businesses by performing rights organizations (PROs) SESAC, BMI and ASCAP, seeking licenses and threatening fines if no license is taken.
The letters allege that communities are airing music through speakers or televisions or hiring bands to play others’ copyrighted songs during social events without a public performance license. NAA/NMHC released guidance recently about whether certain activities constitute public performances and, thus, necessitate taking a license from these PROs.
“We have been haunted relentlessly by SESAC and ASCAP,” the Executive Vice President of one mid-sized apartment owner/manager based in the Southeast says. “We have sound systems throughout our clubhouses, fitness rooms and pools. We also have multiple televisions mounted throughout these areas. Those firms are checking us out via our Facebook page and our community websites to see what systems we have at our properties.
“Our plan will be to get with our audio/visual consultant and share the new information provided by NAA/NMHC. The consultant has been taken aback at how our industry had been targeted. Physically, we will be reducing the overall number of speakers and TVs, configuring equipment for more individualized private use, and potentially using broadcast sources which would exempt us from licensing or significantly narrowing the content that we allow to be broadcast.”
The attorney representing one Midwest apartment operator says discussing PROs is a “tricky” conversation when it comes to defining public performance.
“The PROs have never been belligerent,” the attorney describes. “They are persistent, but are not rude or threatening. We will continue to look into it, do our due diligence and find a way to address it.”
This Midwest operator is paying approximately $350 per community for the annual licenses it has it place.
The firm Winstead PC of Dallas assisted NAA/NMHC on this guidance, which seeks to provide clarity for our members regarding the licensing of music used at apartment communities.
As part of the guidance, Prof. David Nimmer was asked to review several fact scenarios that commonly occur at apartment communities. Prof. Nimmer, author of the seminal treatise in the field, “Nimmer on Copyright,” is regarded as a foremost expert on copyright law in the United States.
As explained in the memorandum, which is available online in the members-only portion of the NAA website, Prof. Nimmer reviewed the hypothetical scenarios, and based on U.S. statutes and case law, has determined that a music public performance license is not needed in the certain situations.
His conclusions are limited to the hypothetical facts set forth in Prof. Nimmer’s memorandum. They could prove valuable to companies seeking to avoid settlement or the renewal of any existing license agreements they might have with SESAC, BMI or ASCAP.
If you have questions, please contact Greg Brown or Jeff Tinker.
The information provided herein is not legal advice. This memorandum is designed to assist in understanding the issues presented by applying legal analysis to hypothetical facts, but it is not intended to address specific factual circumstances or business situations. For legal advice, consult your attorney.