Karaoke DJ (KJ’s) and DJ’s – Who pays ASCAP / BMI / SESAC

Performing rights organizations (PROS) are businesses designed to represent songwriters and publishers and their right to be compensated for having their music performed in public. The three US PROS are listed below along with estimated market shares.* When any public establishment plays music for the entertainment of patrons or spectators the artists whose music is being played are entitled to compensation. Owners of establishments playing the music are responsible even if they are hiring others to come in and play the music. The establishment collects the benefits of the music being played, thus they are responsible for the fees. Fees are based on type of music being played, how it is performed and the capacity of the facility where it is being played. There are minor exemptions for very small facilities playing music or television being broadcast on a station already paying fees, but the manner in which the broadcast is played is very limited and numerous criteria must be met.**
KJ’s or DJ’s can not pay fees for PROS. There is no program in place or contractual arrangement that allows such licensing.   Contracts have to be based on the facility and it’s size and all fees must come from the facility and match to entity listed on contracts. Satellite Radio, Piped in Music and Jukeboxes have many provider companies that have fees wrapped into their contracts. Establishments should verify this and check it in their agreements to assure they are covered.
ASCAP – the American Society of Composers, Authors and Publishers (ASCAP) is a membership association of more than 410,000 U.S. composers, songwriters, lyricists, and music publishers of every kind of music. About 50% of US Market Share*. –See Frequently Asked Questions for more information: http://ascap.com/licensing/licensingfaq.aspx
BMI – Broadcast Music, Inc. (BMI) collects license fees on behalf of songwriters, composers and music publishers and distributes them as royalties to those members whose works have been performed. About 45% of US Market Share* See Frequently Asked Questions for more information: http://www.bmi.com/faq
SESAC, Inc. – a performing rights organization with headquarters in Nashville and offices in New York, Los Angeles, Atlanta, Miami and London. About 5% of US Market Share.* *. –See Frequently Asked Questions for more information: http://www.sesac.com/Licensing/FAQsGeneral.aspx
*http://commdocs.house.gov/committees/judiciary/hju21140.000/hju21140_0f.htm
** http://ascap.com/licensing/licensingfaq.aspx

Running your Karaoke Business Legally and Ethically

Karaoke is about having fun and enjoying music. When you get in the business, it does not have requirements and safe-guards of many other businesses. It is a service business and unfortunately many that get into it do not have the characteristics of doing professional business and maintaining legality. The problems this created in our industry are much of the reason we formed the US Karaoke Alliance.

We recently received 2 new inquiries asking how to run a legal Karaoke Company and how to get a “Karaoke License”.

Let’s start with the easy answer to these questions.

There is no “Karaoke License”. There is no “DJ License”.

Laws vary from state to state. We are located in Arizona and here there is no state license, certification, or permit to run a DJ or Karaoke business. This makes it very difficult to ascertain who is legal or not legal in running their business.

The other half of the question and difficult part to ascertain is if a KJ is legal or not legal. Based on my experience most are not.

What makes you legal?

1. You need to have a CD or legally paid for download for every copy you have in use at any show. That means if you are on a download site and you purchase a copy of a song then you can only use it at one show. If you have one more show then you need to pay for another copy.
2. As stated above, you need to be aware of rules in your state. If the state requires you to have a business license then you need one. Your Secretary of State website for your state should have numbers to contact for how to register your trade name with your state and they should have information on licensing requirements. Most states do not require a license for a business that is service only with no materials used in services. There are rules for contractors and for service industries requiring materials being used in repairs. If you are selling CD’s or providing favors of any sort you can jeopardize your service only status and be subject to taxation on service which means you will need a federal, state, and local government tax ID. Regardless of any of these you should register your trade name and if you have any employees (W-2 Employees or 1099 Independant Contractors) then you should register for a Federal Employer Identification Number.
3. There is no requirement besides good business sense to carry Liability Insurance. If you are truly concerned in doing business the right way and wish to work for larger corporations then you need Liability Insurance. The National Association of Mobile Entertainers (NAME) provides insurance to entertainer under its group policy. USKA Members get discounted access to NAME Membership and access to its insurance policies.
4. Integrity and Customer Service – There is no legal obligation, but having the integrity and honesty to try to give good service and do the right thing for you and your customers is the key to staying in business…

In summary, you need 1 for 1 CD’s for music on your systems, you need to register your business name and check on local and state business permits and guidelines, and you should try to have liability insurance to protect your business. Remember it’s Karaoke and when you are performing make sure you and your patrons are having a good time! When you go back to home or your office, remember it is a business and you need to follow copyright laws to protect your business and your customers legally.