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BMI/ASCAP/SESAC Legal Extortion Scam

Monday, August 23, 2010 17:08
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Source: FSK’s Guide to Reality

“Legal extortion” occurs when someone uses the threat of a lawsuit, or an actual lawsuit, to extort money. In a typical legal extortion racket, most victims settle without a trial. The occasional expensive highly-publicized lawsuit victory scares everyone else into settling.

The State does not need to jail everyone, to collect taxation/tribute/extortion money. A mafia extortion racket doesn’t physically assault everyone. A legal extortion racket doesn’t sue everyone. The occasional violence keeps the other slaves in line.

If I sent a letter saying “Pay me $1k or I break your legs!”, you’d agree that I’m a criminal. If a lawyer sends a letter saying “Pay me $1k or I sue you!”, the net effect is the same, but that’s presumed legal.

The legal system is violence and threat of violence. If I wrote a letter threatening to steal your property, that’s a crime. If a lawyer writes a threat letter demanding settlement, that’s presumed legal. If a State judge writes a court summons, you have to respond or people with guns will come to kidnap you or take away your property.

Here’s how the BMI legal extortion racket works. BMI owns the performance rights for most mainstream media songs. (There are two other music licensing extortion organizations, ASCAP and SESAC. I refer to BMI in this article for consistency, but what I write applies to all 3 licensing extortion organizations. A bar/restaurant/theater/venue typically must sign an extortion contract with all 3. You don’t know a priori which song’s copyright is enforced by which licensing extortion cartel. There are some smaller copyright licensing organization that own fewer songs, but still go around extorting from people.) The BMI licensing fee goes to songwriters, and not the people who sing the song. The payout is based on a survey of top-earning performers and top-rated radio stations, which creates a bias in favor of hit songs.

If you don’t have a hit song, and register with BMI, you probably won’t make anything. Once you register your song with BMI, I’m not sure if you can unregister. They make it hard to unregister. You can do it once a year or once every five years.

BMI extortion reps read the local newspapers, looking for bars and restaurants that offer music. The rep goes to the bar/restaurant/theater, pretending to be a customer. The rep writes down every song played. If there’s an infringing song, you get a legal threat letter from BMI.

BMI extortionists/salesmen complain “We have to spend a lot of effort educating our ‘customers’, making them realize they have an obligation to pay us or we’ll sue them and ruin them. Some of our potential customers/victims mistakenly think it’s all one big scam! There’s a serious lack of awareness of copy licensing extortion.” If the average person knew about the BMI licensing extortion racket, they would say “WTF? This is legal extortion!” By keeping it a secret that only bar/restaurant/venue owners know, that facilitates the extortion. BMI isn’t widely advertised, because people would be outraged. Imagine if BMI took out a Super Bowl ad saying “If you own a bar and have a live band, pay us or we’ll sue you!”

Government *IS* extortion. It isn’t surprising that people abuse government to extort. Lobbyists get favorable laws, and then use those laws to extort. Part of the profits of legal extortion is spent on further lobbying. Legal extortion piggybacks on the State extortion racket. BMI and the mainstream media/music cartel spent a lot of money lobbying for favorable laws and legal precedents.

The mainstream media cartel can’t criticize the BMI extortion racket, because the mainstream media cartel also is a huge beneficiary of corrupt copyright law. Current copyright law is a mess for non-insiders. It’s practically impossible to do anything, without infringing on someone’s copyright. Having copyright a legal quagmire benefits insiders, because only they can afford to hire lawyers and get permission to do things. If you make a song that sort of sounds like a copyrighted song, you may be sued.

There’s one Anonymous UK commenter that complains about legal extortion a lot. Outside the USA, there are legal extortion organizations similar to BMI. In the UK, do you have a legal obligation to respond to a threat letter from a lawyer? In the USA, you can usually ignore a threat letter from a lawyer, but not an actual lawsuit. However, the judge might hold it against you in the trial? In the trial, the plaintiffs say “But we tried settling! Look at how many threat letters we sent him first!”

Do you get a jury for copyright infringement trials? Is it a bench trial with just a judge? It should be a jury trial, because then the defendant should argue “Hey! This is legal extortion!” The defendant in a copyright infringement extortion trial should *ALWAYS* demand a jury. In a “evil corporate cartel vs. individual” trial, the individual should be able to get sympathy from the jury. However, BMI will usually chose an song owned by an individual, rather than a corporation, when suing, to give the illusion of “We’re looking out for the artist!”.

On one website, I read that a typical contract with a label says that the label gets 50% of the performance revenue and the writer gets 50% of the revenue. Right of the top, 50% of BMI’s revenue goes to corporate cartels. Does an “unrecouped” band still get the performance revenue?

A “legal extortion” racket relies on the fact that most victims settle without trial. Otherwise, the legal system would be flooded with lots of cases. If BMI thugs had to individually sue every victim, there would be no way that the legal system could handle all those cases.

The BMI reps are an example of “Economic Secret Police”. They are paid on commission, as a % of tribute/extortion money collected. This gives the BMI rep an incentive to act excessively aggressively. I wonder if the BMI reps lie, saying you played a copyrighted song when you actually didn’t?

Some of the BMI reps are big muscular men. That implies the threat of physical violence.

The BMI rep will keep harassing you and your employees, unless you sign an extortion contract with them. They act exactly like a mafia gang extracting extortion money.

As I said before, “intellectual property” is not property. Copying an idea or song is not the same as stealing a car. “Intellectual property” laws are written in a way that specifically encourages legal extortion. This is the result of lobbying by insiders. Most “intellectual property” is owned by corporate cartels. A pro-State troll says “Copyright protects the little guy!” The actual implementation of copyright law is profit/extortion for insiders.

“Intellectual property” should really be called “intellectual theft”. The term “intellectual property” sets the debate in the wrong frame, because it isn’t really property at all. What’s a better term? How about “intellectual non-property”? “Intellectual anti-property”? “Intellectual un-property”? This page called it “intellectual pooperty”.

A “legal extortion” lawsuit is always an insider vs. a non-insider. The BMI lawyer claims to be “acting for the poor songwriter”. Most of the extortion money goes to corporate cartels and the writers of megahit songs. According to the licensing distribution formula, the megahit songs get most of the revenue. Also, the performance rights to many songs are owned by corporate cartels, and not the original songwriter.

Is a hit song popular because it’s good? Or, is it popular because the media cartel promoted it?

For copyrighted songs, how many performance copyrights are owned by individuals? How many performance copyrights are owned by large corporate cartels?

The BMI extortionist sends you a form that’s very similar to an IRS 1040 form. Here’s one example. You say how big your restaurant/bar/business is and how much money you make. Then, BMI determines the licensing fee. A typical licensing fee is $1000/year. You might say “So what, $1000?”, but it’s still a tax. There’s also a “minimum fee” for smaller business that don’t play music that often. The BMI extortion fee is a regressive tax on small businesses. Larger businesses and chains get more favorable discounts.

If you sign an extortion contract with BMI, you’ll probably have to also sign an extortion contract with ASCAP and BMI. They probably share a list of customers/victims.

The BMI schedule is a type of regressive tax. If you have live music infrequently, or if you have a small restaurant/bar, then you pay a disproportionately larger extortion fee. For example, notice the “annual fee minimum” of $332. There’s also a “annual fee maximum”. Madison Square Garden pays a *MUCH* smaller fee per seat than a small bar/restaurant/theater.

One defect in copyright law is “statutory damages”. The copyright owner does not need to prove economic loss. The copyright owner merely needs to prove that infringement occurred. “Statutory damages” is an important concept of corrupt State law.

“Statutory damages” criminalize things that have no actual victim. Playing a copyrighted song has no victim. In fact, that act might increase the value of the song. There was a “payola” scandal, where record labels bribed radio stations to play their songs.

For most lawsuits, damages don’t include plaintiff legal fees. This provides a disincentive to sue people. Statutory copyright infringement specifically includes plaintiff’s legal fees. That provides an incentive to aggressively sue people. For example, if I sued for medical malpractice, attorney fees would be deducted from any verdict, giving me a financial incentive against suing.

If the fine for copyright infringement were only $100 per act, with no legal fees added, then BMI/ASCAP/SESAC would be out of business. Outrageous statutory fines, plus “plaintiffs are reimbursed for legal expenses”, makes this extortion scam extremely lucrative. Notice that the defendant in a copyright infringement lawsuit does *NOT* automatically get legal expenses reimbursed. Further, the extortion cartels almost always win, because the law and judges are ridiculously biased in favor of them.

Copyright law criminalizes innocent-seeming activities. Suppose you buy a CD, and then play it in your business. That’s copyright infringement. You need a separate performance license to play it in your business. The CD purchase only gives you a license for personal use.

Suppose you play the radio in your business. That’s also copyright infringement. (However, satellite radio also includes a business rebroadcast permit.) The media cartel is double-billing, because the radio station paid a license for the right to play the song. If you buy a karoke machine or jukebox, you can’t use it in your business unless you also buy a performance license.

According to recent copyright law changes, many more businesses are subject to BMI extortion. The square footage requirement for an exemption was reduced. This story had a good bit:

Spence also explained a relatively recent development in performance rights called the Sonny Bono Copyright Extension Act, which took effect in 1998 and may explain why ASCAP seems more active in recent years. It not only granted Disney a total of ninety-five exclusive years with Mickey Mouse, but also reduced the square footage at which a business can be judged a performance venue.

The law was recently changed, requiring more businesses to get a permit for music. This encourages more aggressive extortion by BMI. The law also increased “statutory damages”, giving a further incentive for legal extortion. This law change was entirely the result of lobbying by BMI and the media/music cartel.

This article had an interesting bit. Some former judges are hired to work for BMI as board members. If you’re a judge and give a favorable ruling for BMI, then you’re rewarded with a cushy high-paying job when you retire!

This article had an interesting bit. Here’s a better source.

Turns out the amendment was added by a staffer named Mitch Glazer from the office of Subcommittee Chairperson Howard Coble, R.-N.C., Glazer now works for the RIAA, the organization that sought to have those four words included in the first place, and did so with alarming quiet.

A Congressional clerk, Mitch Glazer, put an obscure clause in a law, the “Satellite Home Viewer Improvement Act”, reclassifying music writing as a “work for hire”. That law would have meant that musicians would never own copyright to their songs! The clerk who put that clause in the law immediately got a high-paying job as a music corporation lobbyist. That part of the law was repealed after much outrage.

The State can’t annoy musicians too much. The mainstream music industry plays an important role in keeping the slaves brainwashed and complacent. I’m not holding my breath waiting for a mainstream media-promoted song to say “Taxation is theft! The Federal Reserve is a scam!”

When there’s 1000+ page laws, it’s very easy for an ambitious clerk to stick an evil clause in the law. Most of the financial “reform” law has clauses like that, but only financial industry insiders will benefit. Most of the obscure financial “reform” loopholes only make sense to financial industry insider.

The main evil of corrupt State copyright law is “statutory damages”. The copyright owner merely needs to prove infringement occurred, and not that you cost them money. There’s a big difference between “compensatory damages” and “statutory damages”.

Patent lawsuits are another example of excessive statutory damages. Most patent lawsuits are filed by “patent troll” corporations. Patent troll corporation executives buy up patents, and then sue people. The most famous example of patent extortion was RIMM’s Blackberry lawsuit. Patents are not property. Every patent lawsuit is legal extortion.

If you’re kidnapped for “possession of marijuana”, that’s an example of “criminal statutory damages”. “Possession of marijuana” is a victimless crime. If you smoke marijuana, you’re only hurting yourself.

If you challenge BMI in court, you have to pay your own legal fees, even if you win, costing $50k+. If you lose, you owe statutory damages of $100k+, plus your own legal fees, plus plaintiff legal fees. The rational thing is to pay the $1k-$3k extortion fee and settle.

The problem is that the USA doesn’t have a justice system. The USA has a “justice” system. The system is set up for the benefit of insiders, at the expense of non-insiders. This vandalism was amusing. Someone vandalized the ‘Boulder County Justice Center’ to read ‘Boulder County “Justice” Center’. That’s an accurate reflection of the way the USA legal system works.

The BMI legal extortion racket undermines the credibility of the US legal system. The BMI cartel extorts $1k-$10k per small business owner per year. At the same time, productive workers are getting a lesson in how the US legal system is one big sham. In that sense, BMI is doing a good thing, because they’re undermining the credibility of the State!

Techdirt wrote an article about BMI extortion. They were criticizing a NY Times fluff piece. As usual, the NY Times was pro-State trolling. They were saying “It’s wonderful that BMI collects money for the little guy artist!” instead of “This is legalized extortion!” Most of the money BMI collects goes to writers of mega-hit songs. The BMI licensing fee is distributed based on a sample of what star performers sing and based on what popular radio stations play. The NY Times says “Those greedy small business owners aren’t paying their fair share!” Why not write “Those greedy corporations keep lobbying for retroactive copyright extensions! Those greedy corporations lobbied for ridiculously biased laws! Copyright shouldn’t last for 100+ years!”?

It’s exactly inverted. The BMI fight is presented as “little guy artist vs. greedy restaurant owner”, when it’s really “BMI corporate cartel vs. small business owner”. A “State vs. individual” fight is misrepresented as a “individual vs. State” fight.

The NY Times BMI propaganda article was published on August 6, 2010. Remember that date.

This article was interesting. It refers to this court decision. On July 26, 2010, a NY Federal district court issued a *VERY* unfavorable ruling for BMI. The ruling was “If you license music from multiple sources, you only owe BMI a prorated licensing fee.” Right now, BMI charges a flat blanket fee, no matter how many BMI-licensed songs you use.

The flat blanket licensing fee, combined with “revenue goes mostly to megahit writers”, punishes small bands who write their own music. If you pay the extortion fee, and hire bands that play all/mostly original music, you’re getting ripped off by the BMI/ASCAP/SESAC fee. You have to pay the extortion fee, just in case a band you hire accidentally plays a copyrighted song.

If you play 99.9% original music and 0.1% BMI-licensed music, you should only owe 0.1% of the fee. BMI’s pricing schedule should be a violation of antitrust law. You have to buy the blanket license just in case a band performs a copyrighted song, even if you hire bands that play mostly original music. The “statutory damages” copyright law is ridiculously biased in favor of plaintiffs. This gives bars/restaurants/venues an incentive to pay the extortion fee, or not have any music at all. Due to the threat/cost of extortion, many small bars and restaurants are saying “I won’t have a band then. It isn’t worth the legal hassle. If I have an open mike night, I’m risking $100k+ damages?” The BMI extortion racket hurts small independent bands, as venues are forced to close.

What a coincidence! On July 26, a court issues an unfavorable ruling for BMI. On August 6, the NY Times writes a propaganda article, saying how wonderful BMI is. Gee, I wonder if there’s a correlation? Did some BMI executive call his buddies at the NY Times and say “Hey! I want you to write a propaganda article for us! We need to lobby to get this court decision overturned!”?

There’s another interesting bit in the above article. There’s a “BMI Rate Court”, separate from the legal system, where BMI extortion fees are calculated. The IRS has its own “tax court”. BMI has its own “rate court”. BMI has an astonishing similarity to the IRS.

BMI/ASCAP/SESAC charge a “blanket license fee”. They look at the size of your restaurant/bar/venue, and the fee is based solely on your seating and revenue. If you play 100% BMI-licensed songs or if you only play 0.1% BMI-licensed songs, your fee is the same. This court decision potentially changes that. Even if you believe that “intellectual property” is property, the licensing fee should be based on the % of BMI-licensed songs you use, and not a flat blanket fee.

A pro-State troll says “Without flat blanket pricing, how can BMI be sure they’re charging the right amount? Per-song pricing is too much of a hassle!” If copyright extortion is too expensive, then maybe BMI shouldn’t be doing it? The current system benefits insiders, which is exactly the way BMI wants it.

Also, the flat fee is based on the *MAXIMUM* legal capacity and not your actual attendance. If your maximum legal capacity is 200 but your average seating is 50, then you owe based on the rate of 200 and not 50.

“Flat blanket fee” and “bundled pricing” is the way a monopolistic cartel acts. BMI acts like an abusive cartel, due to ridiculously high statutory damages plus legal expenses, when they sue you and win. Their library includes practically every copyrighted song. You don’t know which song is licensed to which extortion organization, forcing people to sign extortion contracts with BMI, ASCAP, *AND* SESAC.

Another example is when BMI licenses to Internet radio. Internet radio and webcasters must pay a % of revenue, independent of how many BMI-licensed songs they play. If an Internet radio station plays 99% self-published music and 1% BMI-licensed music, they owe the same fee as if they played 100% BMI-licensed music. Here’s a good source explaining the corruption in Internet radio licensing. “BMI gets a % of revenues, no matter what % of our songs you play” is extortion capitalism. There’s another Internet music licensing extortion organization, SoundExchange.

The BMI fee is not negotiated via a free market process. The licensing fee is on a “take it or leave it” basis, and they’ll sue you if you refuse. The BMI fee is based on the threat of $100k+ statutory damages plus legal expenses, rather than the true value of the music. It’s practically impossible for a business owner to make sure a band plays no copyrighted songs. Is the owner expected to have every copyrighted song memorized? Even if the owner takes reasonable precautions, there are legal precedents that say the owner is still responsible, if the band he hires makes a mistake and plays a copyrighted song.

The actual copyright owner might not even be damaged, when a band in a bar performs the song. The performance might even enhance the value of the copyright. The corrupt legal principle of “statutory damages” removes this as a valid defense.

There’s another amusing bit on Techdirt and other websites that criticize BMI. There’s always a bunch of pro-State troll comments supporting BMI! It seems that the BMI propagandists troll the Internet. They publish a bunch of pro-BMI comments on websites that criticize BMI! I wonder if I’ll get any such comments here? My blog has a decent PageRank now. This post might make the first page of Google search for “BMI extortion”.

This article was interesting. BMI has a “consent decree” from the US Justice Department, making them exempt from Federal antitrust prosecution. That article also has a reference to the “Fairness in Music Licensing Act of 1998″, which really should be called the “Unfairness in Music Licensing Act of 1998″. That law increased the statutory damages for copyright infringement. That law also increased the number of bars/restaurants/venues that come under BMI’s jurisdiction, by reducing the “square foot” requirement for being exempt from the licensing requirement. Even a non music-related store that plays music, might be required to pay a BMI licensing/extortion fee.

However, the “consent decree” doesn’t exempt BMI from private antitrust lawsuits. That merely exempts them from Federal antitrust prosecution.

This “consent decree” indicates “Congress and the President know that BMI is running a legal extortion racket.” They acknowledge and endorse BMI’s extortion. Laws were were written in a way that explicitly encourage BMI’s legal extortion. Legal precedents backed up BMI’s legal extortion practices. The media corporations have been running this performance licensing extortion scam for nearly 100 years! Recent law changes make it easier for BMI to extort from businesses.

There’s another fallacy in the way the law is set up. “The bar/restaurant/venue owner is legally responsible for copyright infringement, and not the performing band.” If BMI went around suing musicians, then “It’s for the artists!” would obviously be a lie. Besides, most small bands are broke. There’s nothing to be gained from suing them. The small business owner has tangible assets that can be extorted.

The bar/restaurant/venue owner is required to purchase the performance license, and not the band actually performing. If the band were required to purchase the performance license, then they’d only pay for the songs they actually plan to sing.

Suppose a bar hires a band. He tells the band “I don’t want you playing music that requires a third-party licensing fee.” Suppose the band plays such a song anyway, either or purpose or as a mistake. The bar owner is still legally responsible! The contingent liability for hiring a band is too high. Many small business are saying “Screw it! I won’t have any music!”, rather than deal with the BMI extortion licensing cartel.

This article had an interesting bit. Even if the venue owner makes the band sign a written contract “I agree to not play BMI-licensed music.”, the venue owner is *STILL* legally responsible if the band plays such a song anyway, either on purpose or by mistake. There’s a legal precedent that removes “I told them not to play that!” as a valid defense. Those BMI scum and corrupt judges think of everything. Given the way the law works and given unfair legal precedents, the contingent liability for hiring a band without paying the extortion fee is ridiculously high.

The BMI extortionists make a bizarre statement. “Our music library contains almost every copyrighted song. It’s impossible to have a live band performing, without infringing on our copyrights. If you have a live band or play music, you have to pay our licensing fee.” The statutory penalty for infringement is so high, that if you play *ONE* infringing song all year, the statutory penalty is 100x higher than the licensing fee. If a venue refuses to go along with the extortion racket, then the BMI cartel will send spies to watch your performances, ready to sue you if someone performs a copyrighted song for which they own the performance rights.

This webpage has an interesting story. A musician wrote his own music. He gave performances. The BMI cartel still attempted to extort from the bars that hired him to perform. The bar fired him and stopped offering music, even though he was playing 100% non-BMI-licensed music. From the point of view of the small business owner, they’d rather not have music, than pay the extortion fee. The threat of extortion forces the band to stop offering music, even though the actual performance was non-infringing. The small business owner will stop having a band, once threatened with BMI extortion. The extortion cartel cost that independent musician his performance jobs.

The BMI extortion cartel is forcing many small bar/restaurants/venues from offering music. In effect, it’s a huge tax hike.

The BMI extortion fee isn’t free. It comes from money that would otherwise be available to pay musicians. The cost of the extortion fee is passed onto customers via higher prices.

Congress and the legal system have specifically endorsed BMI’s legal extortion practice. However, there are some ways an ambitious lawyer might defeat them.

  1. RICO might apply. I don’t know if anyone has tried this. One source said that someone won a RICO lawsuit in trial court, but had the verdict overturned on appeal.
  2. Another potentially relevant law is the “Hobbs Act”. BMI sends their threat letters via mail, making them potentially subject to mail fraud. If a BMI agent falsely says in a letter “If you have live music, you owe us a fee, no matter what songs you perform.”, then that’s mail fraud. When a BMI agent says “Pay us or we’ll sue. We’ve never lost a lawsuit.”, that could be interpreted as extortion and sending threats via mail.
  3. Antitrust law might apply. The “consent decree” only gives BMI an exemption from Federal antitrust prosecution, but not from a private lawsuit.
  4. BMI’s pricing practices are indicative of an abusive monopoly. They offer a “flat fee”, based solely on the size of your business. Really, it should be a prorated licensing fee, based on the % of BMI-licensed music you play. BMI exploits the fact that “statutory damages” and legal expenses for a single act of infringement are 100x greater than the licensing fee. Therefore, they offer only a flat licensing fee.
  5. Copyright law might violate the “no excessive fines” portion of the Constitution, the 8th amendment. If you buy a BMI license, the fee is a couple cents per song. If you have no license, the statutory fine is $100k+ per song. That’s a pretty huge discrepancy. That’s the result of lobbying by insiders, giving BMI the power to extort.
  6. Sending a letter that says “Pay me or I’ll sue!” may violate state anti-extortion laws. Here is a link to NY’s anti-extortion law. It seems that BMI’s practices violate 155.05.2.e.(iv), (vii) or (ix). However, that’s subject to the interpretation of a biased State judge.
  7. Can you use a “jury nullification” defense in a civil lawsuit? The defense can argue “BMI is running a ‘legal extortion’ racket. Therefore, the jury should vote ‘not responsible’ no matter what the other facts of the case.” However, a judge would probably bar such an argument. Even if you made such an argument, the verdict could be overturned on appeal; “double jeopardy” doesn’t apply to civil lawsuits.

However, I’m not a legal expert. BMI has purchased sufficient Congressmen and judges that they’ll probably be able to continue their extortion racket. I doubt any of BMI’s victims will get a fair trial in a corrupt State court.

There’s another weird bit about BMI copyright infringement lawsuits. It isn’t “BMI vs. victim”. It’s “copyright owner vs. victim”. BMI is acting on behalf of whoever owns the copyright.

The NY Attorney General frequently likes to challenge abusive corporate cartels. I’d like to see him challenge BMI’s practices. Even if a RICO or antitrust lawsuit fails, it would raise awareness of the issues. BMI is extorting from businesses in NY, giving the NY Attorney General legal standing to pursue a RICO/antitrust lawsuit. There may be NY-specific anti-extortion laws that BMI is violating.

It’s obvious that BMI is running a legal extortion racket. Unfortunately, corrupt State judges think otherwise. If you’re an insane State judge, BMI’s practices are totally legal.

This is the evil of the State. BMI makes a *TON* of money via legal extortion. They spend a fraction of this money lobbying for favorable laws. If you steal $1B via legal extortion and spend $100M lobbying, then that’s a very profitable scam.

Here’s a summary of all the issues:

  • BMI is running a legal extortion racket.
  • The body language of BMI scum is exactly the same as that of a mafia gang. Under “color of law”, their extortion racket gets the illusion of legitimacy. Their extortion racket is backed by the full evil violent power of the State.
  • BMI is suing people for violating laws they lobbied for! Once a “legal extortion” racket crosses a certain profitability threshold, it becomes self-sustaining via lobbying, buying politicians, and buying judges. It’s pretty scummy to lobby for a law, and then go around threatening to sue people for violating it.
  • There’s a real cost to BMI extortion. Whenever you got to a bar, restaurant, nightclub, or theater, part of the price is the cost of BMI legal extortion. Also, fewer venues offer music, due to the threat of BMI extortion.
  • If you say “Pay me $1k or I break your legs!”, that’s obviously illegal. If you say “Pay me $1k or I sue you!”, that’s still immoral extortion, but presumed legal.
  • BMI agents spy on businesses who play music, so they can extort from them. They’re a type of “economic secret police”.
  • Current copyright law is ridiculous. The business owner has an obligation to know every copyrighted song and make sure his bands don’t play them. Otherwise, he must sign with these extortion licensing organizations or be subject to ridiculous statutory damages.
  • BMI agents are paid based on a % of extortion/license money they collect. This gives them an incentive to behave abusively.
  • BMI agents will harass a business owner and their employees, until they pay the extortion fee.
  • Some BMI agents are big muscular men, implying the threat of physical violence.
  • Some BMI agents might lie, saying that a band played a copyrighted song when they actually didn’t. They have a financial incentive to lie.
  • Some BMI agents claim “All bars/restaurants/venues that have live band performances are required to pay the licensing/extortion fee.” That is false. The copyright extortion law only applies if you play songs that are copyrighted and BMI is hired to enforce the copyright. BMI’s music library is so large that they claim “If you have a band, you’re statistically practically guaranteed to be infringing.”
  • Some artists who only play their own music have been fired from performing gigs, due to the threat of BMI exortion.
  • The BMI extortion racket has hurt small independent bands. Many small bars/restaurants are refusing to have bands, rather than deal with the BMI extortionists.
  • A really cynical person could say “The media cartel is intentionally shutting down small music venues so that independent bands can’t earn a living.” That ruins the Internet business model of “Give recorded music away for free and sell tickets to live performances.”
  • There’s another defect in the way copyright law is written and enforced. The bar/restaurant/venue owner is responsible, and not the band actually performing. The artist and venue are jointly responsible for any copyright infringement.
  • If BMI went around suing small bands, then “It’s for the little guy artist!” would obviously be a lie. Besides, most small bands are nearly broke.
  • BMI sues the owner of the bar/restaurant/venue. A small business owner has tangible assets than can be extorted, making them a juicy target. A small business owner doesn’t have deep pockets, giving them an incentive to settle and pay the extortion licensing fee.
  • If a business owner makes the band sign a contract “We agree to not play music that requires a third-party licensing fee.”, then that should provide the business owner protection from being sued. Unfortunately, that’s not the way BMI extortionists and State judges think. It seems there are legal precedents that establish the liability of the owner, even if he tells his band to not play such songs. That’s ridiculous.
  • The BMI extortion racket creates a huge contingent liability for a bar/restaurant that hires a band without a BMI license. If the band plays just one BMI-licensed song, then the business owner is exposed to a *HUGE* liability. Most small business owners will say “I won’t have a band at all!” if they were considering having a band once a month or once a week.
  • Most/all BMI extortion money goes to writers of megahit songs. “We’re looking out for the little guy!” is a lie.
  • For copyrighted songs, how many performance copyrights are owned by individuals? How many performance copyrights are owned by large corporate cartels?
  • One source said that, when you sign with a major label, the label gets 50% of the performance copyright revenue. The writer gets the other 50%.
  • For a megahit song, the current copyright owner may not be the person who originally wrote the song. For example, rights to “The Beatles” songs have changed hands several times. Retroactive copyright extension and stricter laws means that the value of copyrights keep increasing.
  • The BMI license/extortion application looks a lot like an IRS 1040 extortion form. BMI has its own “rate court” just like the IRS has its own “tax court”.
  • A complicated tax form creates the illusion of fairness in the taxation system. A complicated BMI licensing form also creates the illusion of fairness.
  • BMI recently got an unfavorable court ruling. A few days later, the NY Times published a puff piece, saying how wonderful BMI’s extortion racket is. I wonder if there’s a correlation between those two events?
  • Whenever a blog or website publishes a BMI-critical story, pro-BMI trolls post a bunch of comments. I wonder if this post will attract pro-BMI trolls?
  • BMI’s extortion fee is not based on a free market negotiation process. It’s based on the threat of a lawsuit, legal fees, and statutory damages.
  • BMI’s extortion fee has nothing to do with the real economic value of the music performance right.
  • The fact that some businesses pay the BMI extortion fee, does not prove that their practices are reasonable.
  • The statutory damages for copyright infringement have nothing to do with actual economic loss. In fact, playing a song might increase the value of the copyrighted song. There was a “payola” scandal, where labels paid radio stations to play their music.
  • BMI has purchased Congressmen and judges. They have favorable laws and legal precedents backing their extortion scam.
  • BMI lobbied for favorable recent copyright law changes. Statutory damages were raised. More bars/restaurants/venues are now legally required to pay the extortion fee.
  • You can’t know a priori which songs are owned by which extortion organization (BMI, ASCAP, or SESAC). Therefore, you must sign an extortion contract with all three.
  • Copyright law criminalizes innocent-seeming activities. If you buy a CD and play it in your business, that’s illegal. If you play the radio in your business, that’s illegal. If you buy a karoke machine or jukebox and play it, that’s illegal. For radio, it’s double-paying, because the radio station also purchases a performance right when they air the music.
  • High statutory damages specifically encourage legal extortion. The victim must pay plaintiff’s legal fees in addition to his own legal fees, further encouraging extortion.
  • The way copyright law is written, the copyright owner must have a zero tolerance enforcement policy. Otherwise, they may forfeit their copyright.
  • BMI only offers a “blanket license”. It’s the same fee whether you play 100% BMI-licensed songs or only 0.1%. That might be a violation of antitrust law. People pay the fee because statutory damages for copyright infringement, even once, are ridiculously high.
  • Really, the BMI license fee should be prorated, based on the % of BMI-licensed songs you play. The recent unfavorable BMI court ruling was about this issue.
  • BMI has a “consent decree” from the Justice department, making them immune from Federal antitrust prosecution. That doesn’t provide immunity from private lawsuits. This “consent decree” means that the President and Congress approve of BMI’s extortion scam.
  • An ambitious lawyer, prosecutor, or attorney general could pursue BMI. The best tactic would be RICO, the Hobbes Act, or antitrust law. NY’s attorney general sometimes pursues claims like this. The legal system is nearly completely corrupt. I’m not holding my breath waiting.
  • RICO might apply due to BMI’s excessive harassment of businesses that refuse to pay the licensing fee, along with BMI’s policy of suing and threatening to sue everyone who doesn’t pay.
  • BMI may send out threat letters implying the possibility of future copyright violation, even though they have no evidence of a specific copyright violation.
  • Antitrust law might apply, due to the blanket licensing policy.
  • The BMI extortion scam undermines the credibility of the legal system and political system. In that sense, it’s a good thing!
  • Any lawsuit regarding copyright, patents, or trademarks is really legal extortion.

Most importantly, “intellectual property” is not property. The term “intellectual property” sets the debate in the wrong frame. “Intellectual property” is an excellent widely-hyped evil fnord phrase. It really should be called “Intellectual un-property”.

Someone should build a database of public domain royalty-free music. Independent artists should be encouraged to submit to this database, rather than signing with a label. If you’re an independent artist, you’re encouraged “Go sign with BMI!” Then, you discover that you only get paid if you have a megahit song.

The State extortion scam provides the illusion of legitimacy to BMI’s legal extortion scam. There’s a lot of pro-State brainwashing regarding “intellectual property”. Patents, copyrights, and trademarks are not property. A massive propaganda campaign is necessary to convince people that “intellectual property” should be treated like real property.

The USA has the best Congress and “justice” system that insiders’ money can buy. BMI is an excellent example of corruption capitalism. BMI receives humongous State subsidies. Some of their profits are spent on lobbying, guaranteeing that the extortion scam continues. BMI recently lobbied for laws making it easier to extort. After these favorable law changes, BMI stepped up their extortion efforts.

BMI has purchased a bunch of Congressmen, judges, laws, and legal precedents. You probably aren’t going to get a fair trial in a corrupt State court. The music licensing extortion cartel is *VERY* well connected.

Government is a huge highly-profitable extortion racket. Scum like BMI piggyback the State extortion racket to run a legal extortion racket. If BMI had to maintain their own private army, to enforce their extortion racket, then it wouldn’t be profitable. BMI externalizes its extortion enforcement costs to the State.

The BMI scum are an example of why the US economy is failing. It’s easier to use the legal system to extort from people, than to actually build a profitable business. BMI profits come at the expense of small business bar/restaurant owners, who typically already have thin profit margins. The BMI/ASCAP/SESAC cartel is an excellent example of the parasite class exploiting the productive class.

BMI/ASCAP/SESAC are running a legal extortion racket. It’s huge and extremely profitable.

Read the original story at FSK’s Guide to Reality


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