It's the same as any other contract. If you and I have a contract and you violate it, I have the power of law behind me to sue you. You do not have the rights to the music until you license it. You are, in effect, stealing it. These groups give you the opportunity to pay for what you'd like to use. If I catch you shoplifting in my store I can have you arrested. I have no powers of law. If I prefer, I can hire a security guy, or a security company to keep en eye on my store. If HE catches you shoplifting he's going to deal with you. Same thing.
TIB
You can find a thousand articles arguing either way. Whether the system is right, wrong or indefferent has been argued by thousands upon thousands for decades. Obviously, songwriters must be compensated. How better? (Don't answer that!)
All the groups are non-profit and actually keep a very small percentage of the $$ they take in. BMI keeps 12%. I don't know about you, but I can't run a retail operation on 12%.
The same basic thing happens for EVERYTHING that's copyrighted, from books to photos to magazines, etc. There are other similar groups that work for writers, etc.
Remember, as the Super Bowl just passed us by... the NFL is also a non-profit!
TIB
Stores can now play the radio with no license. Rules were updated/changed a few years ago. There are limits to how many speakers, etc.
And of course if they have a background music service -- like if you're walking around in the store listening to, say, oldies, and it's just music, not a radio, they're using a music service and the licensing fees are built into the service costs.
A station I worked at many decades ago used our FM subcarrier to broadcast background music for stores. We'd come out and install a SCA receiver in the store, and either hook it into their existing system or install the shole thing, and the subscription fee they paid us covered the music license too.
TIB
About 80 years ago, when radio was starting to play a lot of music, the AFM (musicians union) discovered that people didn't have to go to live concerts, or buy records to listen to the music of the day. They could hear it on the radio free. <insert long story here> They decided to charge a royalty to radio for playing music to make up for the cash musicians were losing in sales and gigs, backed by copyright law. ASCAP was created. Shortly thereafter the RADIO people decided ASCAP was a monopoly and they were going to start their OWN licensing group, sign their OWN people, and compete with ASCAP, and BMI was created BY THE BROADCASTERS to compete with ASCAP. SESAC was the European version of the two, originally licensing European originated music only. They of course have grown over the years to include much more. Obviously each group can only collect for and represent the writers that are their members.
That's a VERY SHORT version of how this all started.
And copyright, originally, in the USA was for a year. To "give creators an opportunity to earn something from their work". Then if they were, say, a writer, they were expected to write another book. Or song. Or Paint a painting, take a photo, etc. Not be able to gain income from "one job" for the rest of their life!
Making a long long story even shorter -- extensions to copyright law really kicked in when publishers who purchased rights got involved. "We bought the rights to this (whatever) and need time to earn from it." So they got the laws changed, often using the plight of the creator for leverage. It's a LONG storyl I've spent hours an hours reading about it.
TIB
I heard that Disney was a large contributor to current copyright law. (Can't let that mouse go public domain, ya know)
And now, to confuse things further for Part 15 operators, there's a *4th* music licensing organization: Global Music Rights, or GMR. It's headed by Irving Azoff. Yes, *that* Irving Azoff. They have signed some big-name writers like John Lennon, Steve Miller, Glenn Frey, Adele, and many more. Licensed radio stations just started paying monthly royalties to GMR in January. It will be interesting to see if they require a license from Part 15ers.
The GMR artists are mostly made up of people who didn't like the deals they were getting at ASCAP or BMI (which ever they belonged to) and joined the new group. After all, the creators are welcome to have ANYONE represent them and collect their royalties, they can even do it themselves if they so choose. Remember, this represents SONGWRITERS ONLY. So if you have, say, a song performed by John Lennon that was written by Chuck Berry, you're still covered with your BMI license. Remember, radio ONLY PAYS SONGWRITERS. You only pay artists when they are also the writer, and you pay the artists if you're streaming.
And remember, the copyright holder (songwriter) is welcome to charge whatever they like for the use of their music.
TIB
Was VERY vocal in reform of copyright laws to make darn sure their stuff didn't go Public Domain.
TIB
Some background
Up next:
Plastic makers will start charging radio stations for the plastic used to make CDs played on the air.
Vinyl makers will charge for the playing of records and, of course, needle companies will have a fee for playing them.
Chip makers will want a cut when music is played on a computer.
Of course, electricity is needed for any music to be played, so the utilities should get a cut for use of power for it all to happen. On and on it goes......
"End of sarcasm alert--now back to your regularly scheduled program."