Music Licensing Gangsters · Restaurant Pros

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.

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.

Option 2 is using a third party Jukebox or music service that covers the payments to the music license gangsters. TouchTunes has a program in 2025 where they install a jukebox, and you can have it play music between song purchases for as little as $14 per month. Check with your local TouchTunes rep to make sure that is still valid. This is one way to avoid the fees altogether, especially if live music is not a real benefit after the analysis described in #1. You can look into other alternatives like Soundtrack.io, Custom-channels.com, and Melodypods.com. They cover the fees for music played in your restaurant and you can have better control over what is played than with a Jukebox. It’s also a good strategy not to offer too much information to the music license gangsters. ASCAP is the only one, in my experience, that actually reviews your social media, and even sends a human to check out your music.

Negotiate well and pass on the cost. First, negotiate - tell the music license gangsters what you could afford to pay. Through the 2010s, I was able to say $400 is all I can afford to pay, and that worked. In the 2020s, it’s risen to the $600-$700 range per gangster. Be careful, what you agree to; a friend of mine agreed to $2,000 per year for ASCAP, then realized he had to deal with the other gangsters. Once you commit to a fee, it is very difficult to wrangle out of it. Let’s say you succeed in limiting them to an average of $600 per music gangster; that’s $2,400 per year between the four groups.

The live music cost and the music license fees must be factored into your beverage costs. Your music cost is $10,400 at an average of $200 per entertainer (52 weeks) and an additional $2,400 for the music licenses. So you need to find what is $12,800 in relation to the total alcohol sales. That will give you your percentage cost. In 2023, we sold $323,000 in alcohol, or 4%. If you’re adding at least 10% for spillage cost, then 14% minimum would be factored into each row on the menu costing as additional cost. Keep in mind, this is based on only one show per week. To add more shows, you’ll need to add $10,400 for each weekly show for the year. And also keep in mind if you have only top entertainers, it’s another $5,200 per year for every $100 average entertainment cost.

One last thing to consider is how live music serves your brand and if it’s profitable. Evaluate whether you have entertainers who bring crowds or entertainers who just go through the motions. You want to create memories by creating a memorable experience. A disengaged entertainer who does no marketing, brings only his girlfriend, and charges you $200 does not make live music a bad idea per se. My favorite entertainer charged $300 plus a food and drink tab, but he brought in $3,000 or more in additional sales on his worst day. It’s all relative.

Let me know your thoughts on this, and if you have any questions, fire away. If you're facing any issues or tough decisions and need advice, leave it in comments and I will address it directly.

Thanks for reading!

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