Bizarre Combo Rulings From EU Court Of Justice: Dentists Don't Have To Pay Music Royalties, But Hotels Do

from the see-if-you-can-figure-it-out dept

Wed, Mar 21st 2012 12:02pm — Mike Masnick

Over the last few years, collection societies have become ridiculously aggressive in trying to get just about anyone to pay up for playing music. The results have been rather crazy, with auto garages being told that they have to pay up because the mechanics out in the garage had the radio on loud enough that customers in the waiting room could hear it. Ditto for a police station where some officers had a radio on in the back, but which some of the public could hear in the front. Then there was the demand that a grocery story pay up because a shop assistant sang while stacking cans. And the craziest of all: the time when the owner of a horse stable was told to pay up because her horses liked listening to music.

A lot of this comes from the simple fact that these collection societies are really just trying to squeeze as much excess revenue as they can out of any location they can find. It's gotten to the point where the "copyright investigators" are really sales people, and are given incentives just like a sales person. They have revenue targets with bonuses for extra revenue they bring in. This gives them incentives to do all sorts of crazy things... like randomly calling up small businesses and if they hear any music in the background, demanding a license.

Thankfully, it appears that the EU Court of Justice is pushing back on some of that. It recently issued two rulings about royalty collections -- but unfortunately it seems like the two rulings conflict with each other in some ways. In one, it is determined that a dentist's office does not need to pay a royalty because patients don't go to the dentist for the music:

Finally, it cannot be disputed that, in a situation such as that in the main proceedings, a dentist who broadcasts phonograms, by way of background music, in the presence of his patients cannot reasonably either expect a rise in the number of patients because of that broadcast alone or increase the price of the treatment he provides. Therefore, such a broadcast is not liable, in itself, to have an impact on the income of that dentist.

The patients of a dentist visit a dental practice with the sole objective of receiving treatment, as the broadcasting of phonograms is in no way a part of dental treatment. They have access to certain phonograms by chance and without any active choice on their part, according to the time of their arrival at the practice and the length of time they wait and the nature of the treatment they undergo. Accordingly, it cannot be presumed that the usual customers of a dentist are receptive as regards the broadcast in question.

Consequently such a broadcast is not of a profit-making nature...

Of course, you could make the identical argument about music playing in all sorts of places. But, at the very least, it certainly suggests that the music playing at an auto mechanic's garage or a police station are not subject to royalty collections under EU law.

But then there's the other ruling. The exact same court. The exact same panel of judges. The exact same day. Very different ruling. This one involved a hotel, and the question of whether or not music playing in the hotel rooms is subject to collections. And here, the court comes to the opposite conclusion, and says that the hotel must pay.

In a press statement, the Court said that since music in hotels is broadcast to an "indeterminate number of potential listeners" and is "of a profit-making nature" hoteliers are liable for royalty payments. It added that broadcasting music constitutes an "additional service which has an influence on the hotel's standing and, therefore, on the price of rooms."

I'm having difficulty figuring out the difference here. The article linked above notes that these rulings hinge on "the concept of public" which is based on "'an indeterminate number of potential listeners and a fairly large number of persons,' alongside the question of a profit motive." However, it seems like a total judgment call in either case as to whether or not there is a "fairly large number of persons" and just where "the profit motive" comes into play. Both dentists and hotels have a profit motive, and both play music in part because of that reason. But it's arguable as to whether or not the music has a direct impact on actual profits in either case. In the end, the pair of rulings just seems to leave everything a lot more confused, rather than clarified in any way.

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Filed Under: collection societies, dentist offices, eu, hotels, music, pros, royalties

40 Comments

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Hulser (profile), 21 Mar 2012 @ 11:28am

The difference
I'm having difficulty figuring out the difference here.

The difference is simply the degree to which it's deemed that music contributes to the appeal of a service. I'm not saying that I agree with the judgement about the hotel, but I can see the logic of accounting for how the availability of music affects drawing in customers. Having music at a bar draws more people in. If you surveyed bargoers, you'd have a relatively high percentage of people that would say having music would make them more likely to patronize a bar. But not so with a auto shop, police station, or a stable. But...the hotel? Probably somewhere in the middle. Again, it's subjective, but I think at least the scale being used is correct.
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Jay (profile), 21 Mar 2012 @ 12:17pm

Time of day
Correct me if I'm wrong, but wasn't a story done about how judges make peculiar rulings at different times of day?

I believe the hotel was close to closing time, everyone wanted to go home, and they just decided to say, "Screw it, tax the hotel"
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Tim K (profile), 21 Mar 2012 @ 12:28pm

It added that broadcasting music constitutes an "additional service which has an influence on the hotel's standing and, therefore, on the price of rooms.

Do some hotels not have radios in them? I've never once seen an ad for a hotel saying I should pick them cause they'll have a radio/alarm clock, I thought that was standard across the board and so it would in no way be a deciding factor in where someone stayed.
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Xenophorge (profile), 21 Mar 2012 @ 12:34pm

Hmmm, what happens when some enterprising young people come up with the idea of putting dentists in hotels? Do they cancel each other out?

On a side note, I've had to travel a bit for work, staying at various hotels. For the life of me I can't recall ever hearing any music, most likely because it was "muzak" and easily ignored anyways. Can't see how it add's any value.
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Tim K (profile), 21 Mar 2012 @ 12:40pm

Re:
whether or not music playing in the hotel rooms

From that I would assume they are talking about the radios in individual rooms, not elevator music or music in a lobby.
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Anonymous Coward, 21 Mar 2012 @ 12:42pm

Re: The difference
I'm with Hulser on this one. The hotel ruling wasn't about some hotel staffer running a radio at the front desk. This was about a hotel feature that pumps music into the guest rooms.
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GMacGuffin (profile), 21 Mar 2012 @ 12:49pm

Re: Re: The difference
This was about a hotel feature that pumps music into the guest rooms.

... and if so, one would presume that the music in hotel rooms, like the TV, has various channels to select, or can be turned off or on by the guest as desired, unlike the dentist's office (although that would be grand - in light of what usually gets played at dentists).
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Hulser (profile), 21 Mar 2012 @ 12:50pm

Re:
Do they cancel each other out?

Yes, but only if they just play the "Dentist!" song from Little Shop of Horrors.
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Xenophorge (profile), 21 Mar 2012 @ 12:55pm

Re: Re:
In the same vein, I wonder when they'll start pushing for the radio in my car to need an extra license, since it might be -shock- used to listen to music on. Free music, no less, or freely given at least.
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Anonymous Coward, 21 Mar 2012 @ 12:56pm

I like the term "phonograms"...
...which underscores their antiquated thinking.

A little off the subject, but it's a lot like the name "Grammy Awards." ...because they're giving awards to the best "gramophone" recording? Huh?

At some point, they should have renamed them the "Phonies" at least, but that would have hit too close to home I suppose.

Now, they could name them the "Seedies" (CD's?), which has a certain ring to it....
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flargalgargal (profile), 21 Mar 2012 @ 1:02pm

Re: Time of day
But if it had been the end of the day, they would've already handled the dentist case, and could have just decided to use the same ruling. That wouldn't have been too much work either, so it doesn't really make much sense.
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Anonymous Anonymous Coward, 21 Mar 2012 @ 1:08pm

Re: Re:
So what if you listen to talk radio, or a news station like NPR or BBC in your hotel room. The hotel is liable anyway? Sheesh!
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Unanimous Cow Herd, 21 Mar 2012 @ 1:18pm

Re: The difference
Too bad this precedent wasn't set in the US.
Would make for an interesting case regarding infringement
"without monetary gain" which is mentioned now in the ridiculously long timed FBI anti-piracy warnings on DVDs.
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Anonymous Coward, 21 Mar 2012 @ 1:19pm

The first quoted snippet from the judge is an excellent counterpoint to the guy who insisted a hairdresser should pay for a license to play the radio.

http://www.techdirt.com/articles/20100706/10570810083.shtml

At 600 comments, its quite a read, but that quote from the judges decision captures much of what a lot of people were trying to say counter to what he was saying.
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Anonymous Coward, 21 Mar 2012 @ 1:32pm

Re: Re: Re: The difference
I had a dentist that had a TV on a stand way up the wall at a ridiculous angle, so it was perfect for watching when he had you back in the chair. They would give you the remote when you were waiting and had a basic cable package. I miss that dentist, as much as one can miss a dentist.
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Anonymous Coward, 21 Mar 2012 @ 1:33pm

I wonder why no one has ever pointed out the antitrust violations posed by these organizations. This is just a group of content creators colluding to gain royalties. Since one organization does it all for them, there is a bit of price fixing involved and it is all very anti-competitive in nature. Somewhere the government must get a cut to stay silent.
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Anonymous Coward, 21 Mar 2012 @ 1:35pm

Re: Time of day
The judges were all like, lol, watch this, they'll really be confused and scratching their heads now.
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Anonymous Coward, 21 Mar 2012 @ 1:39pm

Re: I like the term "phonograms"...
Or the threebies (mp3) but that sounds too much like freebies so it a'int happening.
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Anonymous Coward, 21 Mar 2012 @ 1:42pm

Re:
On expedia, the hotels do list radios as a feature.
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Anonymous Coward, 21 Mar 2012 @ 1:51pm

Re: I like the term "phonograms"...
And the award for the 'seediest' method of screwing your customers goes to......

drum roll

.....

.....

....

....

...

...

It's a tie between the MPAA/RIAA (and the UK counterparts).

Would be a great award show
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Anonymous Coward, 21 Mar 2012 @ 1:57pm

I can see how in theory these rulings might make sense: radios in the rooms might be something a hotel would advertise (as part a list of all of the rooms' features), whereas a dentist's office is unlikely to advertise its music.

On the other hand, my feeling is that in terms of the contribution to profits, the music is probably doing a lot more at the dentist's office (where helping alleviate a stressful experience through good music, nice decor, etc. is potentially rather important in retaining patients) than at the hotel (where the "indeterminate number" of listeners is most likely very low in reality).
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Killercool (profile), 21 Mar 2012 @ 2:51pm

@ Hotel radios
I bring my own music. Do I get to demand a discount equal to my share of the royalty payment?
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Anonymous Coward, 21 Mar 2012 @ 7:11pm

At some point there'll be a shill or darryl waltzing in to call us all idiots, saying that since everyone in the world is or has been exposed to music at some point during their lifetime we're just paying what we all owe.
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Anonymous Coward, 21 Mar 2012 @ 7:29pm

Re:
if as you say it is a 'standard' forhotels to have radio's and alarms, then why do you expect them to advertise that fact ?

Do you see hotels adversing that if you get a room you have access to a bed and a fridge ? Or do you think you need to be told that ?
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darryl, 21 Mar 2012 @ 7:37pm

Bizzare is Mikes mania
It's really simple, even Masnick knows it (but will never admit it).

You go to a hotel for the overall ambience for a level of comfort and convience, part of that experience is nice carpets, clean room, carpet, heating, aircon and yes entertainment, in room movies, radio, TV, internet ect.

That is why you pay to go to hotels, you are paying for those things, it is reasonable that the people who made the carpet, created the movies, built the fridge should be able to make a living from their efforts..

You go to a dentist NOT for the ambience, not for the convience and for the accomidation, or the entertainment.

You go to the dentist to receive medical treatment, notice the distinction ? You dont pay the dentist for the music he plays, you pay him to fix your teeth !

The dentist is not providing you entertainment in return for money, a hotel does.
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Anonymous Coward, 21 Mar 2012 @ 7:42pm

Not that buzarre as it sounds
In Hong Kong, when you're playing a film in a place with more than 9 person watching, the place will be recognized as cinema and would require cinema licence to run.

If you're tutor that have more than 9 students in the same lesson, the place will be recognized as school and will be required to get a permit from educational department in order to run legally.

I think the ruling can be simplified to "headcounts counts".
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Anonymous Coward, 21 Mar 2012 @ 9:25pm

Re: Re: Re: Re: The difference
Which adds the interesting idea... should the MPAA (or something of the like) be demanding licence payments for TV's in view of this... what if there is music on the TV... can the RIAA (or something of the like) demand licencing fees???
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Anonymous Coward, 22 Mar 2012 @ 3:44am

Actually it has something to do with the stars a hotel gets. Entertainment in the room is one rating criteria. So it does make sense to actually have a hotel acquire a license. ( I am not saying that I am supporting this).

So the hotel can charge higher prices ergo incurring a direct benefit from having radios in the guest rooms.
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Niall (profile), 22 Mar 2012 @ 3:59am

Re: Re:
Bed no, fridge yes.
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Niall (profile), 22 Mar 2012 @ 4:03am

Re: Bizzare is Mikes mania
Right on cue! Mr darryl Nameless arrives and spews!

How about the argument that the music is more necessary to relax people at a dentist's, whereas the hotel is somewhere the ambience and enjoyment is usually a lot higher, and it's somewhat more likely you've chosen to be there?

We're having a civilised debate here, so how about you try really really hard to prove that you can be civilised, instead of proving why we sent all our gutter scum to the Antipodes?
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Niall (profile), 22 Mar 2012 @ 4:05am

Re:
Wow, a sensible point from an AC, politely made. +1 internets!
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Anonymous Coward, 22 Mar 2012 @ 4:55am

Re: Bizzare is Mikes mania
>That is why you pay to go to hotels, you are paying for those things, it is reasonable that the people who made the carpet, created the movies, built the fridge should be able to make a living from their efforts..

Good, so since the hotel already paid for the fridge and carpet once they should only need to pay for the music once. Unless you're telling me the hotel needs to pay a fridge and carpet license for every time someone uses them.
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DigitalDao (profile), 22 Mar 2012 @ 6:33am

Re:
Sure, but the radios just pick up broadcasts that are free to listen to in any other context. Why should anyone, business or otherwise, pay for additional licenses to tune into content that is being broadcast for free?
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Niall (profile), 22 Mar 2012 @ 7:31am

Re:
I think there should be a difference between having radios in the room (which should be 'free' as the radio is free everywhere, and which would be a 'private' environment) and music played in openly public areas such as lobbies and lifts.
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Suja (profile), 22 Mar 2012 @ 8:54am

Re: Re: Bizzare is Mikes mania
Toilet license! Everytime someone flushes it taxes them 5 dollars.
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David Cortright (profile), 22 Mar 2012 @ 12:12pm

CC to the rescue?
Could the hotel be off the hook if all they offered was Creative Commons commercially licensed music? Or would the burden of proof still be on them that they are not infringing? Might be an interesting business model, along the lines of Red Hat for Linux. You pay a fee to stream CC music, but it is less than the fee to the music industry. and the fee goes to shield you from legal entanglements.
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Anonymous Coward, 22 Mar 2012 @ 8:41pm

Re: Re: Re: Bizzare is Mikes mania
Wow, that's certainly money down the drain alright.
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Anonymous Coward, 22 Mar 2012 @ 9:35pm

Re: Re:
"Why should anyone, business or otherwise, pay for additional licenses to tune into content that is being broadcast for free?"

I'd like to know this, too. The radio station is already paying to broadcast the song to everyone within range. I realize that this payment is tiny, but that's a contract issue between the stations and the music companies.
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Pennsylvania Dentists, 12 Apr 2012 @ 4:10pm

Really?
That really is ridiculous. I don't see the difference between one industry and another. Either way people are broadcasting music that is already freely available.

Unfortunately, until the "copyright investigators" are no longer given incentives to find more and more victims then it won't stop. Yes, some action should be taken but charging hotels is not it.
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Nha khoa việt giao, 17 Feb 2014 @ 2:08am

Nice post
Nice post. Thanks for sharing :)
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