Topic: Copyright Laws / Music Licensing Fees

I've recently been contacted by a consultant from one of the three Performance Rights Organizations who has informed me that we are likely in violation of music/television copyright laws. This is based on photos he has viewed online, mainly of our fitness centers. I have read the NMHC/NAA White Paper and various other articles about the effect of this issue within our industry, but they ultimately have all led to "consult an attorney specializing in copyright laws". I understand what the guidelines are according to these PRO's - to sum it up quickly, certain businesses over a certain size must pay a fee if they exceed a certain number of speakers or televisions in a given room. These are the most basic of the guidelines, however even the basics are a bit questionable.

For example, the copyright laws state you must pay a licensing fee for a public performance (includes recorded performances on the radio, tv, etc.). If there is more than 1 TV in a room you are considered to be providing this public performance and therefore are required to have a license. Many of us have fitness equipment that include individual television monitors. According to this consultant I spoke with, these count as a means to a public performance, even though the media that streams from it is directed only to one individual - the person on the treadmill - and not to the masses. Since this is a fairly new issue for our industry, there is no historical data and no court ruling to offer guidance on which view is the correct one.

I have heard that some owners/managers are opting to remove speakers and televisions to get to the minimum allowed without paying the fee. I've heard others are paying not only this particular organization that seems to be spearheading the campaign on Multifamily, but seeking out the other two in advance of being contacted. And I've heard that others are just waiting it out to see what happens.

The information I've received shows that a community of 301-600 units will pay over $400 for this year's fee. Each year the license must be renewed. I have also been told this particular company is the least expensive of the three. That said, the end result could be quite the blow to a community's bottom line.

Has anyone faced this issue yet and, if so, how did you respond? I appreciate your time and any insight you may have.