I am grateful to Tom Bliss for his lucid and patient explanations of his views. However,over here in Germany, the situation is similar to the one Stallion describes. Most small venues nowadays simply refuse to use musicians, who claim GEMA royalties. They simply can't afford to pay. In particular, musicians, who play their own music, are a considerable risk to those landlords and cafe´owners, because songwriters are more likely to deter regulars from attending than they are to draw people in. So the venues are taking a considerable risk in allowing live music anyway. What they usually do is to make the musicians accept the responsibility for being the "Veranstalter" (organiser) of the gig. This puts the onus on us to apply for and pay for the GEMA licence. In reality, I have never done this, although last summer I actually had to sign a contract, which bound me to accept the responsibility. So far I have not been caught - and I feel I am harming no one. We play original material anyway.
I can see the landlords' point of view. They are already doing us a favour by taking a chance on us. The entrance money alone is enough to put the backs up of those, who would usually enter the premises for no charge. In addition to that, not many people are prepared to go to their local pub/cafe´when live music is on, because quite simply, they do not like live music.
To date my own band has been fortunate, in that we have attracted good audiences and we have filled the venues. However, I think it would be a little cocky for us to expect landlords to start gambling with their livelihoods on our behalf. These days I am grateful for the chance to play at all!