What You Need to Know About Licensing Music For Your Business

Music is an integral part of a brand experience, but business owners should stream music in their establishments only if all proper legal requirements have been met.

Businesses that do not comply with copyright laws could face significant penalties. It is important for any business that chooses to play music, whether a bank, restaurant, grocery store, doctors office, etc., to understand how to do so legally in order to protect their business.

Why is it Important to Play Music Legally?

Music licensing exists so that all parties involved are appropriately compensated for their work.

Beyond the ethics of paying artists for their work, if a business does not obtain a public performance license to play music legally, there is a risk of severe repercussions, even for the first offense (this includes streaming from a personal Pandora or Spotify account).

A single playback of a song can result in a several thousand dollar fine and any associated legal fees from a lawsuit. This can seriously put a hurt on any business owner’s bank account and your business’ revenue.

The COVID-19 Stimulus Bill Included Protection for Artists

Inside the COVID-19 stimulus bill were several initiatives to boost the music industry during times when the revenue from touring was put on hold.

The bill included the CASE (Copyright Alternatives in Small Claims Enforcement) Act, the Save Our Stages Act, and the Protecting Lawful Streaming Act. The latter contains provisions that strengthen existing copyright laws by making streaming copyrighted work without the proper licensing a felony.

Copyright Law and the Role of PRO in Recovering Monetary Damages

Songwriters, producers, performing artists, and others involved in the production of a track are awarded royalties when their work is played publicly.

Copyright law protects creators and ensures that they are paid these royalties.

Under copyright law, music cannot be reproduced without proper licensing, and if music is played without this licensing, creators can take steps to recover damages. 

The Role of a PRO (Performance Rights Organization) in Recovering Monetary Damages

The PRO acts as an advocate for artists and other music industry creators by collecting licensing fees from businesses using copyrighted music.

Some of the most widely known PRO established entities include the American Society of Composers, Authors, and Publishers), Broadcast Music Inc. (BMI), and Society of European Stage Authors and Composers (SESAC).

Related Article on Usage Rights: 5 Sites to Find Royalty Free Images for Your Business

Exceptions to Copyright Laws

Any establishment that plays music for public performance must obtain legal permission to do so. Public performance is defined as broadcasting music in a public space to an audience of any number of people outside of one’s own family and friends.

For example, playing music over the speaker at a retail store would be considered public performance, while streaming music from your personal Pandora account at a backyard barbecue would not.

As stringent as copyright laws are, there are exceptions. Establishments that are exempt from licensing requirements include restaurants or bars smaller than 3,750 square feet and retail stores under 2,000 square feet, so long as the music is played quietly and patrons of the establishments are not charged any sort of fee to listen.

Smaller restaurants are exempt from music copyright issues
Image: Smaller restaurants are exempt from music copyright issues – Source

Obtaining a License to Play Music Legally

If a business does not fit within the parameters of a licensing-exempt establishment, a license to play music must be obtained.

A business can go directly to the PRO (Performance Rights Organization), however, this route is often time-consuming and costly, and limits the license holder to only music within the PRO catalog.

A more cost-effective and convenient way to obtain a license to play music is to utilize a streaming music service that takes care of  the licensing on your behalf. 

When working with a streaming music service, there are several features a business owner should consider:

  • Brand-appropriate, family-friendly music selection
  • Analog vs. digital music quality.
  • Size of the music library
  • Multi-location streaming functionality
  • Options to insert audio messages within the music stream
  • The ability to create dayparts – scheduling music or messaging for certain times of day.
  • The ability to create custom playlists
  • Easy user interface with simple reporting and monitoring
  • Remote control of the music in your establishment
  • Exemplary customer service

Ensure that Your Entity is Protected

Copyright infringement lawsuits for unlawful streaming are not uncommon. It is crucial that owners protect their businesses by only playing music with the right legal permissions. By obtaining the proper authorization, a business owner can utilize the powerful branding tool that is music.

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Mitch Bishop
Latest posts by Mitch Bishop (see all)

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