Press Pause: Is Your Business Paying Licensing Fees for Your Daily Playlists?

If the answer is no, you may be at risk of copyright and public performance licensing violations.

Music is all around us. We are used to hearing it in grocery stores, coffee shops, nail salons, and restaurants. For a business, it can lead to happier employees and more satisfied customers, especially when a playlist creates the perfect vibe. However, if you are a public establishment and you are not paying a commercial licensing fee for the music, you could be vulnerable to lawsuits and fines. Music is protected by copyright law, and licensing fees must be paid to compensate musicians for their work and protect your business from liability.

Copyrights and Music Intellectual Property

Copyright law protects original works of tangible expression. A copyright protects the original creator from others taking their work and copying or using it for their own gain, without permission or payment. In the music world, there is a copyright for the composition of the music, as well as, the specific audio recording of the piece. Copyrights are how musicians protect and get paid for their hard work.

Why Music Licensing is Important:

Music is never free. Every song includes the work of numerous musicians, songwriters, and producers. Music organizations that register music known as performing rights organizations (PROs) manage licenses for and help collect performance royalties on behalf of its artists and producers. When PROs discover organizations using their clients' music without licensing, these companies may file lawsuits against venues and businesses that are violating their copyrights to recover licensing fees. Even if your organization is paying for a streaming service, such as Spotify, their terms and agreement specify that it is for personal not commercial use and provides no protection from copyright infringement. However, some subscription service providers are designed for businesses and do include music licensing for commercial use.

Notably, there are different levels of music licensing for commercial use. You can have a license to play music through speakers, but not live music, so even if your subscription covers the music you play for customers day-to-day, it may not cover that Wednesday Karaoke night.

Who is Required to Have Licensed Music?

Is your establishment required to have a license to play music, whether it’s live music, streaming, played through a television, or even played from a CD. Or are you exempt?

Food Service or Drinking Establishment? If your establishment’s total operational footprint is less than 3,750 square feet*, you’re exempt from music licensure if:

• You are playing music from a radio or TV station licensed by the FCC. (Note, a Spotify, Apple Music, or other streaming service does not fall under these exemptions without additional licensing agreements with the PROs.)

• Music is played on 6 or fewer loudspeakers, and not more than 4 loudspeakers are in any 1 room.

• Televised / visual broadcasts appear on 4 or fewer audiovisual devices (like televisions or monitors), with no more than 1 audiovisual device in any one room.

• No audiovisual device can be greater than 55 inches (diagonal measurement).

• No direct charge is made to see or hear the transmission or retransmission.

• The transmission or retransmission is not further transmitted beyond the establishment where it is received.

• The transmission or retransmission is licensed by the copyright owner of the work so publicly performed or displayed.

  
  

Are You a Retail, Fitness, Dance Studio, or Other Business that isn’t a Food Service or Drinking Establishment? If your establishment’s total operational footprint is less than 2,000 square feet*, you’re exempt from music licensure if:

• You are playing music from a radio or TV station licensed by the FCC

• *A spotify, apple music, or other streaming service does not fall under these exemptions without additional licensing agreements with the PROs.

• Music is played on 6 or fewer loudspeakers, and not more than 4 loudspeakers are in any 1 room.

• Televised / visual broadcasts appear on 4 or fewer audiovisual devices (like televisions or monitors), with no more than 1 audiovisual device in any one room.

• No audiovisual device can be greater than 55 inches (diagonal measurement).

Are You Any Establishment that Hosts Live Music Events? No exemption for you, unless you can demonstrate that all works performed by artists are original or are in the public domain. Works in the public domain may be used freely, without permission or payment. These are works where the copyrights have expired or been expressly waived. Most copyrights last for 70 years after the creator’s death. As a rule of thumb, music recorded before 1930 is in the public domain. However, in general, even if you are utilizing original or public domain music, the PROs may not believe you, and they will claim you need a license anyway, according to most accounts.

• *Parking lots don’t count in the square footage, but closets, kitchens, restrooms, and hallways do.

Registering Organizations:

ASCAP, BMI, and SESAC are the most common PROs that represent the majority of streaming artists. To best protect yourself you should register your business with all three organizations. The cost per year to register with all three organizations averages about $1,500/year.

Intellectual property law and licensing of music can be very complex. We recommend working with an attorney to understand what you need for your business and specific use.

DISCLAIMER: This blog post is meant for informational purposes only and does not constitute specific legal advice or create an attorney-client relationship. Readers should discuss their specific situation and considerations with an attorney.