Luckily, it’s not difficult to set things right before that happens.
Music is copyrighted and commercial use of music as background in your business is subject to licensing.
If you play music in your public business building, according to law you must have a license to do so. As crazy as it seems, even playing the local radio station on your radio can get you in trouble without being properly covered through a service in certain circumstances.
Restaurants, stores, mechanics, doctor’s offices, and every other commercial space is subject to this law. There are over 40 million small businesses throughout the country and only a small percentage are licensed to play background music in their commercial space.
Your task as a business owner is to ensure all songs played are 100% legal and licensed for commercial use.
Pfft! The local radio station & streaming service I use takes care of that.
Actually, they may not. Radio and TV have broader licensing under the Federal Trade Commission, but there are other conditions to consider. (More on this below.)
Believe it or not, there are individuals who have the job of touring commercial properties to find offenders and subject them to possible expensive lawsuits from music licensing organizations.
Copyright laws were put into place to ensure that music streaming services pay fair royalties to the artists for the use/broadcasting of their musical work.
The good news: there are exemptions and you may qualify.
How do I know if I qualify?
The Fairness in Music Licensing Act of 1998 may be your friend if you’re a business under a certain size. If your business is small enough to qualify (in size of square footage), you can play background music without licensing under these conditions:
- You only play music from a radio or TV. (No CDs, MP3s, or iPODs)
- Your business has less than 4 loudspeakers or TVs in any one room, and less than 6 loudspeakers or TVs total.
- You do not charge customers to listen to the music via a cover charge or other means.
Note: This is NOT official legal advice. Please refer to the references on this article to make an informed decision on whether or not you need a licensed music service. Seek legal counsel for more assurance.
You can find a breakdown of the Fairness in Music Licensing Act of 1998 by going here. https://cyber.harvard.edu/is02/readings/17usc110.html
If you’re unsure about whether or not your business is exempt under the above conditions, we suggest seeking legal advice from your lawyer to make sure. Don’t rely on ignorance—that can become very expensive. Being informed is your best defense.
If your business exceeds the square footage allowances in the exemptions, you may still need licensing even if you only play the local radio station. It’s best to get a legal professional to validate your exemption status if there’s any doubt whatsoever.
What about live music?
- If live musicians are playing copyrighted music, you are required to obtain music licensing.
- Unless the musician plays 100% original music, you are responsible for all licenses. Not the performers.
How would they know if I’m playing music without the proper licensing?
PROs hire individuals to visit establishments and spend time documenting what songs are played. When they discover you’re playing songs protected by that PRO they report these back and the process to collect from you begins.
What if I’m contacted with a demand letter for payment?
Don’t ignore it! Consult with your attorney right away and take measures to rectify the situation. They won’t back off and they will get more and more demanding if you try to ignore them.
What does music licensing involve?
There are three Performing Rights Organizations that handle licenses. You need to be licensed by all three.
For details on their licenses see the following links:
How to be compliant if you need licensing.
- For complete control of what you play via your iPOD, MP3 player, or CDs, obtain a license from all three PROs.
- If you just play background music, choose a recommended business streaming music service that takes care of all the licensing for you. Research your choices wisely and make sure you’re NOT streaming the consumer version. You want the business version that states it includes all the PRO fees.
Creating the right ambiance in your business motivates visitors to make a purchase and encourages repeat sales. Protect yourself—and your sales—by making sure you’re compliant with all music licensing laws before you receive a demand letter from a PRO that can result in several hundred to thousands in dollars.
Written by Diana Cacy Hawkins of Espresso Shot Marketing using multiple resources. This article is not legal advice and Diana strongly recommends doing your own research for your business and seeking legal counsel as needed to help you understand your business responsibilities. Diana Cacy helps businesses formulate improved marketing strategies for a stronger future in this constantly changing landscape.