Most public spaces have the radio or a playlist softly playing music in the background. If you are using a personal Spotify or YouTube account to play music or are just playing the radio in your business, you are violating copyright law.

Restaurants, spas, coffee shops, bars, and retail stores are some of the spaces that are required to have a commercial music license to stream music that is not of the public domain. 

WHAT KIND OF LICENSE IS REQUIRED?

There are three Performing Rights Organizations (PROs) that issue music licenses to businesses: ASCAP, BMI, and SESAC. These organizations have agreements with songwriters, composers, and music publishing companies to pay royalties for the songs played by issuing licenses to businesses that play their music. The PROs issue a license to the business for an annual fee. 

DOES MY BUSINESS REALLY NEED A LICENSE?

If your business is a food service or drinking establishment that is over 3,750 square feet. You must get a commercial music license. If you run a business other than food service or providing beverages, you must have a commercial music license if your business is over 2,000 square feet.  

ARE THERE ARE EXEMPTIONS?

Yes, if you aren't a restaurant or bar and your establishment is less than 2,000 square feet, you do not need a commercial music license. If you are a restaurant or bar and are less than 3,750 square feet, you do not need a commercial music license. 

If your restaurant or bar is over 3,750 square feet, you do not need a license if you pay classical music written before 1922. This music is public domain and not subject to licensing. If your restaurant or bar is over 3,750 square feet, you do not need a license if you play the radio with six or fewer speakers and no more than four speakers in one room. 

You also don't need a commercial music license if you hire local musicians to play their own music. If the live music features cover songs, though, you will still need a license.

WHY DOES IT MATTER?

Violating copyright law by not paying artists the royalties they are entitled for streaming their music opens you up to penalties for not having a commercial music license. 

The penalties for copyright infringement are between $750 and $30,000 per infringed work plus attorney's fees and court costs. 

An annual license to one of the PROs is around $1,000. Certain streaming subscriptions in the name of the business take care of music licensing costs for you so that you do not have to obtain a commercial music license such as Sirius XM or Pandora for Business. The most important thing is that your subscription is in the name of the business. 

Employees for the PROs are continuously scouting YouTube, Spotify, and businesses covertly to determine whether copyrighted works are being played without a license. They then send a demand letter to the business for thousands of dollars for violations of copyright law. 

Set your business up for success by not getting slammed with ridiculous penalties. If you are playing music in the background of your business, it is important to either obtain a commercial music license or make sure you meet one of the exemptions in the Fairness in Music Licensing Act of 1998. 

Business Law Group is here to help your business in all areas of legal compliance, from employment issues to licensing.