Music Licensing for Your Business is a Breeze with Performing Rights Organizations

Music plays a key role in creating the right ambience for your business that keeps customers coming back. But it is important to know that under federal copyright law, when copyrighted music is performed in any establishment, permission must be granted from the copyright owner. When a songwriter writes a song, they should get paid for the commercial use of their music, and federal copyright laws have established that right.

It isn’t practical or feasible for a business owner to negotiate licensing rates for every individual songwriter for the right to publicly perform their music. That’s how performing rights organizations (PRO) can help.

Retail, hospitality and other establishments license with PROs for the right to play the music that they represent. Each PRO exclusively represents different writers, so if you use a range of popular music in your business, you may decide you need to get a license from the four major PROs: ASCAP, BMI, SESAC and GMR.

Here are some of the most frequently asked questions about music licensing.

Q: Do I need a music license for music playing in my business?
A: You might, depending on the type and size of your business, and how the music is transmitted.

Q: Who issues licenses for businesses to play music?
A: Federal copyright law (Title 17 of U.S. Code § 101) specifies that “performing rights societies” license the public performance of nondramatic musical works on behalf of the copyright owners they represent. The law specifically mentions ASCAP, BMI and SESAC as PROs that have been licensing businesses for decades. More recently, GMR has also entered the scene.

Each PRO offers music licenses that authorize the public performance of music represented in their catalog whether it is by a live band or by mechanical or audio-visual means, such as:

DJs, records, CDs and Digital Service Providers

Radio-over loudspeaker systems

Karaoke machines

Jukeboxes, in certain circumstances

Each PRO holds licensing rights for different songwriters and composers, so a business will likely need to be licensed with all four PROs (ASCAP, BMI, GMR and SESAC). For some context, BMI and ASCAP are the largest PROs and collectively represent more than 90% of music performed on domestic radio and streamed online. SESAC and GMR collectively represent nearly all the remaining 10% of music performed on domestic radio and streaming services.

Exemptions

Q: Are any businesses exempt from paying licensing fees?

A: Exemptions apply in some cases when music is transmitted via radio or TV ONLY. The business must also not charge admission or a cover fee. Here are some additional requirements for an exemption:

Eating or drinking establishment

Less than 3,750 gross square feet of interior space and exterior space (not counting the parking lot)

3,750 gross square feet or more if (1) they play no more than four televisions that are up to 55 inches diagonally, no more than one per room, with no more than six speakers total, and no more than four speakers per room, or (2) they play radios that have no more than six speakers total, with no more than four speakers per room

Retailers other than eating or drinking establishments

Less than 2,000 gross square feet (not counting the parking lot)

2,000 or more gross square feet of space (not counting the parking lot) and:

The performance is by television with no more than four TVs, no more than one per room, each measuring no more than 55 inches diagonally, with no more than six speakers in total, and no more than four speakers in any one room or adjoining outdoor space -or-

The performance is by radio and is communicated by no more than six speakers in total,

Record stores

When the sole purpose of the music performance is to promote the retail sales of copies or records of the work, the performance is open to the public at no charge, and the performance is within the immediate area where the sale is occurring then a music license is not needed.

Certain nonprofit organizations

Musical performances at a social function organized by a nonprofit veterans’ organization or nonprofit fraternal organization to which the general public is not invited, and proceeds from the performance are used exclusively for charitable purposes are not licensable.

Radio music
Q: If I have a radio station playing over a speaker system in my business, on my phone system, or just in my office and nowhere else, am I required to be licensed?

A: If you are playing a radio over a speaker system, you may need to be licensed, depending upon the number of speakers in the system and how many speakers you have per room of your business.

Playing a “homestyle radio” or music from a digital service provider (DSPs) such as Apple Music, Amazon Music, Pandora or Spotify are not licensable as long as you are only performing the music in your office and only you and your employees can hear the music.

It is licensable if you play CDs, DSPs, or records over a homestyle system in areas of your business accessible by the public.

Using a radio station for “on-hold music” on your phone system is licensable.

Music subscription service
Q: Do music subscription services pay the licensing fees?

A: Some subscription services include the license fees; check your agreement to see if the fees are included. Licensing fees included in a subscription service only cover the recorded music the service supplies to you. They would not, for example, cover live performances.

Performers, entertainers

Q: Are the musicians, DJs and entertainers I hire responsible for obtaining the necessary music licenses for their public performances?

A: Since it’s the business or organization that’s benefiting from the performance of music, the owner of the establishment must be properly licensed. This responsibility cannot be passed on to anyone else even if the musicians hired are independent contractors.

PROs Track Music Use in Businesses

Q: How will a PRO know if I play music without paying licensing fees?

A: It isn’t difficult to find out if a business plays music. PROs have representatives whose job is to identify businesses that are publicly performing music and ensure they are licensed. It can be as simple as a phone call to your business or checking websites and social media accounts for events advertising music.

More information