The right background music is a proven technique to help a business thrive. But many business owners don’t realize that playing their personal Spotify or Pandora playlists for their customers is in direct violation of well-established copyright laws. Obtaining the right music licenses is critical to avoid hefty fines from rights holders. So, what should business owners know to avoid getting in trouble with copyright laws? This guide should help you get started.
Copyright Law
Music is protected by copyright law. The law is in place to protect the performing artist, producer, and songwriter/creator and signifies that the music cannot be reproduced. Any time a song plays publicly, the creator earns royalties. If appropriate permission has not been granted (through a license to play said music), the creator can recover damages for the song’s illegal reproduction. Essentially, the music has been stolen. This means that playing your personal Spotify or Pandora accounts in a place of business is illegal.
The artist will collect royalties or recover monetary damages with the help of a PRO (Performance Rights Organization). The PRO advocates for musical creators by collecting and distributing license fees from businesses that play licensed music. There are several established PRO entities, the most widely known include BMI (Broadcast Music, Inc), ASCAP (American Society of Composers, Authors, and Publishers), and SESAC.
The Importance of Playing Music Legally
Why go through the effort to obtain a license to play music legally? To ensure that everyone involved in the creation of the music is compensated appropriately. A PRO confirms that this is the case. If your business does not secure a license, you could be looking at severe financial consequences or worse. Even the playback of one song can result in a fine of several thousand dollars. Additionally, the COVID-19 stimulus bill passed in December 2020 contains further provisions that made the streaming of copyrighted work without proper licensing a felony.
How to Obtain a License
There are different ways to obtain a license to play music within your business legally. The first is to go directly to the PRO (Performance Rights Organization) to secure a license. Unfortunately, this method can be quite expensive and time-consuming. This also leaves you with a limited music selection as your business can only play music within the PRO catalog.
An alternative is to utilize a streaming music service that takes care of the licensing for you. Many businesses find this option more affordable and convenient than navigating the complex process on their own.
Exceptions to the Rules
All establishments are required to obtain legal permission to play music. You may feel your business is an exception to the rule as you do not play music as a “public performance.” This term’s legal definition is the broadcast of music in a space open to the public to any given number of people outside of one’s social circle.
There are, however, real exceptions to the copyright law enabling individual businesses to play music legally without a license. The criteria for these situations are the following: a restaurant or bar smaller than 3,750 square feet and retail stores under 2,000 square feet can play music only if played quietly, and patrons are not charged a fee to listen.
Legally Streaming Music in Business Establishments
Unless your business falls under the exception above, you must procure legal permission to play music in your place of business. A streaming music service is often the best choice for a busy business owner looking to keep license costs low. After you have determined the need for a music service, there are several features you should look for:
- Digital vs. analog music quality
- A large music selection. A good streaming music service should have licenses with multiple PROs to give you the broadest selection.
- Music that matches your brand. Music can contribute significantly to your brand loyalty, yet it must be cohesive with your identity. Look for a vendor that can help you customize a playlist or station to your brand.
- The ability to mix your own playlists with an easy-to-use app
- Local or remote (HQ) control of music
- Enterprise features for controlling, monitoring & reporting
- The ability to scale from 1 to 1,000 locations at the same time
- The ability to insert audio messages into the music stream
- Great customer support from the vendor. You can visit sites like Trustpilot.com to see what other customers are saying about the vendor.
Protect Yourself and Stream Music Legally
Whichever approach you elect to obtain a license for your business, ensure that you are protected. Music copyright infringement lawsuits are not uncommon and can significantly impact your bottom line. By legally playing music in your storefront, your employees, customers, and the artists behind the music will simultaneously thank you. If you work with the right vendor, they can help you customize the music to your brand, which will help your top line.
