Royalty Free Music and Performance Rights: Legal Issues

Paying the Piper: Music Licensing for Business Owners
Legal Issues with Playing Music in Your Store or Restaurant

Do you own a retail store, restaurant, hotel, bar, or coffeeshop?If so, you probably rely on music to create an pleasing and distinctive ambience. But whether you’re playing royalty free music from Productiontrax, hosting live music nights, piping in satellite radio, or just putting on CD’s from your personal collection, you need to know a little about music licensing for businesses- specifically, how can you avoid paying if you don’t need to? And how can you know if you’re breaking the law?

Music composers and songwriters own the “public performance rights” to songs they create, and they are the only people legally allowed to play their songs in public or in places of business. Instead of negotiating this right personally with every establishment that wants to play their songs, most composers join performing rights organizations (PRO’s). So instead of contacting Bruce Springsteen directly to get permission to leave the radio on when “Born in the USA” comes on in your bar, you can pay a blanket fee to ASCAP and be authorized to play not just Springsteen but also music by Stevie Wonder, Duke Ellington, and 320,000 other composers.

In the United States, most composers belong to one of three behemoth PRO’s: ASCAP, BMI, and SESAC, and most businesses that rely on radio purchase licenses from both ASCAP and BMI. Most Canadian artists use SOCAN, and other countries have their own PRO’s. Many composers on Productiontrax belong to a PRO and list it in their profile. Productiontrax music licenses cover synchronizing their music with other media such as video. To play a royalty free music track from Productiontrax in a business, theater, or othe venue without being synced with video, you may need to have a blanket license from the composer’s PRO.

It’s important to make the distinction between multimedia producers and venue owners. Typically, performance rights blanket licenses are paid for by venue owners (people who own theaters, restaurants, stores, and broadcasting networks), not by producers of multimedia projects.

But wait, you may be saying, I’ve never paid for a music license before. Well, you may be about to get sued by BMI. (Yes, the major PRO’s do conduct regular “busts” of businesses that don’t pay their fees.) But don’t panic — you may also be exempt. The 1999 Fairness in Music Licensing Act amended the copyright law to exempt businesses from paying for public performance rights if:

• The only use music from licensed radio, television, cable, and satellite sources

• They do not re-transmit the music beyond their establishments

• They do not charge admission


• They are smaller than 3,750 square feet (for restaurants, bars, and grills) or smaller than 2,000 square feet (for other retail establishments)


• They have six or fewer speakers, no more than four speakers in one room, no more than four TVs, no more than one TV in each room, and no TV with a diagonal screen length greater than 55 inches.

(Also, stores that sell AV equipment and recordings like Best Buy and independent record stores (the few that still exist) are exempt, and jukeboxes usually come with the necessary licenses.)

So if you run a small one-room coffeehouse with four speakers, you can keep the radio on without purchasing a license for the music. But if you play CDs or mp3s, host karaoke nights, or have performances by DJ’s or bands that play covers (including jazz jam sessions, which almost always consist of covers), you’re legally required to have a license for that performance. If you’re not exempt from pay for music licensing but want to save money, check if your local restaurant and beverage association offers discounts for ASCAP and BMI blanket licenses. Also, be aware that live performance may incur slightly higher rates than simply using radio and TV broadcasts.

We should note that also carries royalty free music from composers who are not members of a PRO, and offer their music free of public performance royalties.

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