Licensing Generally

Playing music in your business setting, whether it’s a retail store, restaurant, or office, requires proper licensing.

Without it, you risk significant fines and legal actions.  Music is protected by copyright, and the owner of those rights has the right to control when, where, how long, and for what purposes such music can be played.

Playing music in your business constitutes a “public performance” of that music which requires payment of a licensing fee suitable for a commercial setting, even if you are using CDs (or other physical media), digital files, or an online streaming service that you have purchased.

If a business owner does not pay the relevant licensing fees, it is considered infringement of the copyright in each song, each time it is played, which can result in significant penalties.  

PROs

Music licensing is a complex area of copyright law.

A number of Performance Rights Organizations or “PROs” hold the rights to songs.

For each song, there are typically multiple licenses needed, including for the music and the words of the song, and for the sound recording itself, which makes securing all the rights that a business needs quite challenging.

The majority of composers, songwriters, and music publishers join a PRO, such as ASCAP, BMI, GMR, SESAC, or SOCAN, which in turn licenses their music.

Each PRO has different artists and music in their libraries, so if you obtain a license from only one PRO, you only have access to the songs and artists that they represent.

By law, PROs are required to license all of the songs they represent on the same terms to similar licensees.  For example, rates offered to businesses like restaurants, nightclubs, and bars will be the same as similarly situated businesses, depending on a variety of factors like live vs. recorded music, audio only vs. audiovisual, whether admission is charged, how often the music is played, etc.  

Licensing the necessary public performance rights on your own requires working with each rights organization, understanding and complying with their terms, paying their fees, and filing necessary formalities and reporting requirements with each.

But when you work with IO Business Music, you pay one fee to play music through our platform and we maintain the necessary licenses so that you are fully covered across PROs and can play music from any of them.

We also take care of all administrative filings and reporting to the PROs for you.  

Enforcement

Enforcement is real and the penalties can be severe.

Often business owners are not fully aware of their obligations regarding music licensing or think it’s something they don’t need to worry about.

But music licenses are strictly enforced.

This presents a significant risk to business owners, especially because of fees due in cases of infringement.

PROs take infringement very seriously and frequently have agents visit businesses across the country in search of music being played without proper licensing.  When they find an infringing business, that business often receives a cease-and-desist letter with a demand for monetary damages.

These statutory damages based on federal copyright law can range from $750 per infringed work, up to $150,000 per infringed work when the infringement is found to be willful or intentional.

These demands are serious and can stop your business in its tracks while you sort out the conflict and pay hefty fees to resolve it.

It is best to obtain the license you need upfront so that you don’t have to worry about substantial penalties later. 

Exceptions

Copyright law provides for a limited number of narrow exceptions in which licensing music is not required for certain public performances of music in “food service or drinking establishments” and retail establishments by means of radio and television transmissions.

These exceptions are determined by factors such as square-footage of the business, how many speakers are used in the case of audio only music or displays are used in the case of audiovisual music, and in both cases, how many rooms or adjoining outdoor spaces the music reaches.

Unless your business meets the narrow criteria exempting it from a license, you need to obtain a license.

 There are other circumstances that dictate a need for additional or different licenses.

For example, the music for business license discussed above may not be for you if you:

·       Charge admission to your business

·       Play live music at your business

·       Play music at your yoga studio

·       Use a jukebox at your establishment

Each of the above scenarios requires different music licenses which are not covered by the music for business license offered by IO 4 Business.

The music licensing information on this page is for information purposes only and does not constitute legal advice. Any business assessing its obligations regarding music licensing should seek advice of its own legal counsel.