If you own a restaurant, café, or retail shop, music is likely a big part of creating the right atmosphere for your customers. But many business owners wonder: "Do I need to pay performance royalties to play music in my store?" The answer depends on a few important factors — and understanding them can help you avoid costly fines while keeping the music playing.

What Are Music Performance Royalties?

Performance royalties are payments made to songwriters, composers, and music publishers when their music is played publicly, including music played in places of business like restaurants, cafés, and retail stores. In the U.S., organizations like ASCAP, BMI, SESAC, and GMR collect these royalties and ensure creators get compensated for the use of their work.

When You Might Be Exempt

Thanks to the Fairness in Music Licensing Act of 1998, certain small businesses are exempt from paying performance royalties when they play music through traditional radio or TV broadcasts.

You may qualify for an exemption if:

• Your restaurant, bar, or café is under 3,750 square feet, or your retail store is under 2,000 square feet
• You use a "home-style" audio system (not a commercial-grade amplifier or multi-zone system)
• You are playing music from an over-the-air AM/FM radio or TV broadcast — not from CDs, streaming services, or internet radio apps

Important: Not All Music Sources Are Exempt Streaming music from personal accounts on services like Spotify, Pandora, Apple Music, or YouTube is not covered by these exemptions. These platforms are licensed for personal, private use — not for business environments.

Similarly, playing CDs, MP3s, or downloaded playlists in your store requires a commercial public performance license.

‍

The exemption only covers free, over-the-air AM/FM broadcasts. It never covers music played from streaming services like Spotify, Pandora, Apple Music, or YouTube.

‍

‍When You Need a License

If your business is larger than the exemption size, uses a commercial sound system, or plays music from non-broadcast sources (like streaming or CDs), you will need to obtain the proper licenses.

Traditionally, this meant negotiating with multiple PROs (ASCAP, BMI, SESAC, and GMR). However, there are now music solutions that simplify the process — like Pandora CloudCover, which bundles the necessary licenses and provides curated, business-friendly music streams.

Why Pandora CloudCover Is the Best Choice Pandora CloudCover offers:

• Fully licensed, ad-free music specifically for business use
• Access to a wide range of curated stations powered by Pandora's legendary personalization technology
• Customizable playlists to perfectly match your brand's vibe
• Content controls to filter explicit language
• Easy scheduling tools to adjust music by time of day or location
• Simple, affordable pricing without complicated licensing paperwork

Why It's Worth It

Having properly licensed music not only keeps you legally protected from potential fines (which can be $750-$150,000 per song, per violation), but it also ensures that the artists and creators behind the music are fairly compensated.

Plus, professional business music services like Pandora CloudCover make it easy to deliver an exceptional experience for your customers — boosting satisfaction, loyalty, and time spent in-store.

If music is an essential part of your restaurant or retail experience, it’s important to understand your legal responsibilities. In many cases, the safest and simplest route is to partner with a licensed business music provider like Pandora CloudCover.

Still have questions? Our team is here to help you navigate your options — so you can focus on what matters most: delivering great experiences to your customers.

Ready to get started? Contact Pandora CloudCover today to learn more and elevate your business with music!

‍