Top 12 Licensing Questions: How to Play Legal Business Music

One of the biggest challenges business owners and executives face is time – there’s never enough to get it all done. We understand that researching the ins and outs of music licensing is very time-consuming (and quite confusing).

You're wondering, "How can I play music in my business legally?"

That’s why we took the time to answer some of the most common questions business owners ask about legally playing music in your business.

Key Points

• You cannot play music in your business without a license in most cases.
• You can’t use Spotify, SiriusXM, Apple Music, or another personal streaming account to play music in your business.
• You need a commercial streaming account, designed for business use, to legally play music in your business.
• If you play music without a license, you can face steep fines and legal action.
• You can legally play background music in your business for a reasonable monthly fee with a commercial streaming service like Pandora CloudCover.

Glossary of Terms for Music Licensing

A lot of legal jargon is used when talking about music licenses. Here are some of the key terms to know:

• License: This contract allows you to legally play a particular work (song) in your business, and you pay a fee for this right. You don't own the song, but you own the right to play it for a specific period.
• Performing rights organization (PRO): PROs represent artists (songwriters, composers, and publishers), ensuring that they are paid for use of their work. The major PROs include BMI, ASCAP, SESAC, SOCAN, and GMR.
• Commercial streaming service: With these commercial services, you can legally play music from their large libraries in your business for a monthly or annual fee. These services cover licensing for you, so you don’t have to negotiate with each PRO yourself.
• Public performance: This occurs any time you play music in public with an audience that includes people outside of a standard circle of friends and family. If you play music in your business, this is considered a public performance.

1. Can I legally stream Spotify, Apple Music, Tidal, SiriusXM or Pandora playlists as background music in my business establishment?

We hear these questions all the time:

• "Can I play Pandora in my business?"
• "Is it legal to play Apple Music at work?"
• "Is it acceptable to use Spotify for my business?"

The simple answer is... no. In business terms, music streaming services come in two forms — B2C (Business to Consumer) and B2B (Business to Business). It isn't legal, for example, to play clean music from your personal Spotify account in your business. You can't use Spotify for hotels or use Spotify for retail stores. However, having a Pandora for Business or the equivalent of Spotify for business (Soundtrack Your Brand) account would be an appropriate business solution as it would include a commercial music license. The Spotify commercial license has a Spotify for Business cost of $39.00 per month for the base plan through Soundtrack Your Brand. The core music streaming services offered by companies like Spotify, Tidal, SiriusXM and Pandora, are all B2C — built for consumers, not to soundtrack your business. The licensing Pandora, Spotify, and other B2C services provide aren't suitable for commercial use.

This means they are licensed for private, non-commercial use (perfect to use at home with your friends & family). You need a Public Performance License (PPL) to play music in public places, including to your customers and employees.

Don’t worry! In this article, we’ll teach you the easiest ways to obtain this commercial license to play music in public in a business.

Having a Pandora for Business or the equivalent of Spotify for business (Soundtrack Your Brand) account would be an appropriate business solution as it would include a commercial music license.

2. Is it legal to play purchased iTunes music on my iPod/iPad/iPhone, CDs, MP3s or digital files for background music?

It is common in our digital age to be confused as to whether we own our digital content.

When you pay to download music or even movies for that matter, you are essentially purchasing a license; you are leasing the content. Furthermore, you may only play this music in a non-commercial setting. You can listen to the songs yourself as much as you like, but it is illegal to play in public.

Playing the downloaded music in your business, however, would violate copyright law because the act is now considered a public performance. You must license music for commercial use. Public performances require a Public Performance License (PPL) from performing rights organizations (PROs).

3. How can I get the licenses for playing music in a business? What are the BMI and ASCAP license fees?

There are four main performing rights organizations that songwriters, composers, and publishers join in the US & Canada—ASCAP (American Society of Composers, Authors and Publishers),  BMI (Broadcast Music, Inc.), GMR (Global Music Rights), and SOCAN (The Society of Composers, Authors and Music Publishers of Canada).

You may have searched for answers to questions like these: How do I license music for commercial use? Do I have to pay ASCAP license fees? Do I have to pay BMI license fees?

You must obtain a legal license in order to stream music at work. You can do so in a number of ways, such as by using a company that pays for those public performance licenses, like Pandora CloudCover. When you, as the business owner, acquire a license from a certain PRO, you can legally play the music from only that PRO's catalog in your business. Acquiring these licenses can be costly and the subsequent monthly compliance reports can be time-consuming to complete and submit. To determine which license your business may need and the potential fees, navigate over to these pages:

The United States

• ASCAP Music License Agreements & Reporting Forms
• BMI Music Licenses for Business Establishments
• GMR Music Licensing FAQ

Canada

• SOCAN Tariffs & Forms

To outline how much a PRO license might cost, let’s examine BMI. This PRO offers several different licensing options by business type. They include the following:

• Hospitals: $5.77 per bed or $590 per year for the facility 
• Hotels: $422 to $1,062 per year (more if you charge admission or have music shows) 
• Retail: $294 to $2,515 per year (for audio only)

As these examples make clear, the cost of playing music can vary dramatically when you work with a PRO. 

This table can help you understand the different PROs and how they work.

Companies like Pandora CloudCover can also offer access. For less than $17 per month, you can tap into music from the artists you love and play pre-programmed channels made just for business. All background music licensing fees are included.

4. How much does it cost to license music for my business?

There are several ways to obtain the public performance license necessary to play music in a business. The route you take will depend on your specific needs and budget.

• Option 1: Traditionally, businesses have had to work directly with each of the major Performing Rights Organizations (PRO) to negotiate license fees. This option can cost in excess of $2000 per year and requires a considerable amount of effort.
• Option 2: You can subscribe to a streaming service — like Pandora CloudCover — to obtain blanket music licenses for businesses offered by major PROs for a convenient monthly subscription fee. Pandora CloudCover starts as low as $16.95 per month when prepaid annually.

5. If my business is licensed with one performing rights organization, do I still need to get licensed with the others?

If you're looking to play a wider variety of popular music in your business, we highly suggest licensing with all the PROs. A music license with a performing rights organization only allows you to perform copyrighted music represented by that organization.

The music industry is quite complicated when it comes to licensing. Many songs often have multiple songwriters, composers, and publishers, each of which may belong to a different performing rights organization. Since the creators and owners of the songs are represented by different PROs, assuring that the music you choose to play in your business is legal can get tricky! This why we recommend playing it safe by getting blanket licenses that cover major PROs.

For example, check out the PRO licensing affiliations of Earth Wind & Fire’s “September”.

“September” has songwriters and publishers represented by both ASCAP and BMI. More recently, pop and hip hop songs are increasing in the number of credited songwriters. There can commonly be over ten different songwriters, composers, and publishers!

To see each organization's public music repertoire and properly assess which ones you should be licensed with, visit these repertoire listing pages:

The United States

• ASCAP license repertoire
• BMI license repertoire
• GMR license repertoire
• SESAC license repertoire

Canada

• SOCAN license repertoire

6. Are there any exceptions where I don’t have to pay business music licensing fees to the PROs?

If your business is broadcasting live music, karaoke, CDs, digital files, or DVDs, then you generally have to pay to use music for retail stores or in your business.

There are a few exceptions when it comes to playing music originating from the radio or TV, but please take note that the following exempt businesses cannot directly charge their customers to see or hear the music originating from the radio or TV, nor can the music be transmitted beyond the business establishment.

Most importantly, the music coming from a radio station or TV channel must be broadcasted by the FCC (Federal Communications Commission). This limited selection can make it harder to control your music selection or music library.

These two types of exempt businesses are:

• Food service or drinking establishments (a restaurant, inn, bar, tavern, or any other similar place of business in which the public is being served food or drink) with a.) less than 3750 gross square feet of space, or b.) with 3750 gross square feet of space or more, and less than 6 loudspeakers (no more than 4 loudspeakers per room) and less than 4 televisions (1 per room) with a diagonal screen size greater than 55 inches.
• Other establishments (e.g. a retail store, office, etc.) with a.) less than 2000 gross square feet of space, or b.) with 2000 or more gross square feet of space and that satisfy the same loudspeaker and television set requirements as for food service or drinking establishments (see above).

For more information, check out Section 110(5)(B).

7. What constitutes music copyright infringement?

By law, the copyright holder maintains exclusive rights to reproduce, distribute, display or perform protected music, or to make derivative works.

When you, as a business owner, decide to play unlicensed music publicly without permission, you are committing copyright infringement and can be held liable for damages of up to $150,000 per song played.

8. What happens if I stream music in my store without paying for licenses?

We are asked this sort of question all the time: Do I have to pay ASCAP? Do I have to pay BMI?

To publicly perform copyrighted music in your business establishment, you are required to obtain permission from the copyright owner or representative (visit Copyright Law of the United States for details).

Per Section 504 of U.S. Copyright law, copyright holders can sue those who use music without permission. Fines are set by the courts. You can be held liable for damages from a minimum of $750 up to a maximum of $150,000 per song played.

Recently, for example, ASCAP filed 10 legal actions against bars and restaurants across the United States. While the average cost for these establishments to play music amounts to $2 a day, they refused to pay the fees owed to perform the copyrighted musical works of ASCAP's songwriter, composer, and music publisher members and were sued accordingly. The full list of businesses can be found here.

Every year, BMI sues approximately half a dozen businesses in New Jersey alone for playing one of the songs in their repertoire of 8.5 million without a license. Amici III Ristorante didn’t have permission to play Rolling Stones' Brown Sugar, Elton John's Bennie and the Jets and Your Song, and Amy Winehouse's You Know I'm No Good, and the restaurant was thus fined $24,000 ($6,000 per song).  

Costs and resentment can quickly mount for businesses that are sued, so we highly recommend finding an economical, licensed music solution as soon as you can.

9. Do DJs or live bands need to pay for music licensing?

In short, no. The business (venue) owner is almost always liable for acquiring music licenses, no matter the type of entertainment; even if they are hiring others to come in and play music. Bands, disc jockeys and karaoke jockeys do not have the option to purchase public performance licenses from PROs unless they are also a producer or event promoter.  

It is also important to note that licensing requirements change if you charge admission to an event where music is played as entertainment.

Learn more about requirements and exemptions.

10. How do I get music licensing for live streaming?

Music can elevate any setting and can often be heard in the background of live streams. The type of license you'll need will be contingent on the type of stream you or your business would like to host.

Here are the top three types to consider:

• Video streams (i.e. YouTube, Facebook, Instagram Live, or other online video): Most popular live-streaming video platforms are licensed by the PROs (ASCAP, BMI, SESAC, and Global Music Rights). This means that if you're streaming a song from one of their catalogues, you will likely be covered when it comes to securing a synchronization license. If the song isn't part of their music repertoire, you'll need to get permission from the copyright holders to perform the song.
• Interactive audio streams (i.e. Spotify or audio-only streams): Songs played in this setting require a mechanical license and public performance license (PPL). Major music streaming platforms will normally handle the mechanical license as blanket licensees, but when in doubt we recommend checking your streaming service's terms.
• Non-interactive audio streams (i.e. Pandora, SiriusXM, or traditional radio): This music requires a public performance license, but not a mechanical license. The PPL is normally handled by the platform, but we recommend checking with the PROs (ASCAP, BMI, etc.) to be sure.

For more details on copyright music for live streaming, YouTube, film, and more, please visit Easy Song Listening.

11. What's the most affordable legal background music solution for my business?

Music is vital to attracting customers and driving revenue, but we recognize the fact that most businesses work with a set (potentially limited) budget.

Many companies turn to B2B music services for cost-effective and licensed music to stream as background music at their business locations. Subscriptions for business music and retail radio solutions will generally range from $17 - $40/mo per location and these services for businesses will normally handle the music licensing paperwork on your behalf. Just to make sure you’re covered, we recommend asking your provider for letters of license verification.

Pandora CloudCover is a legal business music streaming service starting from $16.95/mo (when prepaid annually) with access to all of our music.

Start With a Free 14-Day Trial. Terms and conditions apply.

12. Why should you protect an artist’s rights?

Singers, songwriters, and publishers have the legal right to ask for money when you want to use the products of their creativity. Yes, it’s a hassle to get access to a license, and no one wants to pay fees. Why should you do so?

According to research gathered by Rolling Stone, musicians only take home one tenth of national industry revenues. Big-name artists like Cardi B grab most of the payouts, and arguably, they may not need the money from a small license contract. However, newer artists may need every dollar they can get. When you don’t pay for a license, they get nothing at all.

More questions?

Feel free to ask any more questions about streaming music in your business in the comments section below or via our Live Chat tool. We are here to help you learn everything you need to know to feel confident when you play music in your business.

Frequently Asked Questions About Business Music Licenses

In addition to the above, we also hear these frequently asked questions about business music licenses:

Can I legally play music in my business?

Yes, you just need the appropriate licenses. You can negotiate with each PRO directly, or you can subscribe to a commercial streaming service.

Can I use any music in my business without a license?

Yes, but your selection is limited. You can play music in the public domain, music with a Creative Commons license, royalty-free music, or music you create yourself without a license.

Can I play CDs in my business?

Not without proper licensing. When you buy a CD or a digital song, you don’t own the song. You simply own the right to play the song for personal use. If you intend to play it in your business, you need to secure a different type of license.

What is the easiest and cheapest way to play music in my business?

Commercial streaming services fully license their libraries of music. If you subscribe to a music-for-business service, you can play anything from the provider’s library as background music in your business. At Pandora CloudCover, we offer clients a robust library of ad-free music, as well as other services, for a low monthly subscriber fee.

References

Music Users. BMI. 

‍How Musicians Make Money — Or Don’t at All — in 2018. (August 2018). Rolling Stone.