As a business owner, you are responsible to ensure every manager and location within your business adheres to music licensing regulations.
This is especially important when managing a multi-location business. Legal nuance and license requirements can complicate things quickly. With music being so easily accessible through free streaming services, managers within the organization may violate copyright law without even realizing it.
Common Questions About Streaming Music in a Business
1. Can I use free streaming music services such as Apple Music, Spotify, or Pandora to play music in a business?
In short, no. While these services are great for personal use while you’re at home or in your car, they are only meant for private consumption.
This is because services like Spotify and Tidal are B2C, not B2B. As a result, there are different rules that individuals and businesses have to follow when they want to enjoy music.
Unless you have a business-specific plan, songs on streaming platforms are generally licensed for single use. You need to purchase a public performance license (PPL) to play songs legally in your business locations.
2. Can I play music that I purchased and downloaded from iTunes or CDs in my business?
No. Purchasing MP3s and CDs does not constitute “ownership.” When you purchase an MP3 you’ve only bought a copy of the original work, and you do not automatically receive a public performance license along with your download. In fact, purchasing an MP3 is closer to “leasing” the song than owning it.
3. Are there exceptions or exemptions for music licensing requirements?
Title 17 (Copyrights) Section 110 of the U.S. Federal Code details exemptions to copyright infringement. This section notes exceptions for educational, training, instructional, and religious use in addition to the narrow exemptions for business owners.
As it pertains to businesses, this section states that a business with less than 2,000 gross square feet (3,750 for restaurants) may play radio or television, where copyrights are covered by the broadcasters.
Business locations with more than 2,000 gross square feet may also play radio or television without a public performance license as long as that location does not have more than a total of six speakers, of which not more than four speakers can be located in any one room or adjoining outdoor space.
4. Do I need a music license to host a live performance at my business?
Businesses are required to purchase public performance licenses for any live performance of music that is protected by copyright law. This generally includes cover bands and karaoke performances.
A public performance license is not required if the event is a private function like a birthday party or wedding, or if the music performed is original work, “traditional” music, or considered in the public domain.
5. How do I legally stream music in a business?
Businesses will have to obtain a public performance license for every song that is played within earshot of customers. This may require you to negotiate agreements with performing rights organizations (PRO) or subscribe to a service that obtains these licenses for you.
In the United States and Canada, the main PROs are ASCAP (American Society of Composers, Authors and Publishers), BMI (Broadcast Music, Inc.), SOCAN (The Society of Composers, Authors and Music Publishers of Canada), Re: Sound, and Sound Exchange.
Complying with music licensing laws in the United States and Canada goes a step beyond a single public performance license. To make sure you are working within the law, you’ll need to acquire different licenses based on how you will use the music.
Public performance licenses will protect your business legally if you are streaming music on location. However, if your business plans to use a song alongside training material, a presentation, or advertising, you’ll need to acquire a synchronization license.
6. How do I obtain music licenses from performing rights organizations?
You could negotiate licensing agreements with each PRO and acquire a public performance license (PPL) for their catalog, or you can subscribe to a service. The service negotiates more favorable deals for subscribers, so you’ll generally pay much less than you would on an individual PPL basis.
Dealing with PROs on a one-on-one basis can be complicated, especially when licensing popular music.
Because many popular songs have multiple songwriters and producers, rights can potentially be held by multiple organizations. In which case, you’ll need agreements with each of the associated PROs.
Often, it is more cost-effective for businesses to purchase “blanket licenses” that cover catalogs from multiple performing rights organizations.
Pricing for a blanket license is dependent on a number of factors, including these:
- The type of business
- How music is performed, such as live or recorded
- The size of your establishment
- The number of locations
7. How do I avoid fines when working with performing rights organizations individually?
When you acquire a public performance license or blanket license from performing rights organizations, you must file monthly compliance reports as evidence of proper use.
Potential fees, licenses, and monthly obligations are outlined in the resources below:
The United States
- ASCAP Music License Agreements & Reporting Forms
- BMI Music Licenses for Business Establishments
- Sound Exchange Licensing 101
Canada
While establishing and maintaining systems and processes to play music in your business legally can be time-consuming, it’s only a portion of compliance. Music licensing is an ongoing compliance issue that is affected by every member of your organization, so there are a few steps you need to take in order to avoid penalties for music streaming.
First, you’ll need to educate members of your organization on common misconceptions and what is not allowed. For example, all employees need to be made aware of the fact that using streaming services or even downloaded MP3s as background music in the business is not allowed. There also needs to be a distinction made regarding music that can be played on its own in the business and songs that can be added to visuals such as presentations.
Next, you’ll want to make sure you have the proper blanket licenses, so you don’t run into trouble when your business plays a song written, recorded, and produced by artists represented by different PROs.
Finally, properly licensed music for business needs to be centralized, so it’s easy to access. If there is any confusion about what music is allowed to be played at each location or where to find playlists that are covered with the blanket license, there is the potential for very costly accidents.
8. What are the fines and penalties associated with copyright infringement?
Fines and penalties for illegally streaming music in a business can range from $750 to $150,000 per song played without proper authorization.
While acquiring licenses with performing rights organizations and maintaining monthly reports can be costly, the risk of being sued far outweighs that cost.
9. Is there a simpler solution?
Businesses that want to stream music face many decisions and costs. It’s no surprise that more and more companies are turning to B2B music services that help them maintain compliance easily and affordably.
Monthly services like Pandora CloudCover and its alternatives range in cost. They provide a sense of security against compliance issues and monthly reporting, as well as an abundant catalog of music for businesses to use as background music. These services usually handle the music licensing paperwork on your behalf, but we recommend asking your provider for letters of license verification.
For example, Pandora CloudCover provides legal streaming music for businesses starting as low as $16.95 per month (when prepaid annually). Pandora CloudCover users get access to 220+ stations covering dozens of popular genres.
The Best Music Streaming Services for Businesses
Today, there are many music streaming services that are dedicated to the business market. With a subscription, you’ll have the ability to legally play music from their catalog in your establishment.
Here are some of the best options:
Pandora CloudCover
Boasting high rates of customer satisfaction, Pandora CloudCover allows businesses to schedule playlists, customize in-store messaging, and choose from a wide selection of music.
Pandora CloudCover offers four different subscription plans to choose from, so you can pick which level works best for your business needs. Plans start at $16.95 per month when prepaid annually. We also offer a 14-Day free trial.
Soundtrack Your Brand
With a large music catalog, Soundtrack Your Brand allows you to customize your playlists easily. They feature a wide array of features and tools that make it easy for businesses to play the music they want when they want it.
You can expect to pay about $35 per month per zone. They do offer a free 14-Day trial so you can try out the service before you commit.
Rockbot
With a robust music library and the ability to customize playlists with help from their system, Rockbot offers businesses a personalized music streaming experience.
Their plans start at $24.99 per month. Like the others, they offer a free trial but theirs is only 7 days.
Why Where You Get Your Music Matters
Don’t make the mistake that others have made regarding music licensing. When you get your music from a commercial music streaming service, you can rest assured that you are legally covered when you play music in your business.
If you don’t do this, the consequences are steep. You could easily face tens of thousands of dollars in fines (even hundreds of thousands of dollars) if you are caught playing music in your business for which you don’t have a license.
And remember, you can’t use your personal streaming subscription in your business. While logging into Apple Music, Spotify, or Pandora and plugging in your phone is fine at home or in your car, you need a business account to play music in your business establishment.