Streaming Music for Business: Requirements and Exemptions

in business insights

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.


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?
  2. Can I play music that I purchased and downloaded from iTunes or CDs in my business?
  3. Are there exceptions or exemptions for music licensing requirements?
  4. Do I need a music license to host a live performance at my business?
  5. How do I Legally Stream Music in a Business?
  6. How do I obtain Music Licenses from Performing Rights Organizations?
  7. How do I avoid fines when working with Performance Rights Organizations one-on-one?
  8. What are the Fines and Penalties associated with Copyright Infringement?
  9. Is there a simpler solution?

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 on your car, they are only meant for private consumption. That’s 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 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 US 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 2000 gross square feet (3,750 for restaurants) may plays radio or television, where copyrights are covered by the broadcasters.
Business locations with more than 2000 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 6 speakers, of which not more than 4 speakers can be located in any 1 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 protected 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 is considered public domain.

5. How do I Legally Stream Music in a Business?

The bottom line? As a business you will probably have to obtain a Public Performance License for every song you play within earshot of customers. This may require you to negotiate agreements with Performance Rights Organizations or subscribe to a service that obtains 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 PPL, though. To make sure that you are working within the law, you’ll need to acquire different licenses based on how you will use the music.

Public Performance License 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 Performing Rights Organizations and acquire a PPL for their catalog or you can subscribe to a service to negotiate more favorable deals for you.

Dealing with PROs one-on-one 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 upon a number of factors, including:

  • The type of business.
  • How music is performed, such as love recorded, or audio and visuals together.
  • The size of your establishment.
  • The number of locations.

7. How do I avoid fines when working with Performance Rights Organizations one-on-one?

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

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 that you don’t run into trouble when a business plays a song written, recorded, and produced by artists represented by different PROs.

Finally, compliance and access to properly licensed music needs to be easy and centralized. 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 are opportunities 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 who 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 maintain compliance easily and affordably.

These monthly services will cost between $16-$40 per location and 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.

Cloud Cover Music provides legal streaming music for businesses starting from $16.16 per month providing access to 120+ stations covering dozens of popular genres.