Music has long been an important aspect of business, helping to engage customers and positively influence moods while aiding in brand recognition and image, and creating the atmosphere. As early as 1897, there were copyright laws in place to protect the public performance of musical compositions. 

By the early 1900s, sound recordings hit the scene, and public radio was a popular form of broadcasting music. 

In 1914, ASCAP (American Society of Composers, Authors and Publishers) was born, offering blanket licensing for music broadcasting. This was the first performing rights organization (PRO). Today, PROs still control the way music is licensed and played in businesses.

Music licensing, and the way it can legally be broadcast in public at a business, has continued to evolve. Now, music is commonly streamed through a service that already has the necessary public performance license agreements with the PROs. 

What Did Businesses Do Before Streaming Platforms?

In the era before digital music and streaming capabilities, businesses had to rely on first radio broadcasts and then recorded music in the form of records, 8-tracks, cassette tapes, and then CDs. 

This music was copyright protected, but for many years, licensing rights were not paid out, and licenses were not always required to play music in businesses. As sound recordings became more popular and methods of reproducing them became public, copyright laws began to evolve to try and protect artists and record labels.

The first PRO was ASCAP, which represented many of the musical artists and recording labels at the time. Radio broadcasts needed to obtain a license from ASCAP to play copyrighted music. 

ASCAP had a corner on the licensing market and raised their prices in 1939, prompting the creation of BMI (Broadcast Music, Inc.). This was followed by SESAC (initially, this stood for the Society of European Stage Authors and Composers), creating some competition for public performance license agreements.

How Did Businesses Actually Play Music?

In the early era, radios and jukeboxes were often a source of music in businesses. Prior to 1978, music on jukeboxes was not licensed, but that year, a law was enacted requiring businesses to pay the U.S. Copyright Office a flat fee for a compulsory license to play publicly performed, non-dramatic musical works.  

As of 1990, the Jukebox License Agreement is administered through the Jukebox License Office (JLO), offering a blanket license for jukebox operators.

Another form of music played in businesses included live music performances. In 1946, BMI extended licensing to businesses that used live music for entertainment purposes, such as the following:

  • Nightclubs
  • Dance halls
  • Taverns
  • Restaurants
  • Bars
  • Grills

If these businesses wished to hire a band or have live music performed, they would need a license to do so.

Who Enforced Laws?

Early on in the era of radio and then sound recordings, copyright laws were not as strict as they are today. Prior to 1972, sound recordings were protected by individual state laws, which could vary, and not by federal copyright laws

Once they were absorbed into federal copyright law, the U.S. Copyright Office holds the copyright records, but copyright infringement cases are generally civil cases taken up in federal courts. If a musician or recording label thought that their music was being used without permission, they could sue for copyright infringement. 

PROs that represent musicians and artists would also expect payment for using music under their catalogs. If music was used without permission, these organizations would file a civil suit against a business or individual to demand retribution. 

The expansion of digital music extended the need for stricter copyright laws and practices.

Where We Are Today

Music today is protected by two different copyright licenses: the master use license, which covers the actual sound recording, and the composition license, which protects the musical composition and lyrics of the song. 

To play songs legally in a business, the organization will need permission from the holders of the copyright. You can get this from the holder of the copyright directly, but obtaining permissions one by one to play a variety of music can be tedious. This is where PROs and music streaming services come in.

Several of the major PROs still exist today, including BMI, ASCAP, and SESAC. They each represent major recording artists and record labels. 

Businesses can obtain licenses from one or multiple of the PROs directly to play music by artists and labels that the organization represents. This usually comes in the form of an annual membership with pricing based on the size and scope of the business. 

Another option is to use music in the public domain. The copyright on this music has already expired. To date, this means music recorded prior to 1925. 

Many businesses today use a music streaming service that caters to businesses. These companies already have licensing agreements with the major PROs in order to allow businesses to stream and play their music in their place of business. These services typically collect a monthly or annual subscription or membership fee for unlimited access to the music in their library. 

Copyright laws are strictly enforced today. Failure to obtain permission to play copyright-protected music in your business can result in major fines and legal troubles. Avoid legal issues by ensuring you have proper licenses prior to playing music in your business.

References

The Current State of Pre-1972 Sound Recordings. (May 2015). NYU Journal of Intellectual Property and Entertainment Law.

ASCAP Music Licensing. The ASCAP Foundation.

BMI. (2022). Broadcast Music, Inc (BMI).

History of the Jukebox License Office. Jukebox License Office (JLO). 

BMI’s Timeline Through History. (2022). Broadcast Music, Inc (BMI).

Copyright Breakdown: The Music Modernization Act. (February 2019). U.S. Library of Congress.

The Lifecycle of Copyright: 1925 Works Enter the Public Domain. (January 2021). U.S. Library of Congress.