Pandora for Business: Streaming Usage Rules for Accounts

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Ensure Legal Music Compliance for Your Business

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Pandora Streaming Is Not Optimized for Business

Although playing music through Pandora radio in your restaurant, storefront, or office may seem like a good solution to providing inspiration and soothing sounds to your patrons and employees, there are some reasons this may not be the best solution.

The free version of Pandora is not optimized or built for business use.
Although you can “thumbs down” songs you do not like or that do not fit, this may interrupt the flow of music.
There may not be censoring of explicit lyrics or content in the songs, which could offend shoppers or employees.

More important than all of the issues above, playing music stations, like from your personal Pandora account, in a commercial or business setting breaks the law.

Pandora Terms of Service and Licensing

We all agree to terms of service when we sign up for online services, but few of us read them in-depth.

‍Pandora’s TOS are clear that using their service in a business, retail, restaurant, or other commercial establishment requires different licensing for the music, which Pandora says must happen through a separate service. You can privately listen to any Pandora station you create, but playing that Pandora retail music station in front of patrons at your business is illegal. This includes playing Pandora stations for restaurants through the service.

This is true whether you have a free or premium personal Pandora account.

Pandora for Business costs start at $26.95 per month. This option comes with no long-term contract required, and it allows you to tap into ad-free music stations. You can also create a customized playlist. This option requires a media player. If you use your own device, the cost goes up. The TOS do not allow you to use your personal Pandora account outside of private or personal settings for commercial use. Playing Pandora in a business without the proper license is illegal. (Note: Pandora for Business differs from Pandora CloudCover, our background music streaming service for businesses. More about that in a sec.)

The legal reason behind this has to do with copyright law and how performing rights organizations (PROs) manage licenses for music.

What are PROs?

PROs are music industry organizations that hold and distribute copyrights to songs for different purposes, on behalf of the musicians, composers, artists, and publishers of the works. PROs often have hundreds of thousands of songs in their catalogs, and you can work directly with them to have access to that catalog.

Once you have access to the catalog, it is up to you to figure out how to find and curate music specifically for your business. With mobile technology evolving almost daily, simply gaining access to one PRO’s catalog can be more complex than working with a music streaming service.

How PROs Manage Licenses for Business

A PRO is an organization within the larger music industry, which manages licenses and royalties for music copyright holders – publishers, composers, musicians, and other artists. PROs collect money through public performance royalties to ensure that artists and rights holders receive appropriate payment for their work. If you hear a popular song in a commercial, for example, the company that made the commercial paid to license that song for a certain amount of time while the commercial is broadcast.

You need specific licenses to play music in your business, even if you stream songs in the background. This is because playing a song in your business is considered a public performance even though the music is prerecorded and played through a totally different service.

How to Contract with PROs More Easily

Fortunately, there are several music streaming services that manage commercial licenses for you. Pandora CloudCover is unique in its boutique-level service to growing companies, but the general focus of all music streaming providers is to integrate with your business in order to help you manage the atmosphere of your setting and encourage social sharing with your customers. Music streaming apps are also easy for your employees to use. Personal music streaming services like Pandora have licensed with PROs in specific ways to get access to music you might like. Still, this license does not cover Pandora commercial use unless you have a commercial Pandora account.

Licensing Options from PROs

You can work directly with PROs to play music legally within your business. Several options exist, and this chart can help you understand how they typically work.

	ASCAP	BMI	Global Music Rights (GMR)
How to Sign Up	Online	Online	Online
Examples of Artists in the Catalog	Taylor Swift, Beyonce, Ed Sheeran	The Beatles, Elton John, Jay-Z	Drake, The Weeknd, Kanye West
Approximate Library Size	11 million	17 million	3 million
Typical Costs	Depends on the business size and type	Depends on the business size and type	Depends on the business size and type

While every PRO is a little different, most follow a similar method to sign up clients:

Provide information. Business owners fill out an online form and explain the size of their facilities, the number of listeners, and the type of organization. With this information, the PRO provides a potential feel and a contract.
Sign and accept. The business owner signs the contract and pays the requested fee.
Keep the documents. Business owners keep these documents in case they’re asked for proof of the proper license.

It’s tempting to lie on the documents and suggest that your building is smaller, or your audience is tiny. Instead, it’s best to be honest about how many people will listen.

What Happens if You Play Personal Pandora In Your Business

If you are caught streaming music in your business that you did not pay a business license for, you may face a lawsuit from the PRO that manages that song’s copyright. You may also face large fines.

Potential Fines

This means you could face a payment of $750 minimum or as much as $150,000 per violation. If you play from a streaming service, you likely get music from multiple PROs, so you may face legal problems with several of these organizations.

Why You'd Face Fines

‍It is legal to play broadcast radio in certain businesses, but that is because radio stations have a decades-long relationship with PROs and advertising to pay for specific kinds of licenses that cover accidental public broadcasting.

While Pandora advertises itself as a kind of radio station, you will hear songs you like several times as the algorithm figures out how to relate your tastes through the Music Genome Project. With high repeatability and a different kind of licensing for personal use, simply playing Pandora streaming stations in your business will not work.

Are PRO Contracts Better?

You could contact a PRO individually and pay for these licenses yourself This is very expensive, but it's exactly what many business owners have done. But if you want a wide variety of music, including the most popular songs of a genre, you will likely need to take out licenses with multiple PROs because their catalogues do not overlap.

Instead of paying for all these licenses and trying to juggle which songs you can legally play, business music streaming services with mobile devices and apps have provided business owners with a great opportunity. This is an infinitely better practice for any business that wants to avoid copyright infringement.

About Pandora CloudCover

‍We are dedicated to licensing music for businesses and providing it to you, the business owner, through an easy-to-use interface. All plans include licenses for music, both in the United States and Canada.

There are three types of plans, including:

Music, which provides profanity-free music in curated playlists for businesses.
Manage, which allows you to control the music played in each retail establishment if your business has more than one storefront.
Messaging, which allows you to insert in-store messages for your customers between songs or playlists.

Unlike other streaming for business services on the market, Pandora CloudCover is dedicated only to working with businesses. There is no personal- or consumer-level option, meaning the whole company focuses on music for your business.

Curators work on dedicated playlists based on the type of business you run. You can adjust these if there is a specific song you do not want included anymore or if there are multiple playlists you enjoy and want to combine.

Pandora CloudCover also works with most major PROs. Access to music from these many performing rights organizations means you have the best chance of finding a genre that works well. You can find many playlists that suit your business’s needs and leave your customers feeling satisfied with their time in your store.

Pandora CloudCover also offers the ability to upload your own in-store messaging, which can be interspersed with your playlist choices. Any voice your customers hear in your store will be associated with your brand, not with a radio station.