If you’ve ever been put on hold calling an office, sat in a waiting room, gone up an elevator, or walked through a conference or trade show, you’ve likely heard some ambient music. Maybe what you hear is a catchy pop song played on all the radio stations, or you hear something brand new to you that you enjoy.

As a business owner, you may wonder how to get great music that fits your business into commercial spaces like lobbies or office buildings. You may even wonder how to get on-hold music that won’t aggravate the waiting experience.

One important factor that, unfortunately, too few business owners understand is music licensing for commercial spaces. When you want to create a great ambiance with background music for business, you must legally license songs from specific performing rights organizations (PROs) that collect catalogues of music and scores to manage their copyrights, and ensure the composers and performers are paid appropriately for their work.

How Is Commercial Space Defined?

Commercial spaces include: conference rooms, shopping malls, office buildings, meeting rooms, presentations, trade show cubicles, and even the hold music that plays while waiting on the phone. Unless you have written and recorded your music yourself, you must purchase specific types of commercial licenses in order to legally play music in these public business places

What Is a PRO, and What Is a License?

PROs are organizations that professional lyricists, composers, and publishers join in order to help their music be distributed more widely while also protecting their intellectual property.

In fact, over 85 percent of the fees collected from licensing music by the two largest American PROs are paid to the artists as royalties.

These organizations manage the legal distribution of music to businesses of all kinds – filmmakers and producers, live performance venues, restaurants and bars, retail shops, and even commercial spaces, which now include office buildings, business meetings, and similar applications. Every time a song is played in a space where a significant number of people can hear it, the music industry considers that a public performance. The original musician or composer does not have to be present and performing it at that moment. The recording is legally considered a performance every time it is played. Since a business may financially benefit from certain music choices, that performance should be paid for.

Many larger businesses choose to purchase blanket licenses that cover the performing rights to a PRO’s entire catalogue for a set period of time. The proprietor of the business in which a piece of copyrighted music is performed is liable for any infringement of these laws, but what legally defines the “business” in any commercial setting can change. If you rent a space, for example, you are responsible for music licensing for that time; however, if you are walking through a lobby to get to your office with some coworkers, the building’s owner is responsible for that music.

Performance Licenses and Exceptions

Performance licenses, including blanket licenses, are considered nonexclusive. This means that a PRO can give out licenses for the same catalogue of music to multiple organizations. In some cases, a copyright holder may decide to negotiate exclusivity with their PRO, or a business can negotiate a license for a specific musician’s or composer’s work directly with the artist. However, access to a wide range of music that can be chosen by the business owner based on mood, brand, and personal taste is one important reason PROs remain in charge of copyrights.

There are some exceptions regarding performance licenses for music. The business owner may qualify for a "home-style exemption" if any of the following criteria are met:

  • If any given composition cannot be heard beyond the premises
  • If there is no charge for admission
  • If the only source is a radio, television, or satellite source
  • If the grounds are smaller than 2,000 gross square feet

However, some restrictions apply:

  • Radio transmissions cannot be broadcast over more than six speakers, with no more than four speakers in any given room
  • Television broadcasts cannot come from more than four TVs in the establishment, with no more than one TV per room
  • No TV can be larger diagonally than 55 inches

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Types of Licenses and Music Use

Before you start buying licenses for music, it is important to understand your options in this area. The law makes certain exceptions for using some kinds of music, but many people find it beneficial to go through a company – either a PRO or a music service – to get licenses.

  • Public domain: Any music in the public domain is available to use in a commercial setting. These typically include any songs written and recorded before 1922 due to how copyright laws manage ownership, but there are also now many artists who put their music online for free.
  • Fair use: In some instances, even copyright protected music can be used in commercial spaces. These include fair use purposes like research, criticism, teaching, parody, or news reporting; however, what is considered fair use depends on the artist or copyright owner, so it may be unclear when certain applications are legal or not.
  • PROs: Organizations like BMI, SESAC, ASCAP, and the new Global Music Rights (GMR) manage catalogues of thousands of songs from thousands of artists. Licensing agreements are easy to purchase through their websites. Although all these organizations have large catalogues, they do not manage the same artists, so you may find yourself purchasing commercial licenses through more than one of these organizations to get the music you want for your commercial setting.
  • Music services: The most famous of the music services are Muzak and DMX. These groups work with PROs to get licenses for a wide range of background music – a soundtrack played in spaces where the patrons may not pay attention exclusively to each song. Some music services charge a flat monthly subscription fee based on how many commercial spaces are expected to have access to the catalogue.

It is important to note that streaming services, like Pandora or Spotify, have commercial versions that you can subscribe to, but having a standard membership does not qualify you to make a playlist and broadcast it in your business.

Commercial Spaces and Using Music

While many business owners understand that the confines of their brick-and-mortar establishment must be covered by a license when customers are around, there are several nuances to music copyright law, especially as those laws are revised, which require commercial licenses. Too many businesses get into legal trouble before they understand the differences, so below are some common commercial applications for music that require licensing.

  • Offices: Professional office spaces often unintentionally break music copyright law. It may seem harmless to play a specific song in a business’s cafeteria, breakroom, or coffee area, during a birthday or holiday celebration among employees, or during an employee presentation, but as copyright law changes and evolves, each of these instances requires that the business or individual hold a license for the music used.
  • Waiting rooms and lobbies: If your business rents or owns space in a larger commercial office building, you are not responsible for the music they choose in their public spaces, like the leasing office, lobby, or elevator. However, if your business owns these spaces, you are responsible for the music licensing. You can choose to play a radio station within the above limits, but your patrons may not enjoy hearing commercials, static, or songs that are not appropriate to their mood. You have much less control over a radio station’s choices, which can influence whether your patrons enjoy being in your lobby or waiting room, and if they choose to come back.
  • On-hold music: Most larger companies purchase music specifically written to be played while a caller is on hold. Companies that compose these soundtracks range greatly in size, from large to home-based companies. However, familiar music is increasingly being used as on-hold music, so licensing these songs with this intention through a PRO or music service will be important for your business. The phone may not seem like a commercial space, but it is part of your business that gets traffic from consumers.
  • Elevators: Many people joke about the poor music choices in elevators, but many companies have made those poor decisions for strategic reasons. The history of music in elevators is a study in early psychology. Muzak was invented in 1922 to calm people who may have a fear of elevators, and it has stuck around as a stereotype ever since. This may also be called Muzak environmental music. More modern elevators still play calming music, but songs can range across genres, depending on what the business needs. And to play this music, even Muzak, the business owner needs a license.
  • Trade shows, conventions, and meetings: Maybe you’re working on a slideshow presentation and want a specific song playing at the end; perhaps you are working on a speech at a convention and need a playlist as the audience comes into the room; or maybe you have a booth at a trade show and want to draw attention with some energetic music. All of these may seem like harmless uses – after all, you’re not directly making money from any of these events – but under recent changes to U.S. copyright laws, you may have to pay to use a song for even a small business meeting.

The Benefits of Music Services

According to BMI, a license with their organization can cover airports, theme parks, hotels, bowling centers, colleges and universities, retail establishments, websites, and symphony orchestras, to name a few. But what if you want music that BMI does not manage? What if you want help developing playlists for moods? You should consider a music service to help you manage licenses and create an environment for your business that supports your patrons.