Playing music without a license can be devastating for your business, and you could be breaking copyright laws inadvertently. Take charge of your company’s future by creating and regularly updating a compliance report. 

In this guide, we’ll explain what a compliance report is, how it works, and why you should have one. We’ll cover everything from jurisdiction maps to PRO coverage and compliance checklists. We’ll show you how to build a comprehensive report quickly and effectively. 

Working with a music for business streaming service like Pandora CloudCover can make compliance quick and effective. You’ll get fully licensed music at a fraction of the cost and with few hassles.

Why Compliance Matters: Legal & Financial Risk 

Many businesses violate copyright laws unknowingly. For example, 78% of small-to-midsize businesses use personal streaming accounts to share music. This practice breaks copyright law. 

If you share music without a license, you could be subject to fines and lawsuits. Courts can award damages in the billions, which could cause even the most financially sound businesses to close up shop. 

You can avoid these risks and save money by working with a business music provider like Pandora CloudCover. 

We offer fully licensed music with a free 14-day trial. Terms and conditions apply.

Understanding the Jurisdiction Map & Business Music Impacts

The area in which you do business can impact the laws you might break and how much a violation can cost you. 

United States 

All states are bound by U.S. copyright law. You need a license to share music for customers, and without it, the copyright holder can take you to court and sue for damages between $750 and $30,000 or more, as the court considers just. 

In the United States, performing rights organizations (PROs) administer licenses and are able to sue infringers for noncompliance. Companies like ASCAP offer broad licenses that cover music played via a CD, on a streaming device, or live. 

However, companies typically need licenses with all PROs for full coverage when playing music at a business. A relationship with one PRO doesn’t allow you to play songs managed by another. You need many relationships with many PROs to ensure full coverage if going the individual route like this.

Canada

Music in Canada is also protected by copyright laws. Fees to use Canadian music are set by the Copyright Board of Canada, and licenses are available through SOCAN (for compositions) and Re:Sound (for the recordings). 

In the past, companies needed licenses from both organizations to play music legally. A joint venture called Entandem was established to simplify the process, allowing businesses to comply with just one license. 

Businesses in Both Countries 

If you have physical locations in two countries, you must abide by two sets of rules, and they can be quite different. This table can help you understand how the rules apply:

Performing Rights Organizations & Coverage 

Performing rights organizations (PROs) can manage copyrights for their clients by issuing licenses, accepting fees, and litigating noncompliance. Artists who sign up with them pay a small fee for these services. 

American PROs 

Several PROs operate within the United States, including these:

• ASCAP (American Society of Composers, Authors and Publishers): The oldest PRO in the U.S. and the only one that remains a member-owned, non-profit organization, representing nearly a million songwriters and publishers.
• BMI (Broadcast Music, Inc.): One of the two largest PROs in the nation, representing a massive catalog of over 22 million works and operating as a for-profit entity since its acquisition in 2024.
• SESAC: A boutique, for-profit PRO that is invitation-only, representing a smaller but prestigious roster of high-value songwriters and film composers.
• Global Music Rights (GMR): An elite, highly exclusive PRO founded by Irving Azoff that represents some of the most popular and "must-have" contemporary hitmakers and legacy artists.

Most American PROs offer blanket licenses that cover background and live music. However, some specific use cases (such as music for a cycling class) require different fees. Reading the license details is critical. 

Canadian Societies 

Canadian PROs also manage licenses and fees for their clients. This model is slightly different, as there are likely only two PROs at work in Canada with respect to background music at a business, and one covers the recordings and the other the composition. A recent merger means that you may only need to approach one organization for both licenses.

Businesses in Multiple Countries 

Because music licensing is territorial, businesses expanding across the border cannot simply “port” their U.S. licenses to Canadian locations. Each country has its own enforcement body and distinct copyright laws. 

For example, if you have a store in Seattle and a store in Toronto, you are subject to two different sets of national laws because the music is being "performed" in two different legal jurisdictions.

An Alternative: Streaming Music for Business Providers 

Business music providers like Pandora CloudCover are less expensive than traditional PROs, and their contracts are easier to manage. These providers contract directly with PROs, so you don’t have to. You’ll save both time and money. 

‍Streaming music for business is quicker and more effective with Pandora CloudCover.

Business vs. Consumer Compliance Checklists 

Many business owners believe they can use personal streaming platforms like Spotify to share music with their customers. Unfortunately, this isn’t true. 

This table can help you understand the differences between personal and professional streaming accounts:

How to Build Your Business-Use Compliance Checklist 

By following these steps, you can help ensure your business remains compliant, avoiding steep fines and reputational damage stemming from copyright infringement. 

Step 1: Take Inventory 

Take note of every location, and identify how many speakers are in each room that will play music. Ensure that your license terms match the number of zones identified in each location. 

Step 2: Outline Use Cases 

Audit how music is used in each location. Are you playing music in the background only, or are you working with live bands and assessing cover charges? Ensure your contracts match the way you’re using music right now. 

Step 3: Contract Management 

Ensure your music service provider’s contract is accurate and up to date. Store your contract and proof of all payments in one place you can easily access. 

Step 4: Set a Schedule 

Create a master calendar of contract expiration dates with automated reminders to prevent lapses. Use that calendar to track all contact letters or audits. At least once yearly, validate that your music use matches your license coverage. 

Building Your Report 

With your audits and calendars in hand, you can create a formal compliance report that serves as your organization’s single source of truth. Here’s what your report might include: 

Executive Summary 

Quickly identify how many of your locations are in compliance, as well as any gaps you’ve found. Describe how you plan to mitigate any problems you found. 

Jurisdictional Map and Summary 

Summarize the legal requirements for each region. Identify factors such as these:

• Regions in Canada that have different copyright requirements 
• Locations that use music differently 
• Locations that are smaller than others

A table in this section might look like this:

License Inventory 

List all of your locations, their details, and their compliance status. Your table might look like this:

Gap Analysis 

Identify locations that aren’t compliant, and detail the risks of continued noncompliance. Rank your risks in order of importance, creating a roadmap of work for the next period. 

Remediation Plan & Timeline 

Create a detailed schedule to bring all noncompliant locations into compliance. Outline how you’ll address each issue, who is responsible for remediation, and when it’s due. 

Budget 

Describe how much you pay in licensing fees for each location, how much you must pay to solve noncompliance, and how much you might save by fixing problems before you’re fined. 

You could create a bar chart that compares how much you spend on compliance versus how much you could be fined if you don’t comply. 

Audit & Monitoring Process 

Define how ongoing compliance will be monitored, who is responsible for audits, and next steps to ensure your contracts are accurate. 

Appendices 

If you truncated any information to create this report, place omitted information in this appendix. You could attach all of your contracts here, define acronyms, and otherwise explain anything an outsider might not understand at a glance. 

Best Practices for Ongoing Compliance 

Once you understand your coverage and potential risks, take these steps to ensure you’re always in compliance:

• Audit your report regularly.
• Act quickly when gaps are found.
• Ensure your audience understands (and reads) your report regularly.
• Back up your document on the cloud, so it’s always available. 

Stay Compliant With Pandora CloudCover

At Pandora CloudCover, we make it quick and easy to stream background music legally. Our low rates and high customer service make us an excellent choice for your music needs. Try it free today. Terms and conditions apply.

References

78% of Small-to-Midsize Businesses in the U.S. Currently Misuse Personal Streaming Accounts to Play Music to Their Customers. (February 2024). Music Business Worldwide. 

‍Chapter 5: Copyright Infringement and Remedies. U.S. Copyright Office. 

‍ASCAP Music Licensing FAQs. ASCAP. 

‍Music Licensees. SOCAN. 

‍Canada’s RE;SOUND and SOCAN Launch Entandem JV to Offer Single Public Performance License. (May 2019). Music Business Worldwide. 

‍‘The Complexities of Music Licensing in the Digital Environment and the United States’ Music Modernization Act “Solution”. (June 2024). European Intellectual Property Review. 

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