It's hard to run a successful and profitable business in the United States.
Small business owners dole out fees for health insurance, utilities, supplies, and rent. By the time all those fees are paid, there may be little left for salaries, not to mention profit.
If you're looking for a way out of a licensing agreement so you can play the music you want to play without paying any kind of fee, we understand. Unfortunately, you may discover that avoiding fees isn't as easy as it might seem.
Understanding the Players Involved
The music we hear when we turn on the radio, put on a CD, or tap a button on our phone has been created by someone else. And that someone else gets a payment for that work.
Performing rights organizations (PROs) handle the payment issue. BMI, a major PRO, explains that the work done is a bridge between songwriters and the businesses that want to use the work those songwriters have generated. In the eyes of BMI, the work helps to ensure that content creators get the money they need in order to work on new projects.
Few small business owners would argue about this basic point. Just as you want to be paid for the work you do, musicians want to be paid for the work they do. It's reasonable and it makes sense. But you may be surprised to learn that almost everything you do that involves music within your business will trigger a fee.
The website Digital Music News explains that PROs expect to collect royalties during any public performance of a protected work. A public performance is defined as the performance of a song played in front of a substantial group of people.
You could be engaging in a public performance if you:
- Play a CD of jazz tunes in your salon.
- Load up a jukebox with oldies records in your bar.
- Tune in a Pandora radio station in your dental office.
- Play a family member's record during a funeral.
You may not think of these things as performances. After all, the people in these scenarios may not be actively listening to the music you're playing. It may just wash over them as they're doing something else. But in the eyes of the PROs, these all qualify as performances.
It's also vital to understand that there are two types of copyright for each song. Digital Music News reports that one copyright covers the underlying composition of the song while the other protects the sound recording. It's not unusual for the owners of these copyrights to be different people.
There are three major PROs that operate within the United States: BMI, ASCAP, and SESAC. The copyright holders of the song you'd like to play may have relationships with the same PRO, or they may have relationships with different PROs. One song could be in compliance with a licensing agreement, while it could be out of agreement with another.
For this reason, and because it can be hard to untangle the copyright of every song, business owners are often encouraged to have relationships with all of the major PROs. That way, they can play the music they'd like to play. But there are some business owners who want to move in a different direction.
If you run an eating or drinking establishment, and your facility is 3,750 square feet or smaller, there is an exemption that involves radio, says the New Mexico Restaurant Association.
You can play conventional radio in your facility as long as one of these issues doesn't apply to you:
- More than six loudspeakers
- More than four loudspeakers in any one room
- Mandatory cover charge
- Music played while people are on hold
Owners of other types of businesses have one slight exemption to explore, and it involves music in the public domain. According to Stanford University, it's safest to define public domain music as music that was published prior to 1923. There are some songs published between 1922 and 1964 that may be in the public domain, but that involves research with the U.S. Copyright Office. Some copyright holders have issued renewals for those works.
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It's important to note that songs move into the public domain based on the date they are published. Remakes don't count. So you won't be able to select a song by title. You'll need to watch the publish date carefully. For example, "Mary Had a Little Lamb" might be in the public domain. But if Adele were to record a version of this song, it would not be part of the public domain. If you go this route, you will need to do your homework.
In a profile published by The New York Times, a representative from BMI suggests that the company prefers to educate rather than litigate. The PROs make calls, write letters, visit, and exert pressure in order to convince companies like yours to comply. All of that pressure can be exhausting. If you're using a loophole like the one above, the PROs are likely to continue to ask for proof that you're following the law. And if you make even a small mistake, they're likely to come back with a letter. Ignore them for long enough, and they may come after you with a lawsuit. The representative in this article suggests that BMI hasn't lost a lawsuit in 51 years.
The Golden Gate Restaurant Association reports that BMI and ASCAP alone file about 400 to 500 lawsuits each year, and those suits can come with thousands of dollars in fines.
The final exemption involves a different type of connection. Companies like ours have negotiated contracts with the major PROs, meaning we can offer you a comprehensive library of songs with just one easy-to-understand fee. You won't need to do research on the songs you can or can't use. You can just get started. Contact us today and we'll tell you more.
- Our Role. BMI.
- A Comprehensive Comparison of Performance Rights Organizations (PROs) in the U.S. (February 2018). Digital Music News.
- Music Licensing for Restaurants. (December 2016). New Mexico Restaurant Association.
- Welcome to the Public Domain. Stanford University Libraries.
- The Music-Copyright Enforcers. (August 2010). The New York Times.
- Playing Music in Your Restaurant? What You Need to Know About Licensing to Avoid a Lawsuit. (August 2016). Golden Gate Restaurant Association.