Fines for Playing Music in a Business Without a License

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What Do PROs Do?

A performing rights organization (PRO) is a business that works with copyright holders (like songwriters, musicians, or publishers). They consider artists their clients, and they manage copyright on their behalf.

A PRO can do things like give businesses licenses to play music. A PRO can also protect the rights of musicians and composers based on national and international law. They can take you to court if you play music without permission.

What Types of Licenses Do PROs Offer?

You know there are fines for playing music in a business without a license. But what kind of license do you need? There are different types available, and the one that’s right for you will depend on how you want to use music in your business.

Common licenses business owners need include the following:

Public performance. This license allows you to play recorded music (such as a CD or a song played via a streaming service) in a public place like a restaurant, bar, or office.
Mechanical license. This license allows you to reproduce recorded music (such as placing a song on a CD you hand out in your business).
Synch license. This license allows you to play music alongside visual content (such as a music video you post about your business)‍
Master use license. This license allows you to use a specific recording of a song (such as a particular recording of Frank Sinatra singing All of Me). You may need this license in addition to a synch or mechanical license for full protection.

Why You Might Be Fined

Playing music in your business could be a form of copyright infringement which could incur a significant fine.

In U.S. copyright law, copyright infringement is defined as the use of copyright-protected works without appropriate permissions. This infringes on the intellectual property rights of the creator, including the rights to:

Reproduce
Distribute
Display
Perform
Create derivative works

Copyright violations are most famous as piracy, including downloading movies or music from online sources without paying for a licensed home copy through a streaming service, on a hard copy like a DVD or CD, or other similar violation. However, playing background music in your business without the right type of commercial license (for example, using a personal music streaming service like Spotify or Apple Music rather than paying for a business-focused streaming service like Pandora CloudCover) is a violation of copyright law.

What Are the Fines I Could Incur?

If you violate U.S. copyright law, you potentially face tens of thousands of dollars in fines. A PRO may send you a letter when they note your first offense. Costs you incur can range from a few hundred dollars if you are a small business and you violate with one song, up to thousands of dollars if you are a large business or violate the PRO’s licenses multiple times in one instance.

Ignoring these letters will not make them go away. Instead, you will continue to incur fines and penalties and may eventually be taken to court. The total bill won’t just include the PRO’s licensing fees and penalties as dictated by U.S. copyright law. It will also include the cost of your attorney, court fees, and other fines determined by the judge. Ultimately, violating copyright law could put you out of business.

How Much are the Fines?

When PROs have evidence that you are using music without the legal right to do so, they might reach out to you with a letter that demands payment based on what the organization assumes about the following:

The size of your business
The frequency with which you play music
How many speakers you have that play music
What music is used for in your business

The numbers cited in the letters are not fines per se. They are fees that the organization expects you to pay. But if you do not pay those fees, you may be subject to penalties outlined in copyright law.

Chapter 5 of American copyright law specifies statutory damages, or fees. According to the law, those cannot be lower than $750 or more than $30,000 per violation.

Copyright law doesn’t clarify when you’d be liable for the low fee and when the higher one might be appropriate. It’s up to the discretion of the court.

However, if the court determines that your use of the music is somehow willful, the court could increase the damages to $150,000 per violation. The court could consider the infringement willful if the violator was given information about the copyright and ignored it. A PRO could do that by sending your business several letters about how the music you’re playing has no license. If you ignore them, that could be considered a willful act on your behalf.

Copyright law does allow for an accidental infringement. If you can prove, in court, that you didn’t know you were violating copyright law, you could face a fine of not less than $200.

Violation Table

Violation	Potential Fine	Variables
Playing just one piece of music without authorization	$750 to $30,000	"As the court considers just," so you won't know the fee until you're in court. Copyright law doesn’t further clarify the difference between the potential for high or low fines.
Willfully breaking copyright law	Up to $150,000	The other party must prove that you willfully neglected to fix the problem.
Accidentally violating copyright law	No less than $200	You must prove you didn’t know you were violating copyright.
Attorneys' fees	Varies	The court may ask the losing party to pay all of the associated court fees, including the prevailing party’s attorneys’ fees.

How Are Fees Collected?

There are some business owners that reach out to PROs with information about their businesses, and they set up agreements before the business opens their doors to customers. But there are some businesses that never reach out to a PRO. When that happens, PROs can send out scouts to detail how a business is using music.

Warnings Are Not Required

That happened to a Washington business, according to the Peninsula Daily News. One night in 2017, a private investigator sat inside a bar and wrote down the names of the songs heard. The business owner didn't know the investigator was there. She only found out about the visit when the lawsuit arrived. Soon after, the PRO filed a lawsuit for $3,000 to $120,000 for those four songs alone.

A lawsuit like this can seem like an overreaction, but it is important to know that PROs are protected by copyright law. As a lawyer writing for Law 360 points out, the copyright holder is not required to send a cease-and-desist letter and give the company time to change course. The very first time a PRO might reach out to a company could be through a lawsuit, and that is legal.

Even though PROs are not required to reach out to businesses, they often do so. For example, in a press release published by ASCAP (a major PRO), the company points out that they reached out to a set of businesses named in a lawsuit multiple times, and when no response came back, they chose to go to court.

PROs in Court

It is not at all uncommon for PROs to take businesses to court. In fact, according to USA Today, BMI (another PRO) sued more than 160 businesses in 2015 alone. This BMI lawsuit resulted in fines of $24,000 for playing four unlicensed songs. The PROs are aware that the law is on their side, and they are not afraid of using the law to get the financial support the law entitles them to.

In one case from 2015, a restaurant owner in New Jersey was sued by a PRO for the use of four songs played one night. According to the New York Post, the damages awarded in that case (which the restaurant owner lost) were $24,000. Since the restaurant owner lost the case, he is required to pay attorney's fees for the PRO, which came to $8,200.

In an article published by The Plain Dealer, a PRO representative claims that lawsuits are a last resort, used only when businesses will not comply. Even so, it could be a smart strategy. A PRO representative could document each:

Phone call
In-person visit
Letter
Package

Each outreach could be used to prove that a company is willfully ignoring the law. That could be evidence used in court, and it could lead to bigger fines for the business.

How to Get a License From a PRO

We’ve explained why it’s important to get a license for music, and you should get that license before the music starts to play. Let us explain how to get the license you need step by step.

1. Determine How to Use Music

Before you can contact a PRO, you must know how you’re planning to use music in your facility. That information can help you ensure that you get the right license. Questions to ask yourself include the following:

Will you play recorded music?
Will you have live music?
Will you use music in conjunction with video?

You don’t need to know the specific name of the license you’ll need. But be prepared for questions like this, so the PRO can give you the right product.

2. Pick Your PRO

As we mentioned, several PROs exist. Choose the one that’s right for you based on things like the artists they represent or the songs in their library. PROs to choose from include the following:

3. Fill Out a Form

Most PROs use forms that help them collect data about potential clients. For example, this form from ASCAP is designed for a license for dance schools. Notice that you’re required to answer questions about the number of students you have, the type of music you’ll play, and more.

4. Start the Negotiation

With your information, the PRO can provide an estimate of fees for your business. Know that this can be a conversation between you and the PRO. Ask about making changes (like playing music on fewer days or in smaller rooms) to reduce your overall costs.

At this stage, negotiating for the type of license you need can help you to save money. For example, if you agree that you won’t use music in your promotional videos, you won’t need a synch license, and that could save you money.

5. Sign and Pay

Once you’ve agreed with the PRO, you’ll be given a contract and a bill.

Don't Take the Risk

Ignoring the law means playing with fire, and it could have severe financial consequences. There is a better way. At Cloud Cover Music, we have relationships with major PROs, and we have extensive libraries that contain the songs you want to play. We can give you access with one small charge, so you can rest easy knowing that you are in compliance with the law. We can get you set up in minutes. Call us to find out more.