Understanding U.S. in-store music performance laws is important for every business owner. The sounds you play within your facility could entice your customers to linger, spend more, and talk about their experience with friends and family. However, if you play those songs without permission from the copyright holder, you could be subject to lawsuits and large fines.
This article will explain some aspects of music performance laws in the U.S. and what business owners may do to comply with them.
Music and Copyright Law
Copyright law protects music, the artists who create the music, and the companies that promote and market the music. Copyright law allows the owners of the music to perform their songs and to publicly play recordings of the songs in most business circumstances.
A person or an entity publicly playing music without written permission may be in danger of infringing on the exclusive public performance rights of copyright owners, and copyright law empowers the owner to recover monetary damages lost by the unauthorized reproduction and performance of the music.
Damages
Aside from a few exceptions, a license is required to play music in a business space, like a restaurant, a coffee shop, or a bookstore, and failure to secure such licenses can result in incredibly expensive damages, including statutory damages of $150,000 per song.
What Is a Public Performance?
Most people understand that a concert is a public performance of music. But did you know that the songs you hear in the background of a restaurant are also considered public performances?
As the U.S. Copyright Office explains, copyright holders have exclusive rights over the publication of their work. They can grant permission to someone else, but such use without a license is unauthorized. Copyright infringement may occur when a copyrighted work is performed without the copyright holder’s explicit permission.
While you may not need a license to play music for your backyard barbeque guests, you'll likely need a license to play music for your food truck customers.
Facing the Music
For consumers, the legal landscape when it comes to hearing music in the background can seem unnecessary, but falling afoul of the law can cost violators in a big way. In 2012, the Ninth Circuit Court of Appeals found a California business to be in violation of copyright laws when it played music without having a license to do so. The case, Range Road Music, Inc. v. East Coast Foods, Inc., involved a restaurant that has an attached bar and lounge, where live and recorded music is played. The American Society of Composers, Authors and Publishers (ASCAP) offered the owners of the restaurant a license to play music by members of the society, but the owners refused.
The society contracted an independent investigator to visit the restaurant in question, document his time there, and prepare a report to determine whether the restaurant was engaging in copyright infringement.
LexisNexis writes that the investigator identified a number of songs that were performed by the live musicians and played via the restaurant’s in-house CD player. For songs the investigator did not recognize, he “approached the CD player and transcribed the titles directly from the CD case as the songs played.”
Once ASCAP confirmed that the songs were being performed and played without a license from them, they took their case to the courts, which found in their favor. The restaurant chain was fined $36,000 in statutory damages and $162,728.22 in legal fees.
Exemptions to Licenses
There may be exceptions to when a license is required to publicly perform copyrighted music; stores under 2,000 square feet, and restaurants and bars under 3,750 square feet, may play music over a radio, TV, or similar device, but there have to be fewer than six speakers carrying the sound.
Additionally, there may be limits on the placement of the speakers. Educational and charitable events may also have exceptions to the rules regarding public performances of music in a business.
Performing Rights Organizations (PROs)
In order to obtain proper public performance licenses, businesses would have to go to all performing rights organizations (PROs), of which the American Society of Composers, Authors and Publishers is only one example. Other such groups include Broadcast Music, Inc. (BMI), Global Music Rights (GMR), and SESAC (originally known as the Society of European Stage Authors and Composers).
None of these PROs can grant a public performance rights for another PRO’s content. These PROs and others like them are the bodies that license the work of songwriters, composers, and music publishers to the public; they are also responsible for collecting and passing on royalties to the copyright owners.
Getting a license from one performing rights organization does not allow a business to play music by a copyright holder doing business with another PRO.
As an example, the music of a song might be written by an artist represented by ASCAP; the lyricist might be represented by SESAC. If a band changes record labels, part of their discography may be licensed through one PRO and the rest through another.
To avoid this pitfall, some businesses can purchase a blanket license from every PRO it wants, that gives the business the right to play any song it wants from each library covered by the respective PROs. This is not a one-off payment; a blanket license can cost a few hundred dollars to several thousand dollars every year.
How to Get a License From a PRO
To follow U.S. in-store music laws, you need permission to play music. Working directly with a PRO can give you permission to play songs from that organization’s library.
How you may get a license from a PRO:
- Identify your needs. Most PROs change their fees by business type. For example, a café owner has a different monthly fee than a retail outlet. PROs may also change their fees depending on the size of a facility and the number of people who might hear the music. Measure your space, get rough estimates of your customer base, and outline when music will play. Your research will help you prepare.
- Pick the right PRO. Several PROs exist, and they all have slightly different client lists. Look at the library offered by each PRO we mention below and choose the one that has the artists you want to listen to in your organization:
- Contact the PRO. Visit the organization’s website or call the sales department. Provide details about your business and your potential use of music. The company will give you an estimate of fees. In most cases, a license will cost about $250 per year for small organizations with few customers. Large facilities with an extensive potential audience should prepare for fees of $2,000 per year or more.
- Sign and pay. The PRO will give you a detailed contract that outlines how you can use music and how much access will cost. Sign that document, pay your fee, and you can start playing music.
Licensing In-Store Music
Performing rights organizations might seem like unnecessary bureaucracy and legal red tape, especially if a store simply wants to have some background music to keep customers entertained, but they serve important roles for artists and music labels.
The mission of a PRO is to ensure that songwriters, and the publishers who put the music out there, are duly paid for the use of their creative product. The losses incurred by the music industry due to decades of illegal downloading have made record labels determined not to hemorrhage any more profits than they absolutely have to.
One way to close this wound is by partnering with performing rights organizations, which collect public performance royalties which may be sent to music publishers, who could then pass it on to the artists or songwriters.
Hearing any piece of copyrighted music in public – whether at a coffee shop, retail store, or in an elevator – means that whoever is playing the music should have the appropriate licenses from a PRO, like ASCAP, BMI, or SESAC.
Since copyright laws differ in neighboring countries, Canadian musicians and labels may need to engage with a PRO like SOCAN (Society of Composers, Authors and Music Publishers of Canada) and secure a license application to SOCAN, which will be subject to relevant Canadian-American legal agreements.
Q: Can I use Spotify, Apple Music, or a personal streaming service for music in my business?
A: No, personal streaming accounts are licensed only for private, non-commercial use. You’ll need a business- or commercial-licensed streaming service that includes necessary performance rights.
What Businesses Need Music Licenses?
The kinds of organizations that request licenses are varied. They include the following:
- Eating and drinking establishments: Restaurants, coffee shops, and bars often use music to make time spent in the facility a little more appealing. Songs can also cover unpleasant sounds like people chewing or dishes being washed.
- Music venues (bars, performance halls, amphitheaters) and sports arenas: Organizations like this often need licenses for live music performances.
- Airports: Some airports use music to help travelers feel more comfortable as they wait for their flights.
- Hospitals and clinics: Some healthcare facilities use music to mask conversations and make a wait more pleasant.
- Retail establishments:. Shopping malls, grocery stores, and other buying environments can play music to make shopping more fun.
- Bowling alleys, amusement parks, and other entertainment venues: Music can make spending time in these facilities more pleasant.
Any one of these places or any other public establishments that want to play music for customers must go to a PRO to secure the necessary license or use a music service that covers such licensing requirements -- like Pandora CloudCover.
Does Streaming Music Need a License?
In a similar way that a PRO license may not be necessary for certain venues (based on size, the number of speakers, and whether the music is played at an educational or charitable event), music that is streamed digitally (through Pandora or Sirius XM, for example) or through a cable music channel may be subject to licensing through SoundExchange, which is responsible for collecting public performance royalties for sound recordings through certain digital platforms.
Why Commercial Streaming Services Are Needed
It is in the best interests of artists and labels to sign up with a PRO for the collection of performance royalties.
That's how the content creators and copyright holders can get the royalties due to them every time one of their songs is played at a restaurant or a sports stadium, or in a coffee shop or bowling alley.
For example, even if a storeowner has a private Pandora account, the terms of that account do not cover playing music via Pandora for the benefit of the general public via background music for a business establishment. Doing so without the protection of a Pandora for Business account could open the store up to copyright infringement.
Similarly, if a business owner has a private music-playing device (like an MP3 player), and has legally bought the songs on that device, they may still need to license the music and pay public performance rights.
The purchase of digital music files licensed for personal playback does not give a business the public performance rights to play those files for the benefit of customers or patrons.
Exceptions (and More Exceptions)
At a certain point, the rules become surprisingly specific.
Background Music & No Covers
The National Restaurant Association notes that if an establishment has a Pandora for Business or SiriusXM for business account, such services are only intended for background listening. As such, it can't be offered as dance music, and no cover fee may be charged.
Additional Music
If the business has any additional music – for example, live bands, karaoke, or DJs – then the owners should obtain a license from the proper PROs directly, as these kinds of entertainment are not covered by Pandora CloudCover's terms of use.
Playing the Radio
You may be able to play the AM/FM radio inside your business without additional licensing. Some factors which may determine your business's radio usage include:
Only for Employees
In general, licensing obligations come into play if the business wants to play music for the benefit of the general public. Limiting music to employees may not require background music licenses.
However, this exception has its own exceptions. If customers can still hear the music, even if it is not meant for them, then a music rights holder may claim the general public still receives the music, and licensing obligations would apply, notwithstanding the attempts by the business to restrict the hearing of the music.
Does Public Domain Count?
All PROs offer searchable online databases, with the necessary disclaimers that the information on those databases may not be updated and does not constitute protection from claims of copyright infringement.
Public Domain Music
Songs and recordings that are in the public domain (in the country being used) are no longer protected by copyright law, and a license would not be required to stream or perform the music in a store or business.
However, the burden is on the business owner to ensure the desired music played (both song and sound recording) is in the public domain.
As a rule of thumb, the exposure to risk of copyright violation, legal action, financial damages, and loss of reputation is substantial.
What Happens if You Break In-store Music Laws?
U.S. copyright laws enable a person or business entity that holds music copyrights to seek payment or licensing from someone who publicly plays their music. Copyright holders have many remedies for infringement, including the demands for fees to cover losses or fines as specific within the law.
Playing just one song without permission can enable a copyright holder to demand fines from $750 to $30,000. If the court finds that someone willfully played songs without permission, the court may award statutory damages of $150,000 per infringement.
PROs often send letters to businesses caught playing music without a license. In these letters, business owners are encouraged to sign up for a license to avoid legal action. However, these letters can go unread, and if they are, the PROs head to court.
For example, a bar in San Francisco had a license with a PRO that wasn’t renewed. The facility allegedly kept playing music, however, and the PRO filed a lawsuit for $30,000 in damages (per song), as well as legal fees. The case is still working its way through the courts.
In a similar case filed in 2024 in Reno, a karaoke bar was hit with a lawsuit. The owners thought the music they were playing was protected, but the PRO disagreed.
Frequently Asked Questions
What qualifies as a “public performance” and when do I need a license?
A public performance usually involves playing music for a group of people who aren’t related and don’t know one another. For example, you may be able to play music for a backyard family gathering without a license, but if you play music for customers in a store, you would likely need a license.
Does using radio, TV, or internet radio exempt me from needing a license?
A license with one PRO allows you to play music from that PRO’s library alone. If you publicly perform music from a different PRO’s library without a license, you could be subject to fines and lawsuits.
Are there size or speaker number exemptions for small stores?
No. Even small stores that publicly perform music from a digital music service need appropriate licenses. Or, you can use a service licensed for background music purposes.
What happens if I don’t comply -- no license, but still play music publicly?
You could face lawsuits and fines if you do not obey laws applicable to playing music in a business establishment.
How much does licensing cost? What factors determine the fee?
Several factors influence the licensing cost, including, but not limited to, the type of facility, the number of people who might hear the songs, and more. As a result, the cost of the license can vary widely.
If a band or DJ plays in my venue, am I still responsible for licensing?
Yes. As the business owner, you are responsible for obtaining the proper license. The performers do not have to get the license.
References
What You Need to Know About Music Licensing for Your Business. (March 2012). Entrepreneur.
Beware the Copyright Boogeyman: He Might Be Listening in Your Restaurant.” (March 2012). LexisNexis.
How Is a Blanket License Used in the Music Industry? (July 2018). The Balance Careers.
Music Licensing 101: What Is A Performing Rights Organization? (September 2015). BandZoogle.
The True Cost of Sound Recording Piracy to the U.S. Economy. (2018). Recording Industry Association of America.
What Is SoundExchange? (November 2016). The Music Entrepreneur.
Leading-Edge Law: Don't Open Pandora at Your Business.” (March 2012). Richmond Times-Dispatch.
Pandora Partners With DMX on Legal, Personalized Streaming Music for Businesses. (November 2011). Rolling Stone.
11 Questions About Music Licensing. National Restaurant Association.
Licensing and Other Copyright Questions. (August 2010). National Association for Music Education.
Venues Refuse to Pay Songwriters While Profiting From Their Music. (January 2017). American Society of Composers, Authors and Publishers.
ASCAP Licensing Fee Lawsuits Spark Debate And Fear in Local Live Music Scene. (May 2017). Cleveland.com.
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