Small business owners just like you want their customers to have the best possible experience in their stores, and this means creating the right atmosphere.
One of the simplest and most effective ways to create this atmosphere is by playing music.
Unfortunately, playing music in your business is not as simple as finding the right playlist on a music streaming service like Spotify or Pandora. You cannot legally use individual or personal streaming services for this, even if you pay a monthly subscription. These useful apps do not have the right music licenses for business.
Too many small business owners do not know this and end up paying hefty fines to the performing rights organization (PRO) that manages the license.
What Happens If I'm Caught Streaming Music?
First, it is important to understand why you cannot use Spotify, Pandora, YouTube, Google Play, Apple Music, or similar streaming services in your business. When you sign up for a standard monthly subscription or pay for individual songs, you have legal access to this music whenever you want to listen to it for private use. This means listening through headphones, listening at home or in your car, or playing music for friends.
However, when money is involved, the law changes. Playing music for customers in your business is technically a public performance of that song, not a private performance. A public performance is considered playing a song to an audience, especially one that might financially benefit the person playing the song.
Playing music in your business can impact the thoughts and feelings of your customers for the better, so they might spend more money there. If you financially benefit, United States intellectual property law states that the creator of the musical work should also financially benefit.
A performing rights organization (PRO) like BMI, ASCAP, SESAC, SOCAN, GMR, or others have representatives who randomly go to businesses, just like yours, and listen to soundtracks that might be playing. They then determine if the business has signed a contract with the PRO to legally play music in the business. If not, you could be fined thousands of dollars for the mistake.
Copyright law states that a fine for illegally playing music could be anywhere from $750 for the first offense to $150,000 for repeated or multiple offenses.
What Do I Need to Be Able to Play Music in My Store?
PROs manage the licenses associated with intellectual property law. They negotiate contracts with business owners like you to lease the right to play certain songs in the PRO’s catalog.
PROs also work with streaming services like Spotify and Pandora to lease rights to stream music for private use. These services do not negotiate licenses to play music in your business, which is usually a public performance or blanket license.
Once you negotiate a contract with a PRO, you will pay a monthly or annual fee to access that PRO’s catalogue. The three biggest PROs — BMI, ASCAP, and SESAC — each work with thousands of musical artists and have large catalogues.
You can get a lot of great music with one contract with one PRO, but the music you want might be licensed with a different PRO. Larger businesses often pay for multiple contracts with several PROs, but as a small business, this might not be possible for you.
How Much Does a License to Play Music in Your Business Cost?
PROs can negotiate changes to contracts with you to meet your needs better, but the contract can still be expensive. If you need multiple contracts with multiple PROs, you might end up paying more than you can afford, just to get access to certain songs.
This comparison table can help you understand estimated prices from the three largest PROs, along with the artists they share:
To obtain legal music in stores, you must form a relationship with PROs. Here's how to do it:
- Contact the PRO with the information we provided above.
- Provide details, such as the size of your shop, its location, and how many customers you serve every day.
- Review the contract sent by the PRO and ensure it meets your needs.
- Sign the contract, and pay the associated fees.
Know that a relationship with one PRO doesn't mean you can safely play every song. For true protection and the ability to play anything you want, you'll need licenses from all of the PROs.
Common Misconceptions About Music Licensing in Business
While most business owners understand that they should play music in stores, many have misconceptions about how to do so legally. These are the issues that seem to cause the most confusion:
Personal Streaming Accounts Are Legal in Stores
Many small business owners believe they can use a personal streaming account to play music in stores. Unfortunately, that’s not the case.
Consider Pandora. The terms of use for private accounts clearly state that the services are only for non-commercial, personal use. If you log into your personal account and play it as a business soundtrack, you’re violating both the terms and (potentially) copyright law.
Commercial Radio Is Legal to Play Anywhere
Snapping on the radio and picking up a local station may seem like an ideal way to play music in stores. However, the rules about radio use are quite strict.
If your store is smaller than 2,000 square feet and you have six or fewer speakers, you can play the radio without worrying about fees. However, if your store is even a tiny bit larger or you have even one more speaker, you could get fined.
One Relationship Covers All Songs
A signed and paid agreement won’t let you play every song you want to play. Some artists are covered by one PRO, and other artists choose a different partner. Some artists even change PRO affiliation within their career, meaning early songs require one type of partnership and later versions involve working with a different company.
No One Monitors These Rules
You may believe no one will pay attention to what you do inside your store. In reality, PROs care deeply about people playing music without a license. Some companies send in-person inspectors to small businesses to check for violations. Others might use your promotional tools (like announcements for special themed sales) to inquire about your licenses. If you break the law, you’re likely to get caught.
Pandora CloudCover Plans
All this might seem complicated, and you might be worried about how much time and money this process costs. Fortunately, there are now options to stream music in your business without worrying whether you have the right license.
Pandora CloudCover is dedicated to managing business licensing for music, so you do not have to. All you have to worry about is getting great playlists for your customers.
Pandora CloudCover has three plans:
- Music: This is the most basic plan, starting at $16.95 per month (when prepaid annually) after a 14-Day free trial. You can get Pandora CloudCover's curated playlists, or you can create your own custom mixes, including removing songs from playlists you like otherwise. You can also schedule music through the interface to play at certain times of day.
- Manage: If your business has multiple locations, this addition to the basic plan helps you play different playlists in different stores, so your employees and your customers do not hear the same songs on repeat. This starts at $21.50 per month (when prepaid annually), after a 14-Day free trial.
- Messaging: This third addition to the basic plan starts at $26.95 per month (when prepaid annually), with a free 14-Day trial to see if you like it. You can create your own personalized messaging that will play in your store, to keep your customers up-to-date on offers, upcoming events, and other interesting information. This plan allows you to intersperse this messaging into your playlists, so everything flows seamlessly.
You do not have to worry about huge fines or not getting access to the music you want when you sign up with Pandora CloudCover. We work with major PROs to get access to the latest hits, the greatest classics, and brand-new unknowns. With an easy-to-use interface just like streaming services you are used to, it will be easy for you to find and create great playlists for your customers, resting easy that the artists are being paid appropriately for their work too.
Frequently Asked Questions
These are the questions we often hear about playing music in stores:
Is it less expensive to work directly with a PRO than a company like CloudCover?
No. A relationship with one PRO won’t give you full protection to play any music you want. Typically, people need relationships with all of the PROs, and each one can be very expensive. A company like CloudCover can save you money.
With a license to play music in stores, can I use the tunes online too?
Not unless your contract specifically allows it. Most contracts explain how you can and can’t use the music. One made just for stores won’t cover other applications, such as social media videos.
Do I need a license if I’m playing CDs I purchased?
Yes. When you play the tunes inside a public space (like your store), it’s a performance and subject to copyright law. Whether or not you paid for the CD doesn’t change the fact that you’re playing the music in public.
References
Stores Are Misusing Background Music and It’s Costing the Record Industry Billions. (August 2020). Rolling Stone.
Playing Music in Your Store: How to Avoid Paying for It! NOLO.
Music to Match Your Business Goals. Pandora CloudCover.
Control Your Locations from Anywhere. Pandora CloudCover.
Drive Sales With In-Store Messaging. Pandora CloudCover.
Services Terms of Use. (February 2019). Pandora.
Second Opinion. JustAnswer.
Music Users. BMI.
Frequently Asked Questions. ASCAP.
Frequently Asked Questions. SESAC