Licensing Legalities

If you’ve ever caught yourself humming a tune but were unsure where you picked it up or found yourself listening to the same song on repeat, there’s probably a reason why you can’t get those tracks out of your head.

More than just a catchy rhythm or clever lyrics, research shows music can have a profound impact on one’s life. In addition to shaping our perception of things around us, music can affect everything from mood to productivity or spending habits. In addition to the tracks you listen to in the car or while you’re working out, you may have noticed that most brick-and-mortar businesses usually have some form of audio playing in the background.

For businesses, playing music for customers isn’t as easy as picking an album and playing it on repeat. In fact, setting their favorite playlists can turn into a major legal headache if they aren’t careful. Keep reading to get an inside look at what goes into music licensing for businesses, how often businesses opt for music as background noise, and the consequences of not getting the proper licensing before pressing play.

business owner playing music percentages

According to our survey of 991 business owners, more than half (52%) play music on their business’ premises, and nearly 1 in 3 (32%) do so every day. The number of business owners incorporating music into their spaces was even higher (86%) among those with customer-facing brands.

Getting the Basics Down

Before you can start to think about what you want to play as a business owner, or what your customers might want to hear, it’s important to first think about copyright law.

licensing info for businesses

If you decide to play music in a commercial setting, those tracks are considered a public performance. As long as you’re playing music where a group of people can hear it, the music industry likely requires a certain level of licensing to legalize your song selections. As you can see from the chart above, there are a number of benefits to obtaining a public performance license (PPL), and a variety of ways you can go about securing the authorization needed to effectively turn up the speakers.

Turning the Volume Up

Music can have a profoundly positive impact on the mood and emotions of customers or clients. Furthermore, it adds to the atmosphere. But business owners should be aware that simply pressing play on their favorite playlist might actually get them in trouble.

business owners' music habits

With clients in mind, nearly 58% of businesses made it a point to play music every day, and 19% played music on-site a couple of times a week.

As we found, the vast majority of business owners used their own personal streaming accounts (or music streaming accounts made for businesses) to build playlists for their customers. More than 2 in 3 business owners also admitted to not having a license to play music on-site, with many unaware they needed a license in the first place.

Conscious of the Consequences

While business owners may not be aware of the legal requirements behind music, everyone knows music can elicit and even alter emotions. But background music’s effect doesn’t stop at feelings – it has also been shown to impact behaviors, including food choices and spending.

Purchasing a license to play music in an establishment puts a bit of control into retailers’ hands and provides an opportunity for a high reward with minimal investment. Plus, it helps business owners avoid hefty fines while rewarding artists who may not otherwise see much profit from their product.

estimated payments and fines

So, how much are business owners willing to spend to reap the rewards and avoid the consequences? On average, respondents were willing to spend $31 a month to secure music licensing for their company. When asked what level of fine they expected for playing unlicensed music on-site, business owners estimated having to pay nearly $1,150 if they were discovered. In reality, fines can range from $200 to $150,000 depending on the circumstances of the infringement and how much the business owner knew about the copyright laws in place.

Actual Consequences

copyright infringement cases

Of course, wider distribution can equate to much heavier fees. The stationary fitness bike company Peloton is currently being sued for over $150 million in damages for including tracks on their playlist without proper authorization.

ASCAP vs Dam Bar

Big businesses aren’t the only brands who can face legal penalties for not acquiring the proper licensing fees. In 2018, a small bar in Washington was one of 11 establishments being sued for copyright infringement. Including attorney’s fees, the bar was sued for over $120,000 in total damages for playing music as a form of live entertainment without the right licensing in place.

How to Ensure You Are Playing Legal Music in Your Business

Music is critical to delivering an exceptional customer experience. But playing music illegally comes with consequences that can cripple your success.

Ensure that you're playing music legally by asking yourself a few key questions:

  1. Are you exempt? If you meet the exemptions we listed above, you may be able to play content from a radio station without a license.
  2. Do you have an agreement with a PRO? Check out the performing rights organizations we listed above. You can work directly with them to cover your legal requirements.
  3. Do you only play music from that PRO? An agreement protects you from litigation if you only play music covered by that organization.

There's an easier way to ensure you're following the law: Work with a streaming service.

Companies like this provide access to the songs you (and your customers) love. Create your own playlist of tunes, or choose from preselected options. Know that all the legal issues are taken care of, so you can play music without worry.

These are a few potential partners:

At Cloud Cover Music, we offer a free trial, so you can experiment with our service and see if we're the right fit for your company.

Finding Your Tunes

Music is an important part of almost everything we do. From the time you spend waiting in the lobby for a dentist appointment to finishing your holiday shopping, the music you hear can help put you in a better mood or spend more at a store. For business owners, it isn’t as simple as picking the right tunes, though. Copyright law requires businesses to acquire the proper licensing to play music for customers or clients and can levy substantial fees against business owners who disregard (or simply don’t know) the law.

At Cloud Cover Music, our mission is to make music licensing easy for businesses and business owners. With plans as low as $16.95 a month, you’ll never have to worry about what’s playing through your speakers again. With easy monitoring and control of any business location, we have a plan for every business type and size. Visit us online at today to learn more!

Methodology and Limitations

For this project, we surveyed 991 business owners about their music habits on their business premises and on music licensing for businesses. 478 played music on premises at least a couple of times a year. Outliers for answers about estimated fines and monthly payments were excluded. The estimated statutory damages owed are derived from respondents’ answers and numbers published in Chapter 5 of the copyright law. Please note that these numbers are only estimates. Some respondents might be exempt from purchasing licenses to play music on their business premises.

Respondents ranged in age from 18 to 77, with an average age of 40 and a standard deviation of 12.1. 537 respondents identified as women, and 453 identified as men. Two respondents identified as nonbinary.

These data are survey-based and depend on the self-reported recollections of respondents regarding their everyday life. Limitations with such data include telescoping, selective memory, and exaggeration. We did not statistically test our data, and our campaign is exploratory. The data were not weighted.

Fair Use Statement

Do you want to share these findings on business owners and music licensing? The graphics and information found on this website are available for use in any noncommercial capacity. Feel free to share them as much as you’d like across the web, on social media, and at the office, but please make sure to link back to this page. Thank you!

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