You Might Need a License to Play Music in Your Small Business

Date: September 16, 2011

We recently heard from an NFIB member who’d been threatened with a lawsuit and exorbitant penalties after a music-licensing organization found that she’d been playing music at her business without a license.

There’s a lot of confusion about licensing. Here’s what you need to know:

What are ASCAP, BMI, and SESAC?

These three companies are performing rights organizations (PROs), which are listed by name in U.S copyright law to be music licensing intermediaries. The copyright law of the United States defines a PRO as, “An association, corporation, or other entity that license the public performance of non-dramatic musical works on behalf of copyright owners of such works.” Each performing rights organization represents different and unique songwriters and publishers. PROs serve both the creators of music and music users through music licensing services. You can research any song or writer in the PROs repertory on their respective websites.

What do ASCAP, BMI, and SESAC do?

The PROs, ASCAP, SESAC, and BMI, represent songwriter’s and music publisher’s copyrighted works and their right under the Copyright Law to publicly perform those works (See below for the definition of “public performance”). They act as a clearinghouse between the copyright owners and those who wish to publicly perform music. They collect licensing fees for public performances of music and distribute those fees to their members/ affiliates (songwriter and publishers). Under United States Copyright Law, any business that performs copyrighted music in their establishment is required to obtain advance permission from the copyright owner(s) or their representative agency (PRO).

For business owners, this often means letters, phone calls, emails and in-person visits to educate and collect licensing fees for public performances of music. A typical ASCAP, SESAC, or BMI license asks for licensing fees based on the business usage of music. The PRO’s reach out to all types of businesses using music publicly.

What constitutes a public performance of music?

According to the Copyright Law of the United States, a public performance of music is defined as, “Music performed in a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” (Are you a lawyer? Or just want to see the law yourself? Click here.)

Common forms of public performances in small businesses include but are not limited to, streaming/iPod, CD’s, TV’s, music on hold, bands, DJs, or other live performances.

Don’t I already pay to license that material when I buy the CD, subscribe to a streaming service, pay the band, or hire a DJ?

Probably not. 

If you have live performers, a DJ, karaoke or play legally purchased songs on an iPod or CD, the public performances of these types of music usages require the advance permission from the copyright holder or their representative agency (PRO).

If you have a jukebox, pay a service to provide background music for your establishment, or pay for a streaming service, then you may already be licensed.  Some of these services already have licenses with the three PROs, you should talk to your provider to make certain you are not breaking the law.

What about playing radio or television broadcasts?

There are two “small business exceptions” that allow certain small businesses to play radio or television broadcasts in their establishments without having to pay any additional licensing fees.  The exceptions apply to:

1. Any establishment with less than 2,000 gross square feet, and any food service or drinking establishment with less than 3,750 square feet.

2. Any business establishment with greater than 2,000 square feet, and any food service or drinking establishment with greater than 3,750 square feet provided that they use fewer than 6 speakers or TVs, no more of 4 of which are any one room, and with a screen size of less than 55 inches.

To qualify for these exceptions, the business owner must not charge an admission fee nor play any other music other than terrestrial radio and TV.

Can I play any music without violating copyright laws?

Yes, you can play public domain music. The term “public domain” refers to songs that are not protected by intellectual property laws such as copyright. Works in the public domain may be used freely without the permission of the former copyright owner.  Generally speaking, public domain music is music originally copyrighted prior to and including 1922. If you want to read more please click here.  

If you only use broadcast radio or TV for background music, then make sure you comply with the square feet and equipment restrictions discussed above. 

If you use a service to provide background or hold music, ask your service provider directly if their fees include ASCAP, BMI, and SESAC authorization, and make sure they state so in your service agreement.

If you are playing iPod, CD’s, DVD’s, streaming music, or have live performances that include popular music, then you probably will need a license from ASCAP, BMI, and SESAC.

Related Resources:

10 Music Square East
Nashville, TN 37203

35 Music Square East
Nashville, TN 37203

2675 Paces Ferry Road, SE, Suite 350
Atlanta, GA 30339


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