Partner
If you walk in to a local book shop, the corner bar, the Apple Store, or Target you will likely hear some sort of music playing. Music can help set the tone for your location and enhance your brand while your customers are in your establishment. If you have a brick and mortar business, there are some serious legal considerations you need to be aware of when playing music for your customers.
There have been many instances in the news recently of businesses being sued for Copyright infringement for streaming music without the proper license. Joe’s on Weed St. in Chicago is just one example. It is much cheaper to purchase the right license than to pay settlement costs or court ordered damages and legal fees if you get sued for copyright infringement.
Copyright law protects the artists, publishers, and owners of music. Copyright gives rights holders the exclusive right to copy, reproduce, distribute and license their works. Streaming services like Spotify, Apple Music, and yes even CDs and iTunes music you’ve “purchased” is not available for public performance. That means that it is illegal to play this music in a commercial establishment.
Here’s how it works… When you pay for a subscription or buy an album on iTunes or a record at the store, you do not actually buy the music. Your payment provides you with a limited license to use the music for personal enjoyment. That means, you can play it for yourself in your home or on your devices for your own personal use and with family and friends. If you want to be able to play music for the public, you need a Public Performance License (PPL).
Many small businesses think they can get away with playing Spotify for their customers but that is a potentially expensive mistake. Music licensing entities are very active in inspecting commercial establishments like shops, bars, and restaurants. Often you will get a letter demanding that you both cease playing the music and pay a fine or an estimate of the fee you should have paid for the PPL. If you do not comply they will have the option of filing a copyright infringement lawsuit against you in federal court. A copyright attorney can help you negotiate but this is something that is better to avoid in the long run.
What can you do? The best way to avoid problems, comply with the law, and help make sure artists, collaborators and producers get their fair compensation for their work is to obtain a Public Performance License (PPL). One option to obtain PPL licenses for the music you want to play from licensing organizations. There are three major organizations in the United States that license music: Broadcast Music, Inc. (BMI), American Society of Composers, Authors, and Publishers (ASCAP) and Global Music Rights (GMR). These are performing rights organizations that the songwriters, composers and publishers join. They have the ability to grant PPLs. This is helpful because it streamlines the process of having to purchase a license from each individual rights holder.
If purchasing PPLs, research which music you want to play and which organization the rights holders belong to. Because of the collaboration in the music industry you most likely will need a license from all of the organizations. There are also monthly reporting requirements to comply with for these licenses. Another option is to subscribe through a third party licensor like Spotify’s Soundtrack Your Brand service or CloudCover Music. These companies pay for the PPLs and then sell sub-licenses for a fee. You will want to make sure you comply with the terms and conditions of these services.
Overall it will be worth it to save yourself time and money upfront by purchasing licenses for the music you’d like to share with your customers versus facing a copyright lawsuit for illegal streaming. If you have received a letter regarding copyright infringement or just have some questions, contact Revision Legal.
Music copyright is more complex than most people realize because a single song typically involves two separate copyrights: the musical composition copyright (covering the melody and lyrics, owned by the songwriter or publisher) and the sound recording copyright (covering the specific recorded performance, typically owned by the record label). Both copyrights are separately licensed, and a business playing music publicly may need licenses covering both.
The right to publicly perform a musical composition is governed by 17 U.S.C. § 106(4) of the Copyright Act. A “public performance” includes any performance at a place open to the public or at any place where a substantial number of persons outside a normal circle of a family and its social acquaintances is gathered. A retail store, restaurant, gym, or bar falls squarely within this definition. Playing music over a speaker system without a PPL is a public performance that infringes the composition copyright.
The sound recording copyright — the recorded version of the song — involves a separate set of rights under 17 U.S.C. § 106(6), which covers digital audio transmissions. Streaming a recording through a platform like Spotify or Apple Music implicates these digital transmission rights. Importantly, over-the-air AM/FM radio broadcasts of sound recordings are not subject to the public performance right for sound recordings (only for the underlying composition), but streaming services involve digital transmissions that require separate licensing.
The three major performing rights organizations (PROs) in the United States — ASCAP, BMI, and GMR — represent the majority of commercially released music. SESAC is a fourth PRO that operates on an invitation-only basis and also has a significant catalog. For practical purposes, businesses that want to play a wide variety of commercially released music should obtain blanket licenses from ASCAP, BMI, and GMR at minimum.
PRO blanket licenses cover the public performance rights in the musical compositions represented by that PRO. License fees are calculated based on a variety of factors, including the type of establishment, seating capacity, whether music is live or recorded, and whether admission is charged. PRO representatives periodically inspect commercial establishments to verify compliance, and they maintain records of which businesses have licenses and which do not. The licensing process is straightforward: you apply directly on each PRO’s website, pay the annual fee, and receive the blanket license.
The stakes for playing unlicensed music in a commercial establishment are real and substantial. Under 17 U.S.C. § 504, a copyright owner whose work was infringed can seek either actual damages and lost profits or statutory damages. Statutory damages for copyright infringement range from $750 to $30,000 per work infringed, and up to $150,000 per work for willful infringement.
In a typical commercial music infringement scenario, a PRO investigator visits a business, documents the songs being played, and then initiates a demand letter. If the business does not respond or refuses to obtain a license, the PRO may file a copyright infringement lawsuit. Because each song played without a license is a separate infringement, and because a business may play dozens of songs in a day, statutory damages can accumulate quickly. Courts have entered judgments against small businesses ranging from tens of thousands to hundreds of thousands of dollars for unlicensed music performance.
PROs are also entitled to recover attorneys’ fees in successful infringement cases where the infringed works were registered with the Copyright Office. See 17 U.S.C. § 505. Given that virtually all commercially released music is registered, attorneys’ fee awards are the norm in contested PRO infringement cases, not the exception. This makes defending an infringement suit extremely expensive.
If your business plays music for customers or employees in a commercial setting, take the following steps to ensure compliance:
If you have received a letter regarding copyright infringement or just have some questions, contact the copyright lawyers at Revision Legal at 231-714-0100.
Being sued for copyright infringement raises immediate questions about liability, damages, and defenses. Here are the three most important questions to ask your attorney right away.
Read more about Sued for Copyright Infringement? 3 Key Questions
The EU Copyright Directive introduced significant changes to online copyright enforcement in Europe. Here’s what the directive requires and how it affects platforms and content creators.
Read more about EU Copyright Directive: What You Need to Know
The fair use doctrine allows limited use of copyrighted material without permission based on four statutory factors. Here’s how courts analyze each factor and what they look for.
Read more about Fair Use: The Four Factors to Consider