Background Music Strategy
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ASCAP Music Licensing for Businesses: A Comprehensive Guide
by Ryan Santangelo, Ph.D., Co-Founder & CEO, Dynamic Media
From the gentle melodies in a café to the energizing beats in a fitness center, the right music can set the perfect tone for your business environment. However, playing music in public settings requires more than pressing play on a playlist. Business owners and managers must understand ASCAP music licensing for businesses to legally play music in their establishments.
ASCAP, or the American Society of Composers, Authors, and Publishers, is a performing rights organization (PRO) that controls the rights to more than 19 million musical works, some of which you’ll likely want to play in your business.
Read on for a clear guide to how ASCAP works and how to keep your business on the right side of U.S. copyright laws.
What Are Performing Rights Organizations?
PROs are intermediaries between songwriters, composers and music publishers and the businesses that want to use their music. These groups collect royalties on behalf of music creators whenever their compositions are played publicly — this includes locations like restaurants, retail stores and radio stations, as well as online streaming platforms.
The primary mission of PROs is to ensure that the individuals who create the music you play are compensated fairly for the public use of their work.
Major PROs
Besides ASCAP, other major U.S. PROs are BMI, which is the largest PRO, and SESAC, which operates by invitation only. Knowing which PRO you need to deal with can be confusing. The songwriter of a piece might work with one organization, while the performer might be aligned with another PRO. You would need licenses with both groups to play the song without violating copyright laws. Read more about what you need to know about streaming music legally in your business.
What Are Public Performance Licenses?
Music licensing can be complex, as there are several licenses, each serving a different purpose depending on how the music is used. Some of the main options include:
Mechanical Licenses
This license is required when a song is reproduced, recorded or distributed. It’s most commonly used for CDs, vinyl, digital downloads and personal streaming services. The fees from these licenses go to the songwriters and music publishers based on the number of copies made or streams.
Synchronization Licenses
This type of license is used when music is synchronized with visual media, such as in films, TV shows, advertisements, video games and online videos. Sync licenses are negotiated directly with the music publisher, and the fees can vary widely depending on usage. The license covers the right to pair the music with visuals but does not cover public performance rights.
Public Performance Licenses
This is the type of license that PROs issue. A public performance license is what restaurants, cafes and other businesses need to play music, whether it’s recorded or live, in their establishments. This license covers the performance rights, meaning the right to play the song publicly, but it does not cover the right to record or distribute the music. When we talk about ASCAP music licensing for businesses, we mean this type of license.
Learn more about whether you need a music license for your business
Where ASCAP Comes In
ASCAP is the oldest U.S. PRO and the only one created and controlled by composers, writers and music publishers. It represents over 975,000 music creators, and ASCAP copyrights cover creators like Billie Eilish, Garth Brooks, Jay Z and Lin-Manuel Miranda.
Before ASCAP was formed in 1914, songwriters and composers often saw their works performed publicly without compensation. This led to a call for an organization that could advocate for their rights and ensure they received fair pay for the use of their music.
ASCAP’s primary mission is to license and promote its members’ music and to protect the copyrights pertaining to their works. It does this through monitoring public performances of music — whether they be live, broadcast on radio or television or streamed over the internet — and ensuring that composers, songwriters and publishers are compensated for the use of their creations. You should be aware that ASCAP music licensing for businesses applies even if you only play music over the television or radio.
How an ASCAP Licensing Fee Works
Navigating ASCAP fees can seem daunting at first, but understanding the structure and factors affecting these costs can provide clarity if you want to play music legally in your business. ASCAP structures its licenses to accommodate the diverse ways in which music is used across different types of establishments.
Several factors influence an ASCAP licensing fee, reflecting the varied nature of music usage among different businesses. The primary considerations include the:
- Type of business
- Size of the establishment or audience
- Method by which music is played (live, recorded or streamed)
- Frequency of music usage
For instance, a large concert venue will likely incur higher fees than a small boutique because of the larger audience and potentially more frequent music events.
Additionally, the specific use case of music within the business plays a crucial role. Background music in a restaurant, featured performances in a music venue or music used in fitness classes all represent different types of usage and are assessed differently for ASCAP licensing fees.
To provide a clearer picture, here are examples of typical fee ranges for different types of businesses:
Restaurants and Bars
Fees can vary significantly based on the establishment’s size and the method of music performance (e.g., live, jukebox or background music). A small cafe playing background music might pay a few hundred dollars annually, while a larger venue hosting live music could pay several thousand dollars a year.
Retail Stores
As with restaurants, fees are influenced by the store’s square footage and the type of music usage. Small retail shops might see annual fees in the lower hundreds, whereas larger department stores could face a higher ASCAP licensing cost.
Fitness Centers
The size of the facility and the classes offered can affect the licensing fee. Smaller gyms might pay fees in the lower to mid hundreds, while larger chains with multiple locations and classes might encounter higher fees.
How to Apply for an ASCAP License
You need to apply for a license before you can find out your ASCAP licensing cost. This is a multi-step process that you must carefully prepare for. Here’s a simplified guide you can follow:
- Gather Necessary Information: Prepare the necessary information before starting the application. This includes your business name, contact details, type of business, size of the establishment or audience and how you intend to use the music. Having this information at hand will expedite the process.
- Visit the ASCAP Licensing Portal: Go to the ASCAP website and navigate to the licensing section. Choose the category that best fits your business and begin the application process. The website provides detailed guidance for each type of business, ensuring you find the proper license.
- Complete the Application: Fill out the application form with the required information. Be thorough and accurate to avoid delays. You’ll need to provide details about your business and how you plan to use the music, among other things.
- Submit and Wait for Approval: Once you’ve completed the application, check it for accuracy, then submit. ASCAP will review your application and may contact you for additional information. This process can take some time, so patience is vital.
- Review and Pay for Your License: Once your application is approved, you’ll receive a contract outlining your license terms and the annual fee. Review this carefully, and if everything is in order, pay to activate your license. ASCAP typically offers several payment methods for convenience.
You’ll likely have numerous questions along the way. Don’t be afraid to contact ASCAP for the answers you need.
What Happens if You Don’t Pay an ASCAP Licensing Fee?
Your ASCAP licensing cost may seem like an unnecessary expense. However, the consequences of not paying an ASCAP licensing fee can be severe.
Copyrighted music is protected under federal law, and using this music in a public setting without the appropriate licensing infringes on the copyright holder’s rights. This infringement exposes your business to legal action from ASCAP. The organization diligently monitors the music businesses play and will send a licensing notice to any establishment it believes is playing its music without proper permission.
If a court finds a business used copyrighted music without a license, it can levy hefty fines and legal fees. These fines vary widely but can reach as high as $150,000 per song for willful infringement and include the legal costs associated with the lawsuit. The business also might be required to stop using all copyrighted music until it obtains the appropriate license, which could negatively affect its atmosphere and customer experience.
SiriusXM Music for Business: An Affordable Alternative to ASCAP Music Licensing for Businesses
Complying with ASCAP music licensing for businesses is no easy feat. It requires constant vigilance and a thorough understanding of your obligations. But SiriusXM Music for Business takes the pain out of playing music. We handle all the licensing fees, so you don’t have to. With a SiriusXM Business subscription, you can legally access millions of songs without any worries.
Frequently Asked Questions About ASCAP Music Licensing for Businesses
As a leading commercial music streaming service, SiriusXM Music for Business is ideally situated to answer your questions. Read on for the information you need about ASCAP music licensing for businesses.
How Much Is an ASCAP License?
Depending on the size of your establishment and the way you use music, your ASCAP license could cost from a few hundred dollars to thousands.
How Much Is an ASCAP License for a Bar/Restaurant?
According to ASCAP, its lowest annual fee is a little more than a dollar per day.
How Does a Business Avoid ASCAP Fees?
A business can avoid paying ASCAP fees by not playing any music for which ASCAP manages copyrights. Alternatively, you can subscribe to a service like SiriusXM Music for Business and not have to worry about ASCAP copyrights.
Stream Music Legally With SiriusXM for Businesses
Now that you understand ASCAP music licensing for businesses, you’re ready for the next step. SiriusXM Music for Business offers over 240 channels and thousands of Pandora artist stations for you to choose from. Plus, you have access to more than 100 Xtra channels of themed and seasonal music, so there’s something just right for every time of year.
