Do I Need a Music License? Business Guide To Music Licensing Laws

Music licensing laws are a complicated and often confusing topic, especially regarding the legality of playing music within a business. These days, it feels like playing music in public places is almost a necessity to maintain customer satisfaction, leading many business owners to ask, “Do I need a music license?” After all, who wants to eat or shop in complete and total silence?

Luckily, obtaining a license to play music legally in an establishment isn’t too difficult for business owners as long as you know where to look. If you’re a business owner looking to play background music in your shop to enhance the customer experience, keep reading to learn everything you need to know about music licensing laws.

Why We Play Music in Public Places

Many business owners, small and large, recognize the impact of being able to play background music in their shops. Music can entertain patrons, set the mood and create a unique, more relaxing atmosphere for guests. Typical examples of playing music in public places include:

• Background ambiance in cafes and restaurants to set a certain mood.
• Upbeat music at the start of a meeting or event to motivate and excite attendees.
• Hold music for business phone lines.
• Energetic and exciting music in gyms to provide energy to customers.
• Relaxing music in spas or massage clinics to relax clients.
• Modern music in retail stores to create hip shopping environments.

There are plenty of other reasons business owners love to play background music in their establishments. Still, without holding the proper license, it’s unlikely they can take advantage of these opportunities.

Can You Play Music Without a License?

According to music licensing laws, you must obtain a music license if you perform, use or play music in your business or organization. Business owners can only play background music or perform copyrighted music if the relevant copyright holder (those who have created the music) gives express permission.

It works just like movie licensing. Everybody knows that a person can’t use a Netflix account to open a movie theatre. The movie is owned by the movie company, and the cinema needs to buy a license to play that movie, which attracts patrons who buy tickets and popcorn that makes money for the business. The exact same rules apply to music. Every song is owned by a musical artist, and the business needs to buy a license to play that music, which creates an environment where guests stay for one more drink, shop a little longer, or come back for a return visit. The music licensing fees are collected and paid to the artists that created the music, just like the movie royalties are collected and paid to the studios that created the movie.

While playing music in shops, cafes and restaurants is extremely common, many business owners do not have a proper license and fail to realize they could be subjected to a fine of $750 to $150,000 per infraction.

Even if a business owner has a paid membership to a streaming service like Spotify or Apple Music, or if they have purchased the music legally, they still cannot play background music in their business without first obtaining a license to stream copyrighted music. According to music copyright laws, any purchased or streamed music is still copyrighted and owned by someone.

When you sign up for a music streaming service or purchase MP3 downloads, a person does not become the owner of the music. Instead, they are given a license to play music as a consumer for their own personal pleasure. However, when that music is played in a commercial space, it’s no longer just for personal enjoyment – it’s there for commercial purposes and to help a business achieve specific goals, which presumably will help them make more money. That’s why music copyright laws say that music publishers and artists must be compensated if their music is played in a business.

What Music Licenses Do You Need?

There are four organizations that collect and enforce music licensing for business. ASCAP, BMI, GMR, and SESAC require business owners to obtain a license to stream copyrighted music if iPods, CDs, DVDs, streamed music or performed music is played live. These four companies are performing rights organizations (PROs) listed by name in U.S. copyright law to be music licensing intermediaries. Each performing rights organization represents different songwriters and publishers. Performing rights organizations collect licensing fees for public performances of music and distribute them to songwriters and publishers.

What Music Can You Play Without A License?

There are two broad categories of music that can be performed legally without the need to obtain a public performance license to play music in a business from a PRO:

1. Music that holds no copyright. This includes public domain music and music available under a CC0 (No Rights Reserved) music license. Typically, public domain music is music originally copyrighted prior to and including 1922.
2. Music created by a musician or composer who is not affiliated with any PRO.