Avoiding Music Licensing Litigation: The Best Practices for Businesses to Stay on the Right Side of the Law

Businesses generally need a public performance license when using copyrighted music. This license allows you to play music in a public space — be it a cafe, a store or any commercial business. Performing rights organizations (PROs) like BMI, ASCAP, SESAC and GMR manage these licenses in the United States, providing companies with legal access to vast music libraries while ensuring artists receive royalties.

SiriusXM Music for Business simplifies the entire process by obtaining all the necessary copyrights for you. Instead of dealing with the PROs, you can stick with what you know best — running your business.

Common Pitfalls and Mistakes When Using Copyrighted Music

Hardworking business owners and managers can easily and innocently overlook essential issues that could result in music licensing litigation. But improperly using copyrighted music isn’t a minor faux pas; it’s a stark violation of legal standards and comes packed with heavy-duty consequences. Music copyright infringement cases involve substantial fines and pose a tangible risk to a business’s reputation and financial health.

Misinformation compounds these risks further. A widespread myth persists that playing music from personal streaming accounts in commercial spaces is permissible. The reality is far different. Personal streaming services are strictly for personal, non-commercial use. Using these in a business environment without securing the necessary public performance licenses violates music copyright infringement laws and exposes businesses to music licensing litigation.

Another stumbling block surfaces in the form of misunderstandings related to the scope of licenses. A single license doesn’t allow businesses to use the music in any form or fashion. Each license type has its own set of permissions and restrictions. For instance, a public performance license doesn’t grant rights to reproduce and distribute the music, which would require a mechanical license. You need to understand these specifics to avoid music licensing litigation.

The easiest way to lessen your chances of litigation is by subscribing to SiriusXM Music for Business. With our streaming music service, you can avoid all the pitfalls and enjoy all the benefits of using licensed music.and passion.

The Consequences of Music Licensing Litigation

The legal and financial repercussions of violating music copyright infringement laws can’t be overlooked. Fines in music copyright infringement cases can range from $750 to $30,000 per work infringed upon. If the infringement is deemed willful, the penalties can rise to $150,000 per infringed piece.

The business could also owe money for the actual harm caused to the owner of the music copyright, including lost sales or other impacts. And the business may have to pay for any profit from using the music illegally, especially if other fines or payments didn’t cover that profit.

Unforeseen expenses like these can throw a wrench into the financial stability of businesses, particularly those operating on thin margins. But copyright infringement cases in music can also harm a business’s reputation. The PROs that manage music licensing regularly pursue well-publicized lawsuits against companies suspected of improperly using licensed music.

In 2023, ASCAP lodged 13 music infringement actions, and BMI filed an action against an Arizona pub suspected of playing six unlicensed songs. With customers becoming increasingly conscious about the ethical conduct of the places they patronize, falling foul of legal and ethical standards can cast a shadow over a business’s reputation. News of music licensing litigation can significantly tarnish the public perception of a company, potentially eroding customer trust and loyalty.

The consequences of copyright infringement can be severe and even terrifying, especially for small businesses. But SiriusXM Music for Business takes the worry out of the process by giving you a simple way to legally play fully licensed music.

How to Avoid Music Licensing Litigation: The Hard Way

Doing right by musicians while also shielding your business from potential legal mishaps starts with securing the proper licenses for using copyrighted music. Determining the kinds of licenses you need boils down to understanding your business and how it uses music. Are you playing it in a physical space for customers? That requires a public performance license. Is the song being used in online promotional materials? You need a sync license. Knowing which license is right ensures you stay within the confines of the law.

Obtain Your Licenses

You also must decide where to get your licenses. The artist, composer and publisher of a piece of music might each contract with a different PRO, requiring a license from every organization involved. As a business owner, it’s your job to make sure each license is secured.

Document the Music You Play

The quest for compliance doesn’t end with obtaining music licenses. You need to keep accurate records of the music you play and the licenses you’ve acquired. This involves noting the tracks played, the licenses purchased and any relevant communication with licensing bodies. A well-organized record-keeping system not only aids in potential audits but also assists in renewing licenses, ensuring you’re always on top of your obligations.

Perform Routine Compliance Audits

You also need to regularly check on your business’s adherence to licensing rules. These compliance audits, whether conducted by in-house teams or external experts, scrutinize your music usage and licensing records, ensuring no inadvertent violations. Routine audits help you maintain compliance and pinpoint potential issues before they balloon into music licensing litigation.

Educate Your Staff

Your staff needs to understand the nuances of using copyrighted music. Internal policies, which might include guidelines on music usage, approved playlists or methods for obtaining new music, provide a clear roadmap for all staff members. Complementing these guidelines with regular training and information sessions keeps everyone on the same page, helping to avoid music copyright infringement cases.

One key advantage of opting for a licensed business streaming service like ours is the simplicity it brings to the music-playing aspect of your operation. You get a vast array of licensed channels and legal music options tailored for diverse business environments. Your business’s atmosphere always matches your brand without the need to manage individual song licenses.

Using a dedicated business music streaming service minimizes the likelihood of facing music licensing litigation. This can be particularly helpful for businesses that might not have the expertise or resources to navigate the intricacies of music licensing on their own.

Frequently Asked Questions About Music Licensing Litigation

As a leader in business music streaming services, SiriusXM Music for Business is uniquely positioned to answer your questions about music licensing litigation. Read the following to learn more.

What Steps Can I Take to Ensure That I Comply With Licensing and Copyright Laws If I Choose to Play the Radio in My Business?

Your first step is to obtain public performance licenses from all the major PROs to cover whatever music may be played on the radio. Then, you’ll need to document what songs are played and which license is associated with each piece. You’ll also need to regularly audit your music usage to ensure compliance and educate your staff so they don’t violate music copyright infringement laws. Or, instead of playing the radio, you can sidestep the entire process and subscribe to a service like SiriusXM Music for Business.

How Can I Determine If Playing the Radio Falls Under Fair Use or Other Legal Exceptions in a Commercial Setting?

You must abide by the guidelines in the Fairness in Music Licensing Act of 1998. Your business must be under 2,000 square feet (or 3,750 square feet for drinking and eating establishments), you can’t charge customers an admission fee or cover charge and you must use no more than four speakers in any enclosed space and adjoining outdoor area. You also can’t hook your radio up to your phone to use as hold music.

Who Is Responsible for Paying Music Licensing Fees?

Whether the music is live or recorded, the business owner is responsible for securing and paying for the necessary music licenses.