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5 Minute Read

Restaurant Music Licensing Laws to Avoid Getting Fined

by Ryan Santangelo, Ph.D., Co-Founder & CEO, Dynamic Media

Music is pivotal in creating the perfect ambiance for a dining experience, setting the mood and enhancing the overall customer experience. However, the melodies filling your restaurant involve a lot of forethought. You must carefully consider restaurant music licensing laws. Navigating the complexities of these laws is crucial for any restaurant aiming to provide a musical backdrop without infringing on copyright rules.

This guide will review U.S. copyright law, explore how you can comply with music licensing laws for restaurants and explain why SiriusXM Music for Business is a common sense alternative for playing music in a restaurant legally.

music licensing laws for restaurants
music licensing laws

Copyright Regulations Restaurants Must Follow

Understanding the fundamentals of copyright law in music is critical for any restaurant manager or owner looking to comply with music licensing laws. U.S. copyright laws protect the creators of musical works and other “original works of authorship.” This protection covers published and unpublished works, granting exclusive rights to the copyright holder to distribute, reproduce, perform and display their creations.

Music Copyright What Every Restaurant Should Know

In music, copyright protection extends to the musical composition (the melody, lyrics and arrangement) and the sound recording (the actual recording of performers playing or singing the composition). These are considered separate works with their own copyright. For instance, a songwriter who writes a piece of music holds the copyright to that composition, while the artist or record label that records the song holds the copyright to the sound recording.

This distinction is crucial in understanding restaurant music licensing, as playing music in an establishment may require obtaining permission from both copyright holders. The rights granted by copyright in music include the right to perform the music publicly, make copies, distribute them and create derivative works.

How to Legally Play Music in Your Restaurant

When music is played in a restaurant, it is considered a public performance under copyright law. Public performances can include live music, playing CDs or music streaming services and even the music played over a telephone on hold. To play music in a restaurant legally, the owner must obtain the proper licenses that permit them to host these “public performances.”

The necessity for licensing applies regardless of the method used to play the music — whether it’s a live band, a DJ, a music streaming service designed for commercial use or any other form of music playback.

Why this exists: The purpose of this requirement is to ensure that copyright holders are compensated for the use of their work in public spaces. The responsibility for complying with music licensing laws rests with the restaurant, not the band or DJ. Choosing the best music for your restaurant involves much more than just calling up a playlist.

What licenses your restaurant needs: There are specific licenses for the public performance of musical works and sound recordings. Under U.S. copyright law, performance rights organizations (PROs) such as ASCAP, BMI and SESAC manage the rights for musical compositions on behalf of songwriters and publishers. To play recorded music, restaurants need to secure licenses from these organizations, which then distribute the licensing fees as royalties to the copyright holders.

The Music Modernization Act (MMA) of 2018

You may have heard of copyright loopholes regarding music recorded before 1972, but the 2018 Music Modernization Act clarifies the law regarding these recordings. This act represents one of the most significant updates to copyright law in the music industry in recent decades. The MMA addresses several critical issues regarding music licensing laws, aiming to modernize and streamline the process for the digital age.

restaurant music licensing

One of the critical components of the MMA is the inclusion of the CLASSICS Act. This provision extends copyright protection to pre-1972 sound recordings, which previously were not federally protected under copyright law. Before the MMA, the copyright status of these older recordings varied by state, leading to a complex and often confusing licensing landscape. With the CLASSICS Act, these recordings are now protected similarly to post-1972 recordings, ensuring that artists and rights holders of older music are compensated when their music is played publicly, including in restaurants and other commercial settings.

Music Licensing Laws and the PROs

Under music licensing laws, PROs ensure songwriters, composers and publishers are compensated for the public performance of their music. Understanding the function of PROs and how to navigate their requirements is crucial for restaurants seeking to legally play music within their establishments.

PROs manage the rights of music creators by licensing their compositions for public performances and collecting royalties on their behalf. These performances can range from radio broadcasts and television to live music events and background music in commercial venues, including restaurants. Essentially, PROs act as intermediaries between music creators and end-users, ensuring that creators are fairly compensated whenever their music is played publicly.

In the United States, there are several major PROs that restaurants may need to engage with to secure the necessary licenses for playing music:

  • ASCAP (American Society of Composers, Authors, and Publishers): As one of the oldest and largest PROs in the U.S., ASCAP represents hundreds of thousands of songwriters, composers and music publishers.
  • BMI (Broadcast Music, Inc.): BMI licenses millions of musical works from songwriters, composers and music publishers and has a broad catalog spanning multiple genres.
  • SESAC (originally the Society of European Stage Authors and Composers): SESAC is unique in that it operates on an invitation-only basis, representing famous and emerging songwriters, composers and music publishers.
  • GMR (Global Music Rights): A more recent addition to the scene, GMR is a boutique agency that prides itself on offering more personalized service to a smaller, select group of music creators.

Working with the PROs can be challenging. Each organization represents a distinct group of songwriters, performers, composers and music publishers. In some instances, the songwriter of a piece might belong to one PRO, while the performer belongs to another. You would need a license from both organizations to play the song legally.

The PROs’ schemes to determine restaurant music licensing costs are also complex. You must provide a wide range of information, such as the size of the restaurant, whether customers pay a cover charge, how many customers you have and whether the music is played live or via recordings. Restaurants often need to consult with the PROs to ensure they pay the proper fees.

Non-Compliance: The Risks of Ignoring Music Licensing Laws

Restaurant music licensing is a crucial aspect of running your business that can easily be overlooked or misunderstood. For instance, some restaurant owners and managers believe they can use their personal streaming subscriptions in their spaces. But doing so violates the services’ terms of use and copyright law.  

Copyright violations can result in lawsuits, with statutory damages ranging from $750 to $30,000 per song and up to $150,000 for willful infringement of each work. The fines can add up quickly. For example, a New Jersey restaurant was ordered to pay $56,100 for playing 17 songs without the necessary BMI license.

In addition to fines, restaurants may be required to pay back licensing fees, potentially with interest, for the period of unlicensed music use. Legal battles over copyright infringement also can harm a restaurant’s reputation, impacting customer loyalty and business operations.

Exemptions for Smaller Restaurants

Navigating music licensing laws includes understanding the specific exemptions for small restaurants. These exemptions help reduce the burden of music licensing on smaller establishments while still respecting the rights of music creators. Understanding the criteria that define small restaurants and the exemptions available can help owners handle music licensing requirements more effectively.

In the United States, copyright law provides a specific exemption for small restaurants under certain conditions. The size of the establishment is a critical factor in determining eligibility for this exemption. Specifically, restaurants and bars with less than 3,750 square feet of space are considered small under this exemption. For those establishments exceeding this size, the exemption may still apply if the restaurant or bar uses no more than six speakers in total for music playback, with no more than four speakers located in any one room or adjoining outdoor space.

Small establishments meeting the criteria outlined above may play television or radio broadcasts for their customers without obtaining licenses from a PRO. It’s important to note that this exemption applies only to music played through these specific mediums — radio and television broadcasts — and not to other forms of music playback, such as streaming services, CDs or live performances. Read our guide on how to play music legally in restaurants to learn more.

SiriusXM Music for Business: A Simple Solution to Restaurant Music Licensing

Restaurant music licensing can be incredibly complex. But SiriusXM Music for Business cuts through the confusion, offering relief for restaurant owners and managers. We handle all the licensing so you can concentrate on running your business. Our music catalog is as vast as it is convenient. A SiriusXM Business subscription provides access to thousands of artists and hundreds of unique, professionally curated channels, all fully licensed and legal to play.

playing music in restaurant legally

Frequently Asked Questions About Restaurant Music Licensing

As a leading business music provider, SiriusXM Music for Business has a wealth of knowledge to share about restaurant music licensing. Read the following for the information you need.

Can I Play Copyrighted Music In My Restaurant?

As long as you have the appropriate licenses, you can play copyrighted music in your restaurant.

Is an ASCAP License Necessary?

An ASCAP license is necessary if you play music by creators represented by that organization.

What Music Can I Play Without a License?

You don’t need a license to play music in the public domain, but tracking down what pieces fall within this category is challenging.

What Sound Systems Can I Use to Play Licensed Music?

Dedicated devices and web players are just some of your options for playing music. Read our guide on the best sound systems for restaurants for additional details.

Trust Your Music Streaming Needs to SiriusXM Music for Business

Now that we’ve explored restaurant music licensing laws, you’re ready for the next step. SiriusXM Music for Business offers a simple, legal way to play the music you want in your restaurant. With a SiriusXM Business subscription, you can access more than 240 commercial-free music stations and 10,000+ Pandora playlists, all for the low price of $26.95 a month. Subscribe today and enjoy the freedom we offer.

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