Background Music Strategy
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ASCAP vs. BMI: How to Stream Music Legally In Your Business
by Ryan Santangelo, Ph.D., Co-Founder & CEO, Dynamic Media
If you’ve investigated playing music in your business, you’ve likely heard of BMI and ASCAP licensing requirements. There are few ways for companies to legally play music without the appropriate licenses from these performing rights organizations (PROs). You may find you need a license even if you stream music.
But what is ASCAP? And how do you properly compare ASCAP vs. BMI? This article will answer those questions and explore what you need to know about legally playing music in your business.
What Are PROs?
PROs, or performing rights organizations, ensure songwriters, composers and publishers get the royalties they’re owed whenever their music is played. The organizations do this by issuing licenses to businesses where the music is played or performed. Companies caught playing music without a license receive licensing notices and are subject to fines ranging into thousands of dollars.
What Is ASCAP?
ASCAP (American Society of Composers, Authors and Publishers) is the oldest PRO in the United States. Founded in 1914, ASCAP is the only U.S. PRO controlled and created by writers, composers and music publishers. It has more than 960,000 members. ASCAP controls the licenses for over 19 million songs.
How It Works
The premise behind ASCAP is simple enough. Artists and other creators sign up with the group to manage licensing for their songs. ASCAP, in turn, charges fees for business owners and event organizers to play those songs. BMI works along similar lines. It gets tricky, though, because the artists and composers of songs can each be associated with different PROs, requiring you to obtain licenses from all the organizations involved.
What It Costs
The lowest annual ASCAP licensing fees range around $300, which is somewhat lower than BMI’s charges. ASCAP costs can go much higher, though. The final fee depends on a variety of factors, such as:
- Type of organization playing the music
- Kind of music (live or recorded)
- Size of the establishment
- Number of customers
- Amount of admission or cover charges (if any)
- Number of nights per week that music is played
Your fee can also change mid-year, say if you play recorded music during the winter but decide to host live music during the summer.
How It Benefits Businesses
Working with ASCAP benefits businesses because it assures them that they’re following all the necessary copyright laws associated with the music they play. Licenses from BMI provide the same assurances.
How It Benefits Artists
ASCAP helps artists by managing the licensing for their songs, ensuring they’re fairly compensated and recognized for their work and allowing them to concentrate on their creative efforts.
What Is BMI?
BMI (Broadcast Music Inc.) launched in 1939 and is the largest PRO in the U.S. It represents over 1.4 million songwriters, composers and music publishers who have created more than 22.4 million musical works.
How It Works
Like ASCAP, BMI works as a bridge between creators and the businesses that want to play their music. Songwriters, composers and music publishers join BMI and agree to have the organization manage the copyrights for their music. BMI then enters into for-fee agreements with businesses and other organizations that want to play that music.
What It Costs
BMI can charge as little as $378 for bars and restaurants, which is slightly more than ASCAP. But, like ASCAP, BMI costs are based on a complicated assessment scheme and can range into the thousands of dollars.
How It Benefits Businesses
BMI provides similar benefits for businesses as ASCAP. When businesses or event organizers sign up with BMI, they’re assured that the music they play is properly copyrighted.
How It Benefits Artists
Like ASCAP, BMI allows artists to focus on their creative work while it manages the licensing associated with their music.
Which is Best: ASCAP vs. BMI
Because their operations are similar, deciding between ASCAP vs. BMI can be challenging. Here are four factors to consider:
Catalog Size and Diversity: Both ASCAP and BMI have vast and varied music catalogs. The choice may depend on which organization holds the rights to the majority of music you intend to use.
Licensing Costs: The cost structure for music licensing varies between ASCAP and BMI. Each has different rates, which are influenced by the type of business, the size of the venue or audience, and the frequency of music usage. Review their fee schedules to see which aligns best with your budget and usage.
Type of Business: The nature of your business can influence your choice. For example, a live music venue might find one organization’s terms more favorable, while a restaurant or retail store might prefer the other based on the background music offerings.
Customer Service: The level of customer support and the ease of managing your account and licenses online can vary. Business owners should consider the user experience and administrative support offered by each organization.
If you choose one of the PROs, you must ensure you only play the music licensed by that PRO. You must also be wary since both groups may license the same song. In the end, the answer to the question, “Do I need BMI and ASCAP?” may be yes, you need both. To help with that decision, visit ASCAP’s repertoire page and BMI’s repertoire page to see what music each has licensed.
Keeping up with music licensing takes vigilance. ASCAP, BMI and other PROs aggressively protect their artists’ copyrights. They routinely send investigators to various venues, large and small, to see what music they play and whether they have the appropriate licenses.
An excellent way to ensure you’re always on the right side of the PROs is to subscribe to SiriusXM Music for Business, which offers music that’s all licensed and legal to play.
Is ASCAP Legal?
ASCAP is legal, even though some business owners feel like they’ve been through a shakedown after dealing with the PROs. Some people consider ASCAP and BMI a monopoly because they control around 90% of the song licensing market.
But the truth is that ASCAP and BMI operate under consent decrees with the U.S. government, allowing them to control song licensing in the United States. The decrees’ intent is to encourage competition among BMI, ASCAP and other PROs for members and music users.
Regardless of how effective you feel the decrees are, the fact remains that BMI and ASCAP are legal.
What Businesses Are Subject to BMI and ASCAP Licensing?
If you’re wondering if you need a music license, the answer is probably yes. Nearly every type of business needs to consider BMI and ASCAP licensing if they want to play music legally in public. Examples include:
What Are Alternatives to BMI and ASCAP Licensing?
Given the hassle and expense of BMI and ASCAP licensing, some businesses may simply do without music. But that doesn’t make sense, considering all music’s benefits. Other companies may decide to harness the power of the most popular music streaming services and use a personal music subscription to play music. However, that violates the services’ user agreements and copyright law.
Some businesses may opt to only play music already in the public domain, but identifying those songs is time-consuming, and the available music is limited.
An Easy, Legal Way to Play Music in Your Business
SiriusXM Music for Business cuts through the red tape and provides a simple way to play music with all the necessary licenses included. You can concentrate on running your business, secure in the knowledge that your music is legal and properly licensed. We design our service specifically for companies and provide the convenience and variety you want in a music streaming service.
With SiriusXM Music for Business, you can choose from over 240 channels and more than 10,000 Pandora Artist Stations, all legal and fully licensed. You get simplicity and peace of mind all in one neat package.
Frequently Asked Questions About ASCAP vs. BMI
The ASCAP vs. BMI debate can be nuanced, and questions abound. As a leading streaming music provider, SiriusXM Music for Business is well-positioned to provide the answers you’ve been looking for. Read on for the information you need.
Do I Need Both ASCAP and BMI Licenses?
Depending on the music you want to play, you may need licenses from both BMI and ASCAP.
Does ASCAP Copyright Your Music?
ASCAP does not copyright music. Artists are responsible for securing the necessary copyrights for their works. ASCAP licenses the music to ensure businesses abide by the copyright for the work.
Can I Switch From BMI to ASCAP?
Yes, you can switch from BMI to ASCAP. But, if you do so, you must ensure that you don’t play any music licensed by BMI and that you only play works by ASCAP artists.
Start Streaming Music Legally With SiriusXM Music for Business
Say goodbye to confusing, expensive ASCAP and BMI licensing requirements. Stream music with SiriusXM Music for Business for just $26.95 a month, with no long-term contract commitment. Subscribe today and take advantage of everything we offer.
