Pay Or Play - Do You Need a License to Play Music In Your Store, Bar or Restaurant?
So, pre-COVID, a guy walks into a bar and complements the owner on the music coming out of the bar’s sound system. The bar owner thanks him and asks him what he’s having. He replies, “I’ll have you stop playing that music and pay us damages for copyright infringement, or we’ll sue you for playing it without a proper license”.
It’s no joke.
Business owners have asked me: “If I can play iTunes, FM or satellite radio, or stream Spotify at home or in the car, I can play in my store, right?”
Wrong. But wait -- stores, bars, restaurants, and other commercial establishment (“Store(s)”) need ambience. It’s arguably more important than what’s being sold. People want to shop, eat, drink, hang out, and play in interesting, attractive spaces. They feel good, linger longer, and spend more money. Music playing in a Store is a huge element of ambience.
So, what’s a Store owner to do? With Stores (hopefully) opening back up soon, unless a Store fits into one of the exceptions below, that Store needs what are called “public performance licenses” (“Licenses”) to play music in it.
Without them, a Store owner can get a visitor like the one above, or a cease-and-desist letter from one of the PRS (performing rights societies -- ASCAP, BMI, SESAC and/or GMR – they have the rights to issue these Licenses, and Licenses should ideally be obtained from all of them, since different ones have the right to license different songs), advising the owner they’ve been infringing the copyrights in the musical compositions (songs) on the recordings they’ve been playing, and have to pay money damages or be sued. A court can award damages per infringed song that range from $750-$150,000, plus the song owner(s)’ attorneys’ fees.
It’s infringement because one of the copyright owner’s exclusive rights in their creative work, is the right to publicly perform it, and the Store didn’t Licenses from the PRS and pay royalties, to play music there. Stores get caught because each PRS has investigators who traverse the U.S., checking out Stores to make sure they’re following the U.S. Copyright Act rules about licensing music to play.
Many Stores don’t get Licenses. They instead subscribe to licensed music services, such as PlayNetwork or Cloud Cover Music (“Services”). These Services digitally provide recorded music curated to specific retail environments. This curation is claimed to be scientifically designed to make shoppers buy more, and people eat and drink more, by enhancing the establishment’s brand and engaging its shoppers and customers.
But, some Stores don’t want to pay for either Licenses or Services. They don’t think they need permission to play music. They instead play radio stations, someone’s music collection, or stream music from a streaming service into the Store, using one or more devices or more robust audio rigs.
There are some limited circumstances where a Store can without infringement, play music without Licenses or Services. But, the circumstances are very specific and limited. Here’s a summary of them that Stores can use as a guide to if and how they can play music without Licenses or Services:
Basically, employees can use a single consumer-type audio device, like a portable radio or mobile phone, to play broadcast or streamed music, or the employee’s music library, to entertain themselves.
The Store can’t charge an admission fee.
The music can’t be transmitted beyond the Store (tables on the sidewalk adjacent to a restaurant probably would qualify as part of the restaurant).
If the Store has less than 2,000 gross square feet (including bathrooms and kitchens, but excluding areas used exclusively for parking. (Restaurant patios, parking lots turned into a patio for COVID, or other outside areas with adjacent parking, would probably count towards the 2,000 square feet), and only plays FCC-licensed radio stations.
The Store can play only one audio device, of a type normally found in the home. This would be something like a traditional radio with built-in speakers, an Alexa-type smart speaker, or a phone or boom box with detached speakers.
In bars and restaurants, the square footage increases to 3,750 gross square feet, but the limit on the type of audio device and number of speakers is the same.
If more than 2,000 square feet, or 3,750 for bars and restaurants:
The one audio device can’t have more than six total speakers, no more than four of which can be in one room (or adjoining outdoor space).
No matter the size, a Store must either subscribe to a Service, or get Licenses, to:
Play FCC-licensed radio stations on more than one home-type audio device, a device which has more speakers than provided for above, or any other type of audio device or system.
Play downloaded music or old school CDs, even if an owner or employee owns them.
Play an iTunes library or streaming service, even if paid for. (This is because when one buys music or uses a free or paid streaming service, they’re only getting the right to play the music for their own, personal enjoyment),
Play live music.
Like any summary, this one doesn’t cover all the nuances. Store owners should consult with an experienced music/copyright lawyer before they play any type of music in their establishment.
Stores need to play it safe if they want music to contribute to setting the mood for their customers’ experience. Unless they qualify for one of the exceptions above, they either need Licenses or a Service. Nothing can kill a Store owner’s mood like getting sued.
(c) 2021 Paul I. Menes