Music is a powerful tool for enhancing customer experience. Whether it’s a relaxing playlist in a spa, upbeat tracks in a gym, or ambient tunes in a retail store, businesses across industries use music to shape atmosphere and influence behavior. But many business owners don’t realize that playing music in physical, public-facing spaces without proper music licenses can expose them to serious legal and financial risks.
The legal landscape of public music use
Under US copyright law, any public performance of music requires a license. This includes music played in restaurants, bars, gyms, medical offices, retail stores, hotels, and even corporate lobbies. Simply using a personal subscription to Spotify or Apple Music does not grant the right to play music in a commercial setting. Even legally purchased CDs or MP3s require licensing if used publicly.
This is where performance rights organizations (PROs) come in. PROs, such as ASCAP, BMI, SESAC, and GMR, represent songwriters, composers, and publishers. They collect royalties on behalf of these rights holders whenever their music is performed publicly. These organizations actively monitor businesses and pursue legal action against those who fail to comply.
What happens if you don’t license?
The consequences of ignoring music licensing law are steep. Statutory damages for copyright infringement can reach up to $150,000 per violation. PROs routinely audit businesses, send legal demand letters, and file lawsuits. One notable example involved BMI suing an Ohio bar for unauthorized performances of ten songs, seeking damages of up to $1.5 million.
Many business owners mistakenly believe they’re covered by their music streaming service or that their use is too minor to matter. But the law is clear: if music is played in a public or commercial space, a license is required.
Licensing options for businesses
Fortunately, there are several ways for businesses to stay compliant:
- Direct PRO licenses: Businesses can obtain licenses directly from ASCAP, BMI, SESAC, and GMR. This is essential for venues hosting live performances or playing recorded music.
- Licensed music services: Commercial music licensing providers offer curated, fully licensed music as an alternative to traditional licensing arrangements. While these services may streamline certain aspects of the licensing process, the agreements should still be reviewed by counsel to ensure proper coverage for your specific use case and business needs.
- Special use cases: Additional licenses may be needed for live bands, DJs, karaoke, or jukeboxes. Each use case should be evaluated individually to ensure full compliance.
Why legal guidance matters
Navigating music rights for commercial spaces can be complex, especially for businesses with multiple locations or varied music use. Legal counsel can help assess licensing needs, procure the correct licenses, and provide ongoing compliance support. Proactive legal protection is far more cost-effective than reacting to a lawsuit or demand letter.
Our Entertainment & Media team at Nixon Peabody helps businesses navigate the complexities of music licensing law with practical, business-focused solutions. Whether assessing current music use, identifying the right PRO licenses, or managing ongoing compliance, we work closely with clients to help ensure they’re protected.