You open up shop. Turn on the lights. Start getting ready for customers, and flip on some music.
Pandora, an iPod playlist, Spotify, or maybe sounds from the television cut through the silence and fill the room with music.
And just like that -- you may have put your business in a position to be sued for thousands and thousands of dollars.
Is Playing Music In a Business Illegal?
If you think it’s unbelievable that playing overhead music in your business can be illegal, you aren’t alone.
Many business owners, especially small business owners, don’t realize you can be sued for playing copyright music. Or, that companies like Broadcast Music Inc., or BMI, are actively suing businesses for playing copyright-protected songs in their establishments.
A story from the Tampa Bay Times reported that 25 bay area restaurants, bars, and nightclubs have been sued and reached settlements with BMI in the last five years, and the settlements weren’t cheap.
Eleven of the reported settlements ranged from $10,200 to $62,5100.
BMI is teaching a hard lesson to businesses.
“You can’t play music publicly without one [a music license]. Copyright laws require music users to get permission from songwriters and composers who can charge a fee before their music is played publicly, which then allows them to continue to create music,” explains the BMI website.
In other words, you may be breaking music licensing laws if you broadcast music in your business by:
- Playing songs from a personal device such as an iPod
- Playing music from purchased audio files such as CDs or MP3s
- Playing songs from a streaming service such as Pandora or Spotify
- Featuring live music by performers who play covers
- Broadcasting the sound from televised programming
If you are doing any of these actions in your establishment without the proper licensing, you could be sued for playing copyright music. You need to review music licensing rules and make sure you aren’t breaking them.
Or, you could end up like Tampa-bay area bar and restaurant Tadpole.
What’s the Worst That Can Happen?
Tadpole didn’t think they were doing anything wrong when they hired a band to play covers like Margaritaville by Jimmy Buffett and Dirt Road Anthem by Brantley Gilbert.
But ignorance is not protection against the law.
While the band was playing the popular covers, a BMI “music researcher” was there taking notes. Tadpole had not paid licensing fees for the songs, and this BMI representative was there to collect evidence.
Tadpole wasn’t aware that they were breaking any laws, until they were sued for playing copyright music. The BMI lawsuit landed Tadpole in federal court and left them with a settlement that required them to pay $30,000.
According to the story by the Tampa Bay Times, Tadpole’s owner had received general notifications about music-licensing and later, correspondence directly from BMI demanding fees -- but he didn’t take them seriously.
Even after a BMI representative showed up at the establishment, the owner was still unsure about what was happening or why he owed the money. He was very unfamiliar with music-licensing laws.
"I had some lady walk in and say I owed her $3,000 for a music license," the owner said to the Tampa Bay Times. "I don't know where that check or money is going."
But not knowing about music-licensing couldn’t save Tadpole from the lawsuit or the repercussions that came after. Tadpole eventually closed after the settlement.
Educate Yourself to Protect Your Business
BMI wasn’t created to go after small businesses. The company was founded in 1939 by radio broadcasters and songwriters who wanted to simplify the process of collecting royalties for musicians and producers.
Before BMI, royalties for music licensing had to be paid on a case-by-case business, which was tedious, complicated, and expensive. BMI centralized the process by pulling together songs that could all be covered by the same license.
The New-York based company, which is one of the three leading companies in the industry, collects royalties from music users which they distribute to their creators. Most of their revenue is distributed back to their songwriters, producers, and creators.
BMI says their mission isn’t to fight establishments through legal action. It’s to support their artists and educate businesses about the rules.
“We're legally obligated to represent our songwriters and publishers," said BMI vice president Dan Spears to the Tampa Bay Times. "Our goal first and foremost is to educate."
Education is the key to protecting businesses that aren’t familiar with music-licensing laws.
What You Need to Know as a Business Owner
All “public performances,” which is playing music in a public place, requires licensing.
To get that licensing, you can:
- Obtain a blanket license through BMI or its competitors ASCAP and SESAC. The cost will of the license depends on the occupancy of the establishment and can cover both live and recorded music.
- Work with a full-service music provider who can manage licensing for you. When you hire a professional music provider like Spectrio, you’ll be completely covered as part of your service agreement. We obtain all necessary synchronization and public performance rights so you don’t need to worry about extra costs or hiring a copyright lawyer just so you can play music in your establishment.
But whatever you do -- don’t do nothing.
Ignoring music-licensing laws and claiming ignorance will not protect you from potential lawsuits from companies like BMI.
For additional reading on the topic, check out our other blog posts:
- Can I Play Music Purchased Online as Overhead Music?
- Am I Allowed to Stream Pandora or Spotify in My Store?
- How Can I Avoid Fines When Playing Music at My Business?
Or if you are ready to do an audit on the music situation at your establishment and make sure you are acting within the law, contact us.
Spectrio will provide a free consultation to educate you on music-licensing so you don’t get sued for playing copyright music.
Secure your business and contact us today to schedule your free music-licensing consultation.