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Transforming The Customer Experience

The Reality of Music Copyright Law

Posted Jan 3, 2017 6:15:00 PM

When your customers walk into your retail business, what do they hear? Depending on your brand and your knowledge of your customer base, your background music may be soft and classical, raw, loud and heavy or nostalgic. Regardless of the type of music you choose (or its noise level), music has long been a marketing staple in a variety of establishments.

Whether you play background music to set the pace for your shoppers or to create a one-of-a-kind shopping atmosphere, it’s vital to ensure the music you play is legal. Obtaining your music from the right in-store music provider can save you thousands of dollars in fines.

music licensing

Commercial-Use Music Must Be Licensed

All music played in a business is protected by copyright law, which means a musical artist’s work isn’t played without legal permission. When a business owner is caught infringing on that copyright, the law lets the owner recover damages ranging from $750 to $30,000 per violation and up to $150,000 if a court finds infringement was willful. The copyright law affects these typical commercial uses.

  • Music on hold: The use of all on-hold music (yes – including live radio programming) must be licensed.
  • Recorded music: Playing recorded music also requires a license unless your shop specializes in audio equipment sales. Even then, copyrighted music can only be played for equipment demonstration purposes.
  • Streaming services: Licenses are also needed to play music via a cable or satellite music-streaming service.

Legitimate music service companies such as Retail Radio take all the legwork and legal paperwork out of your hands. These companies secure the necessary legal rights to music while covering your liabilities by providing a guarantee. Retail Radio also offers access to large catalogs of customized, rights-secured music you can legally use in your store.

Recent Violations and Consequences

No matter how large or small your business is, the law is the law. Even some of the largest, most recognizable people, organizations and companies have paid the price for not complying with copyright laws. Here are a few notable examples.

Bars and Restaurants

Several bars and restaurants around the country have been caught willfully ignoring or neglecting to properly research and follow music licensing regulations.

Since early 2016, three businesses in the Baton-Rouge area have been hit with lawsuits filed by Broadcast Music Inc., for playing copyrighted music without paying the applicable licensing fees. The businesses include the Moonlight Inn in French Settlement, Laguna Beach Daiquiris in Denham Springs and Quarters in Baton Rouge.

The case against Moonlight Inn was dismissed due to flooding, which closed the business indefinitely. The cases against Laguna Beach Daiquiris and Quarters, however, are still open as of September, 2016. BMI said it made multiple attempts to reach all the business owners prior to filing the lawsuit. Depending on which music is being played, how often and size of the business, a BMI license can cost as little as $350 per year.

In October 2016, BMI filed a lawsuit against the 501 Bar & Grill, Lincoln, Nebraska, for playing licensed songs on the jukebox without having paid for the right to do so. Per the lawsuit, BMI claims it contacted the owner of the restaurant 85 times since 2014 – initially to educate him on copyright laws and later to demand he stop playing company-licensed music.

On the night of September 15, 2016, a representative of BMI heard several examples of unlicensed music in the bar. According to BMI, the annual cost of a license for a bar this size (about 250 patrons) averages about $2,000 annually. The owner is now potentially facing hundreds of thousands in fines.

A Major Television Channel

Claiming “fair use” as the reason to bring a suit against music licensing giant Broadcast Music, Inc., ESPN asked a New York federal court in May 2016 to determine a more reasonable license fee for playing copyrighted music on the company’s several cable sports networks. ESPN claims it should not have to pay direct and blanket license fees that could amount to about $15 million annually – especially for music loudly played in arenas and stadiums that is picked up by broadcaster’s microphones.

On the other hand, BMI demands full value for its catalog of about 10.5 million songs, claiming that a 2006 agreement with ESPN allowed blanket payments to decrease as ESPN made licensing deals with music publishers. BMI also claims that ESPN did not honor the agreement by reporting each incidence of direct deals.

BMI also insists that direct deals – even those covering every instance of background music in its broadcasts, does not cover the complete "incidental and ambient uses" fee. BMI wants “full value” for its entire catalog due to the belief that ESPN has "greatly increased" its use of background music, particularly due to its use on mobile devices and its website.

Yes – a High School

Music licensing firm Tresona of Arizona, sued Burbank High School Vocal Music Association in May 2016, for copyright infringements dating back to 2010. The suit, filed in U.S. District Court in Arizona, accuses the organization of arranging 89 songs licensed exclusively through Tresona, and another 10 songs for which the company issues non-exclusive licenses.

The director of the famed show choir, said to be the inspiration for the television show, “Glee,” claims it’s “legal for a show choir to perform a custom-arranged composition after obtaining a mechanical license for copyrighted material.” Tresona seeks damages of $150,000 for each infringement, punitive and compensatory damages and an injunction against the organization.

Even Politicians Aren’t Exempt

In early December 2016, former Republican presidential candidate U.S. Sen. Ted Cruz agreed to pay $55,000 to music-licensing firm Audiosocket for alleged copyright infringement and breaching a licensing agreement. In May, 2016, suit was filed in U.S. District Court in Seattle, against the Ted Cruz campaign and his hired advertising agency. Two songs featured in campaign commercials were allegedly aired multiple times before the licensing contract was signed.

No matter the size of your business, you can purchase one or more rights-secured packages customized for your brand by Retail Radio. We specialize in ensuring you get fully-secured rights to the music designed for your business.