Business Owners: Are You Streaming Music?

The digital age has not only transformed the manner in which individuals listen to music, but also the ease by which businesses can stream music into their public spaces. However, the convenience of digital media players and music streaming providers such as Apple Music, Pandora and Spotify has also made it far easier to run afoul of the law as it relates to the public performance of recorded music.

Under U.S. Copyright Law, the copyright owner of a musical composition has the exclusive right to perform that composition in a public space, regardless of whether that “performance” is live or recorded. Any business that wishes to “perform” a work must first obtain permission from the owner and pay a royalty for the right to perform it. So how does a business owner go about obtaining permission?

In order to avoid potentially costly penalties associated with copyright infringement, businesses have the option to obtain “blanket” licenses from one or more of the major performing rights organizations (PRO’s) such as ASCAP, BMI and SESAC, organizations that administer and oversee the public performance rights of their member-artists. Each PRO typically requires exclusive affiliation from their member-artists, so a license from one PRO will only authorize music from artists included in that PRO’s catalogue. PRO blanket license fees vary based on a number of factors including the size and type of venue and whether live music is also performed.

The introduction of streaming music services has further simplified the licensing process for digital music performed through those platforms. Services like Pandora and Soundtrack Your Brand offer commercial subscriptions that are fully licensed for standard business use.

Apple Music, which does not yet offer a commercial subscription, appears poised to offer a similar product in the near future. Fees for these commercial subscriptions are generally higher than those for private use, but still less expensive than licensing from the PRO’s directly. Commercial subscriptions do come with some limitations, such as being restricted to a single venue and, in certain cases, a single location or “zone” within that venue. The selection of music streamed through these business subscriptions is also limited to the catalogue licensed by the PRO(s) with which that particular service has partnered. That said, many of the major streaming music providers have partnered with multiple PRO’s, resulting in a far more comprehensive catalogue of available music than can be obtained through a single PRO license.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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