Playing Background Music At Your Business? You Might Be Breaking The Law.

Music is the universal language.  Regardless of race, religion or nationality, music moves us, inspires us and can even influence our behaviors. If you own a business and play music, you stand to benefit from an array of positive results ranging from increased sales, more satisfied customers, even happier employees.

The experience of entering a place of business and hearing music is so normal and expected, little thought is given on the part of small business owners with regard to the method in which they are playing music. However, statistically speaking, the majority of U.S Small Business Owners are breaking copyright laws, every single day.

A 2018 Nielsen Music study commissioned by Soundtrackyourbrand.com estimated that 83% of businesses throughout the U.S., UK and Europe, with 10 or fewer employees break copyright law everyday by streaming music into their places of business via their personal devices.  More interesting is that 71% of U.S. Small Business owners are not even aware that playing music from their personal device is illegal (Read, Why Your Business May Be Breaching Copyright Law By Streaming Personal Playlists by Forbes, October 2018)

So, what is the big deal?

Copyright law doesn’t just protect the rights to copy or sell music. It also protects the rights to publicly display, broadcast or perform music. Therefore, playing the latest Taylor Swift music publicly in your store or retail location or office space is technically just as illegal as generating bootleg CDs of Taylor Swift’s music and trying to sell those CDs.

Violating a copyright is a big deal. Civil penalties can include statutory damages of up to $75,000 per infringing use (i.e. per song per number of times played) and attorneys fees.

There are three major Performing Rights Organizations (PRO’s) who represent the artists behind most of the music out there: BMI, ASCAP and SESAC. If you want to play music from a performer that one of these organizations represent, you must obtain a license.  There are different types of licenses required for playing copyrighted music and the manner/venue in which the music is being heard determines what type of licensing is required.  For example, as a consumer, if you subscribe to Spotify, Pandora or Apple Music, the license to use such services REQUIRE that the music is played for personal use only. So, the fee for these services will run you around $10 dollars a month. Whereas if the music is going to be broadcast in a public place, the license needs to be specific for a public performance.  These licenses can vary depending on your type of business and how many patrons visit. 

Artists, song writers and publishers are paid based on licensing agreements that utilize their music.  When personal use licenses are used for playing music in public places, the result is the artists that created the composition are not compensated fairly for their work. This “unfairness” translates into some serious cash. The same Nielsen study mentioned earlier suggests that in the US alone, artists and musicians miss out on over $888 million dollars’ worth of payments solely from small businesses streaming music from personal devices, every year.

Think of streaming music from a personal device to play in a public space as the equivalent of sharing your Netflix password with everyone on your street.  Netflix does not intend to stream content to your entire block for only $12.99 a month. By the same token, musicians are not adequately compensated when they are only paid for a personal license. Especially when their music is shared with thousands of other people in a months’ time. Because music can feel timeless, we as human beings develop an emotional bond to much of it. This bond, coupled with availability makes it is easy for us to forget that music is property protected by US Copyright law; and such property has owners.

If the guilt of stealing a paycheck from their favorite artist does not deter a business owner from playing music without the correct license, perhaps the fines associated with doing so will.  These fines could cost a business $750-$30,000 per violation (i.e. per song played publicly without the proper license).

The psychology behind the “right” playlist.

Going about playing music in the public space legally may cost a bit more initially, but the effort will end up paying for itself.  Aside from avoiding fines and other legal issues, business owners who utilize companies that specialize in background music for businesses find themselves benefiting in ways they never could have by simply playing music from their personal playlists.  Soundtrackyourbrand.com, Apple Music for Business, and Umix help their clients develop the perfect playlist for their exact business models. The results include a more concise branding for the business and an environment where customers are not only more likely to stay longer but spend more as well. Case in point, the custom soundtrack Soundtrackforyourbrand.com created for McDonald’s is credited for a 15% increase in milkshake and smoothie sales (Read, The Soundtrack of McDonalds).

The monthly subscription fees charged by these companies average about $35 a month for small businesses and include access to thousands of song titles. The fee also covers all of the licensing issues, freeing business owners up to worry more about their businesses and less about copyright infringement claims demanding tens-of-thousands of dollars or more.

Copyright law can be tricky, which is why small business owners need to fully understand the issues at hand when it comes to playing music in their establishments. 

Maybe you are a business and you are unsure if you are infringing on a copyright or utilizing the wrong license for streaming music publicly? Maybe you are an artist who is not being appropriately compensated for your work? Whatever the Intellectual Property issue, we have attorneys available to help. Contact us today and let us guide you through the process.

Law 4 Small Business, P.C. (L4SB). A little law now can save a lot later. A Slingshot company.