Mike Drumm

How to Legally Play Music in Your Restaurant

So…you own a restaurant (or any business open to the public) and want to play music at your location. Maybe it’s live concerts with local bands. Maybe you just want the ambiance of having something on in the background day to day. To liberally paraphrase Lesley Gore’s 1963 hit, “It’s my restaurant and I’ll jam if I want to!” Unfortunately, this is not a “just press play” situation, so before you start up It’s My Party for your customers, you may want to read on.

Sure, you can listen to whatever tickles your fancy at 8am alone in the restaurant, but if you are going to be playing music in the presence of patrons, it’s time to add another license to your file.

Licenses

Music is governed under Federal Copyright law. The Copyright Act grants five rights to a copyright owner:

1. the right to reproduce the copyrighted work;
2. the right to prepare derivative works based upon the work;
3. the right to distribute copies of the work to the public;
4. the right to perform the copyrighted work publicly; and
5. the right to display the copyrighted work publicly

For purposes of this blog, we are focusing on number 4: the “performance” aspect, or, in this case, the performing of copyrighted music at your restaurant. Now before you get up on a table with that microphone…

What is a performance?

According to the US Copyright Act, “to “perform” a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.”

I’m sorry, what now?

In layman’s terms: a performance is playing music in a public setting (i.e. the restaurant).

This means there are two common types of performances you’ll need to consider here: playing pre-recorded music and hosting live music.

Let’s start with playing pre-recorded music. That means Spotify, Pandora, Apple Music, YouTube, your iTunes library on shuffle, vinyl records, CDs, 8-tracks, cassettes, a collage of cell phone videos from that summer you followed Widespread Panic on tour.

Did you say no streaming?

Yep. You probably have your own Spotify or Apple Music account and can Bluetooth or plug into your restaurant’s speaker system, right?

Not so fast.

Well what about playing vinyl records or CDs that I own? I paid for them. Why can’t I play them? They are mine.

Negative Ghost rider, the pattern is full.

While you may own the physical media or pay for the music service, the rights that come with this payment are non-commercial. You can rock out in your car or with your air pods but when you start playing this music for the public, you are now entering the realm of “performance” (air guitar optional).

Streaming services like Spotify, Apple music, Google Play, and Pandora are designed for consumer use and are not fully licensed for commercial purposes. Same goes for that $10 CD you bought. They are for personal use only and do not include a “performance” license, therefore playing them in a commercial setting violates copyright law.

Does that mean we all have to eat and drink in silence?

Not at all. If you want to play music in your restaurant, you have three options.

Option 1: obtain a commercial license from one - or multiple - Performing Rights Organizations (PROs) and play music that you legally own (CDs, vinyl records, digital downloads, etc.)

Okay… what is a PRO?

Great question. Musicians, composers, and songwriters create music and own the intellectual property thereof. PROs exist to protect all that IP and ensure that the artists get paid for its use. Musicians can only sign up with one PRO - the three main ones are American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and SESAC. These PROs protect the rights of the artists by selling and enforcing licensing of music in establishments like your restaurant.

You may have already received a nice letter threatening death and destruction from one or more PRO(s) for not having their yearly license. Something like this:

 

Dear Restaurant Owner,

My name is PERSON and I’m your BMI territory representative.

Every effort has been made to resolve your BMI license amicably, but without success. Because we’ve been contacting you in an attempt to reach a timely and amicable resolve for the music license at your business, RESTAURANT NAME is currently being considered for Copyright Infringement action. It is important that you understand BMI exists to help businesses and other organizations that use music to comply with US Copyright Law in an easy and cost-effective way.

It is very important that I hear from you today.

The cost of using music without permission can be very high. Each musical composition used without authorization entitles the copyright owners to damages between $750 and $30,000, plus attorney's fees and costs. The amount awarded is at the discretion of the judge, who can grant an award as high as $150,000 per infringement, if the court determines the infringement to have been willful.

Please contact me at your earliest convenience to secure the required copyright permission licensing for your business.

Thank you for your prompt attention,

PERSON

 

If you decide to go with this option, you will either have to obtain licenses from all three PROs or only play music from the catalogue of the PRO with whom you hold a license. Licensing fees are based on the occupancy of your restaurant and can add up in a hurry.

 

This leads us to the more popular (and cost-effective)

Option 2: sign up for a commercial streaming service that includes the commercial licenses. Think of it as a fancier Spotify. These services run between $25 and $27 a month and include full commercial licensing on a full catalogue of songs, making this option indubitably cheaper than licensing from the PROs.   Pandora Business and Sirius XM Business are two popular options.

Don’t like the sound of those numbers? There is one final possibility.

 

Option 3:  play the good ol’ fashioned radio… so long as you meet certain requirements.

If you want to play your favorite local radio station, you must have the “right” size building and the “right” number of speakers. Under the US Copyright Act, a restaurant is eligible for the exemption if it either (1) has less than 3,750 gross square feet of space (in measuring the space, the amount of space used for customer parking only is always excludable); or (2) has 3,750 gross square feet of space or more and (2) uses no more than 6 loudspeakers of which not more than 4 loudspeakers are located in any 1 room or adjoining outdoor space.

When considering these options, it may be worthwhile to also look at your event schedule.

What if I have live bands? 

As a host of live music, you (the venue) are responsible for the licensing fees of the songs played in your establishment. A Pandora Business or Sirius XM account does not cover (and there is, unfortunately, no equivalent for) live music. You will have to go with a PRO option.

“But hold on,” you say, “I’m not hiring famous bands for my restaurant. I only work with local artists.  Surely, I don’t need a license for that.”

Well, we hate to disappoint, but even local bands sign up with PROs (and don’t call me Shirley). The above-listed organizations have no scope requirements when it comes to membership (although SESAC is invitation-only) and even small-time performers wishing to protect their music can apply. The second issue here is that your local band may perform cover songs. PROs cover the songwriter, not the performer, so if you have a completely original set that finishes with Freebird, you’re still looking at a copyright violation.

Therefore, if you want to have live music and do not want to pay for PRO licensing, you’ll have to:

(1.) Have the band grant you a public performance license for its songs;  and

(2.) Have the band agree to only play their music (no covers).  Remember that you (the venue) are ultimately responsible for complying with copyright law and proper licensing so it’s important that they (the band) understand that you are on the hook if they decide to play Freebird after all.

Three PRO licenses for one show? Can I just get one?

Sure. If you don’t want to give up on covers entirely, but don’t want to pony up for all three licenses either, you can settle on just one. You’ll just have to work with the band to select only cover songs licensed by that PRO. Ultimately, the decision of which PRO or PROs to buy licenses from may factor into how frequently you host live music and vice versa.

We have a Live Music Agreement template available to restaurants at no charge.  All you have to do is ask.  Our template lets you choose which PRO license you have, if any, and provides links to each PRO database so bands can pre-screen cover songs:

Our agreement also includes a limited public performance license grant for the band’s original material.

I haven’t done any of this and it’s been fine so far. What if I keep doing what I’m doing?

 Harassment from the PROs. Bad karma. Oh… and fines exist. Remember the BMI letter above? “Between $750 and $30,000.”  Is Freebird really worth $30k?

Questions? Feel free to contact us. We’re happy to discuss your options in more detail and help you figure out the best way for your business to be in compliance.

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by Mike Drumm