Turn It On, Turn It Up, Get Sued: Playing Music in Your Place of Business

Do you want to create a unique atmosphere for your business, or even just provide some background music for your customers while they browse? Maybe you, or one of your employees, went out and bought some CDs, or legally downloaded some songs from iTunes onto an MP3 player, and now you want to play that music in your store. Pressing play could make you an infringer.

Many people believe that if they purchase a CD or download an MP3, that they can play that music anywhere – after all, they have paid for that copy and own it. The assumption is that there can be no copyright infringement if there is no illegal copying. The Copyright Act, however, grants a number of rights to copyright owners beyond the mere right to reproduce the copyrighted material.

One of the rights granted to owners of copyrights in musical recordings is the right of “public performance.” A public performance occurs when the music is played “at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” This definition includes any place of business open to the public. As such, popping the iPod into the player and turning it up for all of your customers to hear would most likely be infringement.

Brian Downey
Brian Downey

Of course, for every rule, there are exceptions. The exceptions in the Copyright Act relating to the public performance of musical recordings, however, do not offer much flexibility with respect to your music selection in your place of business (unless you happen to be a record store). For purposes of playing music, you are permitted to turn on, and turn up, a single radio that is receiving a transmission broadcast from a radio station (i.e. internet radio does not meet the exception).

If your place of business is larger than 2,000 square feet, or 3,750 square feet if you operate a restaurant or drinking establishment, you may have up to six speakers playing the music from the radio. However, no more than four speakers may be in any one room. For businesses under those square foot parameters, there are no restrictions on the number of speakers, but, realistically, how many speakers would you need in a 1,500 square foot store? If you charge customers for listening to the music, or if you retransmit the music, you fall out of the exceptions and back into infringement.

Every year, court dockets are full of copyright infringement cases brought against small business owners who failed to get a proper license for music played within their establishment. Businesses that offer live musical entertainment such as cover bands or karaoke are a favorite target in these types of cases. Yes, the right of public performance covers not only the playing of recorded music, but the copyright in the underlying musical composition and lyrics to a song.

Typically, one of the performing rights organizations, or PROs, that control the licensing of music, such as ASCAP or BMI, will discover the violation and then contact the business owner, requiring them to pay for an ongoing license. The licenses can be pricey for a small business, but the failure to pay could land that business owner in court. Statutory damages for copyright infringement can range from $750 to $30,000 per work infringed (i.e. for each song played). Of course the PRO would likely have an uphill battle in identifying each and every song ever played. That said, even the ability to identify a few songs, either from an investigator’s visit or from obtaining a cover band’s set list, could result in the payment of a very hefty sum as well as litigation costs. For this reason, few of these cases are ever litigated to a judgment, with most settling after the payment of a license fee and some damages.

Business owners who feel the need to play music in their establishments have a number of options:

1. Simply proceed with playing the music in the hopes that the PROs never get around to your establishment (not recommended).

2. Take advantage of the exceptions and play a local radio station (heeding the speaker and space limitations of the exception).

3. Sign up for one of the many business music services that take care of all licensing for the music they play (e.g. Sirius Business, Pandora Business, etc.) – note that this option would not work for live entertainment or situations where dancing/cover charges to listen to the music are involved.

4. Contact the PROs and obtain a proper license (really the only option for businesses that want to provide live music entertainment where cover songs are played). No single PRO controls the rights to every song. As such, multiple PRO licenses are often needed unless you can narrow your “playlist” down to just the catalog of music of one PRO.

Copyright law grants a whole basket of rights to copyright owners. The right to prohibit others from copying the work is simply one of those rights. The other rights are often counter-intuitive to many people. After all, if you paid for your favorite songs and legally downloaded them from iTunes, shouldn’t you be able to play those in your place of business for all to hear? The answers are often complex, with many exceptions and arcane rules, such as rules based on store size, speaker configurations and whether dancing is featured. At the end of the day, it is better to be safe than sorry before hitting the play button in your business.