The short answer is that royalties are required whenever music is played in public. There are a couple of limited exemptions you can find here. Consult with your lawyer for your unique business case.
In this post we’re specifically discussing a business’s use of music for ambient enjoyment by their customers and employees (background music or telephone on-hold.) Other business uses of music are separate topics.
Music is copyrighted material. When you buy a CD or MP3 for your personal collection, you obtain from the copyright owners the right to use the songs for your personal enjoyment. Not included is the right to play the songs for the public. In that case, additional royalties must be paid to the copyright owners in order to comply with U.S. Copyright Law. One such royalty stems from what is called the “performance right.”
Our Take: A Business Simply Doing the Right Thing – Legal Consideration
There’s a concept in business law called consideration. In simple terms it’s what is actually exchanged in a transaction. For example, a Hot Dog stand might provide the consideration to you of a delicious hot dog, and you provide the consideration to the stand of $2.00. There is an exchange of value.
Here is the consideration in the case of a business using songs: 1. The business derives value from the songs by improving their environment for their customers and employees. 2. The copyright owner collects a royalty.
Because there are so many businesses and so many songs, collection agencies have been set up as clearing houses. Examples in the U.S. are ASCAP and BMI.
Other Benefits to the Business If They Use a Music Provider Who Handles Music Royalties As An Alternative to Paying ASCAP and BMI Directly
In the case of UMix:
– We create professionally curated playlists and enable customers to build their own using our song library.
– We provide the software and hardware needed to play and control music across all locations.
– We pay the performance royalties. Our lower rates are passed on to our customers. So for only $228 a year per location you get it all!