Legally, you could obtain licenses from the copyright owner of each song you play. Practically speaking, you have two choices for paying your licensing fees.
Most operators now conclude that the devastating downside of being caught using music illegally is simply not worth the risk. Today, there’s absolutely no reason for a restaurant to pay more than $20 per month for a business music service, and there’s no need to sign a term contract. Ten years ago, when Muzak dominated the market, music cost as much as $100 per month, with five-year contracts, forcing many operators to “take their chances” playing music illegally.
Don’t believe it? Google “ASCAP lawsuit” or “BMI sues”. Frequently these lawsuits result in bankruptcy and closure of the restaurant. Federal law entitles them to damages as high as $150,000 per song played illegally. These organizations know they catch only a small portion of “bootleggers”, so they need to make examples of the ones they catch. A minority get sued by the “music police”: the “performing rights organizations” that collect licensing fees on behalf of the copyright owners. Tens of thousands of restaurants play music illegally. Can you get away with not paying? Sure, at least for a while. If you want decent music for your restaurant, it’s not free. Few restaurateurs would consider broadcast radio, replete with rude DJ banter and obnoxious car dealer ads, to be conducive to a positive dining experience. Not CDs, your iPod, satellite radio or streaming music services like Pandora. While many smaller restaurants meet the “physical” requirements of the exemption, in terms of the square footage of the premises and the number of speakers playing the music, the exemption covers only broadcast radio (and TV). There is, in fact, a limited exemption provided by Section 110(5) of the Copyright Act, but in real life it’s rarely helpful. Some restaurateurs have a vague notion of a “small restaurant exemption,” and assume that this frees them of the burden of paying licensing fees. When you play it in your restaurant, it changes everything. That only gives you the right to use the music for personal use. It doesn’t matter if you have paid for the underlying source of the music, whether by buying CDs or paying for a subscription service such as Pandora. When you play background music in your restaurant, it’s considered a public performance of that music, and in general you are legally required to pay licensing fees for the privilege. Given that music is a nearly universal restaurant need, this article addresses the things an operator should know about the use of background music from a legal perspective.įederal copyright law, which governs use of music in a restaurant, is one of the most arcane, complicated and misunderstood areas of the law. Successful restaurateurs would agree almost unanimously that background music is an essential part of the dining experience.
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