Streaming Music In Public Spaces

By David S. Gold, Cole Schotz P.C.

Do you stream music in your office? Lobby? Waiting room? Store? Elevator? Restaurant or bar? Hotel? Bathroom? Gym?

The digital age has not only transformed the manner in which individuals listen to music, but also the ease by which businesses can stream music into their public spaces. Unfortunately, digital media players and music streaming services such as iTunes, Pandora and Spotify do not come with comprehensive manuals on how to comply with U.S. Copyright Law and, if they did, it is safe to say many would not read it.

Under U.S. Copyright Law, the copyright owner of a musical composition has the exclusive right to perform that composition in a public space, regardless of whether that “performance” is live or recorded. Any business that wishes to “perform” a work must first obtain permission from the owner and pay a royalty for the right to perform it. Failure to obtain permission will expose that business to potentially substantial liability for copyright infringement. Due to the obvious impracticality of song-by-song licensing arrangements, it has become commonplace for businesses to obtain “blanket” licenses from the major performing rights organizations (PRO’s) including ASCAP, BMI, and SESAC, organizations that administer and oversee the public performance rights of their member-artists. Unfortunately for licensees, each PRO has traditionally required exclusive affiliation from their member-artists, so a license from one PRO will only authorize public performance of works that are included in that PRO’s particular catalogue. PRO blanket license fees vary based on a number of factors including the size and type of the venue and whether live music is also performed. Indeed, ASCAP alone purports to offer over 100 different licenses and rate schedules depending on the needs of a particular business.

What about streaming music services? The answer depends on which streaming service and subscription you are talking about. Services like Pandora and Spotify offer commercial subscriptions that are fully licensed for standard business use. Fees for these commercial subscriptions are significantly higher than those for private use, and are generally limited to a single venue and, in certain cases, a single location or “zone” within that venue. The selection of music streamed through these businesses subscriptions is also limited to the catalogue licensed by the PRO(s) with which that particular service has partnered.

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