Restaurant Consulting

Music Licensing for Restaurants

By Daniel Kezner

Music plays a crucial role in enhancing the ambiance of a restaurant, influencing customer mood and dining experience. To play music legally, restaurant owners must navigate music licensing for restaurants, ensuring compliance with the legal requirements for music licensing. This involves securing proper music licenses from performing rights organizations such as ASCAP, BMI, and SESAC, which represent songwriters, composers, and music publishers.

Music licensing entails various licensing fees, determined by factors like the music service used, venue square footage, and whether the music is live or recorded. It’s a legal necessity, and an investment in improving customer experience while respecting the rights of music creators.

Basics of Music Licensing

Under the United States Copyright Act of 1976, the Public Performance Right is established, granting music creators the legal protection needed to control how their work is used publicly. This includes playing music in commercial spaces like full service restaurants, pop-up bars, and brewpubs. Restaurant owners must obtain a public performance license to play music legally, whether it’s through speakers or live performances.

To comply with copyright laws, restaurants need specific music licenses to play or stream both recorded and live music. These licenses are available through performing rights organizations (PROs) such as ASCAP, BMI, and SESAC, which collect licensing fees on behalf of songwriters, composers, and music publishers. The process ensures that creators receive fair payment for their work, allowing businesses to enhance their customer experience with a diverse range of music without legal repercussions.

The PROs: Understanding Your Main Licensing Options

Performance Rights Organizations (PROs) such as ASCAP, BMI, and SESAC play a pivotal role in the music licensing landscape. These organizations act on behalf of music creators, managing the rights to millions of musical works and ensuring that songwriters, composers, and music publishers receive compensation when their music is played publicly.

Paying PROs directly is a common method for obtaining the necessary music licenses for restaurants. However, this approach comes with its challenges. Each PRO represents a unique catalog of music, which means that a license from one does not cover all the music you might wish to play. This exclusive representation can limit your music selection, potentially leaving gaps in your playlist unless you secure licenses from all three major PROs.

Another significant consideration is the cost. Acquiring blanket licenses from ASCAP, BMI, and SESAC to cover all possible music played can be prohibitively expensive, especially for smaller venues. These licenses typically cover public performance rights for all the music in a PRO’s catalog, allowing you to play copyrighted music without the risk of copyright infringement. While comprehensive, the expense of these licenses should be weighed against their necessity for enhancing the customer experience in any type of restaurant – from bistros to gastropubs.

Alternatives to Direct PRO Payments

Licensed music solutions offer a streamlined approach to handling music licensing. These services take on the responsibility of managing PRO fees and ensuring that all music played in a restaurant is legally covered. This simplifies compliance and also provides a range of musical options that are already cleared for public performance.

Licensed Music Solutions

These services act as intermediaries between music venues and performing rights organizations, managing the legal aspects of music licensing for a fee. This setup allows restaurant owners to avoid direct negotiations with multiple PROs, ensuring a broad and legally sound music selection.

With licensed music solutions, restaurants can maintain peace of mind knowing that their music service is compliant with copyright laws. This option is particularly appealing to small business owners who may find the direct payment of licensing fees to PROs overwhelming and costly.

Benefits of Using Comprehensive Music Services

Diverse Music Libraries and Licensing Solutions: Services like Sonos, Pandora for Business, and Soundtrack Your Brand offer extensive music libraries along with licensing that covers playback in commercial settings. These platforms ensure that all music rights holders are compensated, allowing businesses to play a wide variety of music without legal concerns.

Customizable Music Zones: Advanced systems like Sonos enable precise control over the music atmosphere by adjusting settings down to individual speakers. This feature is vital for creating the right mood in different areas of a restaurant, enhancing the customer experience.

Adaptable Playlists: Maintaining a consistent playlist helps solidify a restaurant’s brand, yet it’s essential to keep the music fresh to prevent staff dissatisfaction. Comprehensive music services typically offer tools to easily update and rotate playlists, balancing the need for brand coherence with variety to keep both staff and customers engaged.

Exploring Music Licensing Options and Common Terms

Understanding Licensing Terms and Options

Blanket License: Many restaurants opt for a blanket license from organizations like Broadcast Music International (BMI), which covers all the music under BMI’s extensive catalog. This can be a straightforward solution, although costs can vary significantly.

Single License and Cover Song Licensing: For specific needs, such as hosting a live band or featuring a cover song, a single license might be necessary. This ensures that all performing rights organization requirements are met for each unique performance.

Jukebox Vendors and Streaming Platforms: Utilizing services from jukebox vendors or streaming platforms can be an effective way to manage music choices with a license agreement that covers all necessary rights.

Compliance and Strategic Licensing

Federal Copyright Law Compliance: Understanding and adhering to federal copyright law is crucial for all music users in public venues. This involves securing public performance licenses to legally play music and avoid potential copyright infringement.

European Stage Authors and Global Music Rights: For establishments playing international music, understanding rights like those managed by European Stage Authors can be critical. This ensures that all international music rights holders are properly compensated.

Cost-Effective Licensing and PROs

Affordable License Fee: Negotiating an affordable license fee with PROs or other music licensing services can make financial sense, particularly for small business owners. BMI license or ASCAP license can be tailored to the specific needs of a venue, considering factors such as square footage and public venue type.

Music Licensing for Small Businesses: It’s important for small venues to understand how demand letters and copyright laws apply to them. In many instances, a more customized approach to licensing can provide fair payment terms and copyright law compliance without overwhelming costs.

Legal Considerations and Common Misconceptions

Understanding the legal landscape of music licensing is crucial for every restaurant owner to avoid common pitfalls and the severe consequences of non-compliance. Here are key insights and misunderstandings that often catch restaurant operators off-guard:

Misconceptions About Music Licensing

Personal Accounts for Public Use: Many restaurants mistakenly believe that music from personal streaming accounts like Apple Music or Spotify is sufficient for background music. However, these services are licensed only for private, non-commercial use. For public venues, a commercial license is required, which covers public performance rights.

Free Online Music Equals Free Public Play: There is a persistent myth that if music is freely accessible online, it can be played freely in public settings. This is incorrect; all music played publicly must be licensed, irrespective of its source. Playing unlicensed music can expose a restaurant to legal action.

Consequences of Non-Compliance

Financial Penalties: Restaurants found without the proper music licenses may face hefty fines and legal actions initiated by performing rights organizations. These fines can escalate quickly, reaching thousands of dollars, which can be particularly burdensome for small business owners.

Reputational Damage: Compliance isn’t only about following the law; it’s also about maintaining a restaurant’s good standing within the community and the music industry. Ignoring music rights holders can lead to negative publicity and damage relationships with customers who prefer to support legally compliant businesses.

In both cases, the risks associated with non-compliance highlight the importance of adhering to copyright laws. Ensuring that all music played in a restaurant is properly licensed is not merely a legal obligation but a fundamental part of ethical business operations.

Cost Implications and Strategic Choices

Understanding the Costs of Music Licensing

When it comes to music licensing for restaurants, the associated costs can vary widely based on several factors. These include the type of music service used, the size of the venue measured in square footage, and whether the establishment plans to play live music or recorded tracks. Typically, licensing fees paid directly to performing rights organizations (PROs) like ASCAP, BMI, and SESAC can be significant, especially if a restaurant owner opts for blanket licenses to cover all music under these organizations.

Making Strategic Licensing Decisions

Navigating the financial aspects of music licensing for restaurants involves understanding the diverse costs and making informed decisions that align with your business needs. Whether you choose direct payments to performing rights organizations, opt for licensed music services, or a mix of both, each choice impacts your budget and the musical atmosphere you wish to create.

Deciding on the best approach to music licensing involves weighing the benefits and limitations of each option:

Direct PRO Payments: This option provides comprehensive access to a vast library of music but at a higher cost. It is suitable for larger venues or those with diverse musical needs that require extensive playlists.

Licensed Music Solutions: For many restaurants, using a licensed music solution like Sonos or Soundtrack Your Brand can be more cost-effective. These services negotiate with PROs to provide a broad music license at a more affordable license fee.

Combination of Services: Some venues might benefit from combining direct PRO licenses with third-party music services to enhance their music offerings while controlling costs.

Special Cases and FAQs

Exploring Unique Licensing Needs and Inquiries

Live Music Licensing

Separate Licenses Required: Hosting live music events in a restaurant involves additional licensing beyond recorded music. Each performance must be covered either through individual song licenses or a broader agreement that accommodates live performances.

Why It Matters: Ensuring that live performances are licensed protects the rights of the musicians and composers involved, and it also safeguards the venue against legal issues stemming from copyright infringement.

Common Licensing Questions

Radio and TV Music in Restaurants: Playing music from a radio or TV requires a public performance license, similar to other music formats. Simply using an existing radio or TV broadcast does not exempt a venue from needing the proper licenses.

Exemptions and Small Business Considerations: There are few exemptions to the requirement for music licensing, mostly related to business size or specific uses that qualify as non-commercial. Small venues might benefit from reduced rates or specific small business licenses offered by some PROs, which consider factors like square footage and the type of establishment.

Navigating Copyright Laws: Understanding the scope of copyright law is crucial for business owners to grasp their obligations and the potential legal consequences of non-compliance. It’s essential to be proactive in obtaining the necessary permissions to avoid disputes and ensure all music played is legally covered.

Play Music Without Playing Copyright Games

Implementing a Sonos system provides a streamlined, effective solution for managing music licensing in your restaurant, ensuring all music played is legally compliant. This approach simplifies the acquisition of necessary licenses while also improving the control over the musical ambiance through its advanced zoning capabilities.

We strongly encourage all restaurant owners to prioritize compliance with music licensing regulations. Doing so not only enhances the customer experience but also protects your business from legal risks associated with copyright infringement. By ensuring that your music setup is fully licensed, you contribute to a fair ecosystem for music creators while securing the integral ambiance that defines your restaurant’s character.

For any questions, concerns, or to develop an actionable plan tailored to your bar or restaurant, do not hesitate to reach out to Kezner Consulting Group. Our team is equipped to assist you in navigating the complexities of music licensing, ensuring your business operates both legally and successfully.

Frequently Asked Questions About Restaurant Music Licensing

How can I obtain an affordable license fee for playing music in my restaurant?

While the concept of an affordable license fee often depends on various factors like venue size and music usage, negotiating directly with performing rights organizations or exploring bundled services from a streaming service can help reduce costs. Be aware that promotions for reduced fees may have ended, so it’s essential to review current offers.

What do I need to know about performing copyrighted music in my restaurant?

To perform copyrighted music, you must obtain licenses from the appropriate performing rights organization like ASCAP or BMI. This ensures that ASCAP songwriters, composers, and publishers sign agreements that allow you to use their music legally, protecting you from infringement claims.

What permissions are needed for musicians to play live in my restaurant?

When musicians play live, it involves not just performance but also the rights to the songs played. You’ll need to ensure that music played, especially if it includes cover songs or compositions co-written by different songwriters, is covered under your music license. This might involve additional agreements if the music is not in the public domain.

What are the implications of using a streaming service for background music in my restaurant?

Using a streaming service requires a commercial license that covers public performance rights. Services tailored for businesses typically handle these licenses, ensuring that music played complies with copyright laws. Ensure that the service has agreements with all necessary music rights holders.

How much does a music license cost for a small restaurant?

The cost can vary widely, sometimes reaching up to thousand dollars annually, depending on several factors such as the square footage of your venue, the type of music, and whether there is a cover charge at your establishment. Each factor can influence the license fee.

Can I play any song if it’s in the public domain?

Yes, songs in the public domain do not require a license to be played as they are no longer protected by copyright law. However, it’s essential to confirm the status of each song, as arrangements or new versions might be co-written by ASCAP songwriters or others who hold copyright.

What should I do if I only need to use a few songs for a special event?

If you need to use a few specific songs, say four songs for an event, it may be more cost-effective to obtain a single license for those tracks rather than a full blanket license. Contact the relevant performing rights organization for full details on how to obtain permission for these specific uses.

Meet The Author

Daniel Kezner

CEO / Owner
From training staff to designing kitchens to refining brands, we’ve done it all during our 25+ years in the industry. And we can help you get it done too. We’ve developed the strategies to make it work....and that’s what makes us the consultants who can help you get where you want to be.
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