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5 Licensing Questions on Playing Music for Your Business

Posted by Eric Stensvaag on Mar 22, 2018 1:56:42 PM
 We get questions every day about how music licensing works and, to be honest, the waters are muddy. For anyone trying to research the nuances of licensing, the topic can be time consuming and quite confusing. Here are the most commonly asked questions we hear about playing music for business purposes.
 
1. What are the options for digital / streaming background music for workouts, online retail, or other uses? Put simply, there are 3 basic options for your business to consider: you can use royalty-free music, work directly with the record labels and publishers, or let a B2B company like Feed.fm do the work for you.
  • Royalty-free music is cost-effective but unfortunately provides your business with generic, anonymous tracks that none of your customers will recognize. It’s the equivalent of (most) on-hold music, and is unlikely to generate positive results for your business.
  • Working with the labels and publishers comes with significant hurdles and costs, requiring sync licenses that range from $5,000 to $500,000 per song. While some content can be licensed globally, generally each country requires separate negotiations.
  • Your business can hire a company that has experience powering music for users, to guarantee that everything is legal and above board.

2. Can I wait to deal with music licensing when I attract more users?

Of course, technically the answer to this question is yes. That said, this is a case where it’s much better to ask for permission than to ask for forgiveness…If your business does not have the proper authorization, it can be held liable for damages of $750 to $150,000 per song played. And the performing rights organizations (PROs) responsible for compliance actively track down businesses that don’t have proper licenses. USA Today ran a revealing piece about the significant costs paid by New Jersey bars that didn’t have their music licenses. Needless to say, we strongly recommend that businesses deal with licenses before playing music in store or digitally.

3. Can I just work through music licensing on my own, crowdsourcing the information from pieces like this one to make sure I’m in the clear legally?

Unless your core business is streaming, there are a lot of possibilities for missteps with licensing. It’s important to underscore that the music industry is a highly complex environment where copyright holders aggressively go after parties that they believe have infringed upon those rights.

4. Do these same music licenses work for downloadable content and video sync licenses?

Unfortunately, no. Downloadable content, streaming music, public performances, and video synch licenses are all unique scenarios. This Copyright Clearance Center article may be a helpful starting point for understanding these other licensing use cases.

5. What are the BMI and ASCAP license fees?

BMI (Broadcast Music, Inc.), ASCAP (American Society of Composers, Authors and Publishers), and SESAC (originally Society of European Stage Authors and Composers) are 3 of the main PROs that songwriters, composers, and publishers join in the U.S. and Canada. PRO license fees ensure that these individuals get paid.

We hope this primer was helpful and clears up some of the mysteries around music licensing for business. This is not intended as legal advice and should be used purely for informational purposes. Please click the button below to connect with us or if you have any additional questions about music licensing.

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Topics: Music as content, Customer Engagment, Music for Retail, legal music, retail music, Music as a Service, Music streaming