16 February 2024

Thinking of Playing Music at Your Small Business? This is What You Need to Know

By Ronald Smith

If you like to play music at your small business, the Department of Justice Antitrust Division (DOJ) is currently reviewing two agreements called ASCAP and BMI Consent Decrees. These agreements have been around since the 1940s and regulate how music is played, broadcasted, and streamed.

If the review results in changes, it could mean that businesses like yours will have to pay higher fees to play music in their establishments. This not only applies to physical stores but also to online companies, movie companies, and commercials.

The Review Process

So, there’s been a lot of buzz lately about how the music industry is going through some major changes. And you know what? It’s all because of these fancy new streaming services like Spotify and Pandora. They’ve really shaken things up in the industry.

Now, here’s something interesting. Makan Delrahim, the Assistant Attorney General for the Antitrust Division, recently spoke up about these changes in a press release. He wanted to dive into the issue and see how it’s affecting everyone.

In his own words, Delrahim said, Man, there have been so many changes in the music industry lately. The needs of the musicians and the people who listen to music are always evolving. As the Division, it’s our job to take a closer look every now and then and see if the rules we have in place are still working for the American consumer. We gotta make sure we’re promoting competition and efficiency in the industry, especially with all these cool new innovations.

Did you know that the Department of Justice (DOJ) has been collecting comments on the review of the antitrust consent decree? Pretty important stuff, right? If you want to have your say, you better get it in before August 9, 2019!

Now, let me tell you what all this means. The consent decrees, which are a set of rules, could be thrown out, edited, or kept just the way they are. It’s a big decision that could impact a lot of people.

Elizabeth Matthews, the big boss over at ASCAP, which represents the music industry, has something to say about this. She thinks that having less government regulation and more freedom to do their thing would be great for music creators. According to her, a more flexible system would mean fairer compensation for songwriters and a better chance for competition and innovation. Sounds pretty cool, right?

The Consent Decrees

Let’s dive into what these consent decrees are all about. Back in 1941, ASCAP and BMI agreed to only offer blanket licenses that cover their whole catalog. In simpler terms, they can’t charge different fees for songs that are not the same. It’s a way to keep things fair and balanced.

Why do we use a consent decree? Well, when a whole industry makes an agreement with the government, it helps ease worries about any unfair business practices. It’s like a legal contract that binds both the government and the companies involved.

When it comes to music, there are groups called Performing Rights Organizations (PROs) that follow these consent decrees. They work to protect the rights of the people who create music.

Who are the PROs?

The PROs represent the music industry. There are four main ones: Broadcast Music Inc. (BMI), the American Society of Composers, Authors and Publishers (ASCAP), the Society of European Stage Authors and Composers (SESAC), and Global Music Rights (GMR).

These PROs help protect the original work of creators by acting as a go-between for restaurants and songwriters. Their aim is to make it easier and more affordable for businesses to get the proper licenses for the music they use.

Did you know that ASCAP and BMI have to license public performance rights at a fair rate, thanks to consent decrees entered by the DOJ back in 1941? It’s true! These two organizations control almost 90% of the market, so any changes they make impact the entire industry.

How to Play Music in Your Business Legally

Music is a big deal for small businesses, especially those in the hospitality industry. It helps set the mood and create a welcoming atmosphere. Whether you’re playing live music, using the radio, TV, or streaming services, you need to be aware of your legal responsibilities.

If you don’t have the proper licensing, your business could get into serious trouble for copyright infringement. And trust me, the fines can be really expensive.

If you don’t have to pay to listen to the music, the law says that restaurants like yours are exempt from copyright restrictions under Section 110 (5)(B) of the federal copyright law. This exemption applies to music played on the radio, TV, cable, and satellite sources. However, if you have live bands or play music from CDs, it’s not exempt.

There’s another exemption based on the size of your establishment. If your place is smaller than 3,750 square feet and you have fewer than four TVs, you’re exempt. But if your food service or drinking establishment is 3,750 square feet or larger, you’ll need to get public performance rights for TVs or radios.

Keep in mind that there are conditions and specific rules that apply, so make sure to find out what they are if they apply to you.

If you don’t want to pay for a license, you can always play music that is royalty-free or in the public domain. You can find this type of music at Pdinfo.com.

The trouble for small businesses is that lots of owners don’t know about the things they’re responsible for. If you want to play music or already are playing music without paying a fee, you should check out the National Restaurant Association’s (NRA) website.

They’ve got an article called 11 Questions about music licensing that’s a great introduction to the basics of licensing.

They’ve got an article called 11 Questions about music licensing that’s a great introduction to the basics of licensing.