Music Licensing for Restaurants, Nightclubs & Bars

By Jeffrey E. Jacobson & Justin M. Jacobson

As more and more individuals are visiting local culinary and entertainment establishments to enjoy themselves, the need for the business owner to entertain their crowd has become of paramount importance.  Many establishments, including restaurants, nightclubs, bars and other publicly accessible shops aim to attract and entertain customers through the use of music; however, many business owners may not be aware of how to legally undertake this endeavor.  Generally, any public premise requires a public performance license from the appropriate performing rights organization to legally play the music for its guests. This requirement applies to any establishment that is playing live music, including a live band, a solo artist, a disc-jockey as well as for any music playing over the speakers in the store or restaurant. This licensing requirement applies to the public playing of both traditional terrestrial radio as well as more recent advancements, including digital and satellite radio and music streaming platforms such as Pandora, Spotify or Apple Music.

In order for a business to obtain the appropriate license, they must contact the respective performing rights organizations (P.R.O.).  Today, there are currently four performing rights organizations in the United States, which include: ASCAP (American Society of Composers, Authors & Publishers); BMI (Broadcast Music Inc.); SESAC (now SESAC, Inc., formerly the Society of European Stage Authors & Composers); and, GMR (Global Music Rights).  These P.R.O.s are authorized to license, manage, and compensate their members for the public performance of their works.  Generally, most countries only have one performing rights organization; and, as a matter of fact, there are several areas of the planet where several countries share one organization.  In some countries, it is an official branch of the government; and, in other nations, mechanical rights and performing rights are collected by the same organization.  In some others, such as the U.S., mechanical rights and performing rights are generally collected by different organizations.  For example, the Harry Fox Agency issues mechanical licenses for works it has rights to and does not issue any public performance licenses. These performing rights organizations license “small” performing rights.  That is for the non-dramatic performance of music.  “Grand” performing rights licenses are for the use of music in dramatic productions and a different type of license is required to be issued by other parties.

As discussed, nightclubs, taverns, bars and restaurants generally all require a license to legally play music for its patrons.  In most cases, the business can receive a “blanket” license from a performance rights society, which permits them to publicly perform the society’s repertoire without requiring them to obtain a license for each song and/or artist played.  Therefore, unless there is absolutely NO use of music; entertainment, culinary and other retail establishments need these licenses.  Additionally, the use of a background music service, such as Muzak, might obviate this need since these types of services obtain the authorization for music rights.  This means that a user just pays for this type of service and they receive the necessary public performance licenses through them.    Ultimately, this means that the use of a radio or streaming of music in any retail establishment necessitates these licenses; and, without them, the proprietor could be liable for copyright infringement for the unauthorized public performances of music.

Many culinary and retail establishments have tried to circumvent these laws; however, this is very old established law.  Traditionally, the performing rights organizations charge different fees and rates based on the size of the store.  So, a small store pays less than a large store with a commercial grade multi-speaker sound system. 17 U.S.C. § 100 et. al.

Overall, most establishments, and in particular, large ones, should be aware of the requirement for proper licensing to permit the public transmission of music on an owner’s property.  This requirement applies to concert halls, nightclubs, restaurants, retail stores and other similar establishments and the lack of such licensing can result in potential monetary or other liability.

This article is provided for general informational purposes only and should not be construed as legal advice.  This article is not intended as legal or business advice, as an attorney or other professional specializing in the field should be consulted.

© 2018 The Jacobson Firm, P.C.

About the author

Justin M. Jacobson, Esq. - Vice-President, The Jacobson Firm, P.C. - Attorney Specializing in Entertainment, Sports, Esports, Fashion and Art Law. In particular, The Jacobson Firm, P.C. handles Trademarks, Copyrights, Contracts, Estate Planning, Music Business and Brand Development on behalf of creative talent and lifestyle brands.

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