Music Licensing for Bars, Restaurants and other Eating and Drinking Establishments

Musical compositions, like other copyrighted creations such as videos, computer software, magazines and books, are the legal properties of their creators. The copyright law protects the musical works of songwriters, composers, and music publishers by granting them the exclusive right to perform their works in public. A Music Performance Agreement, in turn, gives you the right to perform these musical properties in a business setting.

Although most people buy tapes, CDs, or digital audio files thinking they are now their property, there is a distinction in the law between owning a copy of the music and owning the songs on the CD, etc. There is also a difference between a private performance of copyrighted music and a public performance. When you buy a tape, CD, or digital audio file, the purchase price covers only your private listening use, similar to the “home” use of “home” videos. Once you decide to play these tapes, CDs, or your iPod in your business, it becomes a public performance.

Yes, but only nominally and not for the public performance of their works, which is a separate use. Since in many instances the songwriter or composer is different than the artist performing the work, approximately 50%, and in some cases as much as 75% of a songwriter’s income comes from the public performance of their work. This makes it a critical component of the songwriter’s income and is what enables them to continue to create music for use in your business.

About one out of every two songs played on radio is a BMI-licensed song. The BMI repertoire also includes the music of songwriters and composers in more than 60 other countries. The BMI repertoire has won numerous Grammys, Country Music Association Awards, and American Music Awards. BMI writers also represent the largest percentage of inductees into the Rock & Roll Hall of Fame, account for one-half of all of the winners of the coveted Pulitzer Prize in the field of classical music, and have received the most Rhythm & Blues Foundation Pioneer Awards and Downbeat Jazz Poll Awards.

For a list of the more than 300,000 songwriters, composers, and music publishers who are affiliated with BMI, as well as their more than 6.5 million musical works, please visit the BMI repertoire. You can also call the BMI repertoire information line at 1-800-800-9313 where you can request information on specific song titles.

Since it’s your business or organization that’s benefiting by the performance of music, you are responsible for ensuring your organization is properly licensed. This responsibility cannot be passed on to anyone else even if musicians hired are independent contractors.

Many Commercial Music Services (CMS) are licensed with BMI for the audio only programming they provide to the venue. The venue must confirm that a particular CMS is appropriately licensed with BMI. There are several limitations in BMI’s agreement with the CMS providers that will not allow them to license on the venues behalf. Those limitations apply and the venue must obtain its own licensing with BMI if:

• The venue is charging an admission fee or cover charge of any kind;
• The venue utilizes the programming for an accompaniment to dancing or is used by a DJ/VJ;

For all other types of live or recorded music, which include but are not limited to tapes, records, CD’s, VJ’s, televisions, free-play jukeboxes, Karaoke or other digital audio not provided by the CMS, the venue must obtain the appropriate licensing from BMI.

Once appropriate licensing is obtained from BMI, the establishment is covered for the use of BMI music. However, it is important to note that if any of the above applies, or music is used which is represented by either of the other two performing rights organizations; the establishment needs to secure additional licensing to cover all its music uses.

Yes, TV, cable, and radio stations enter into license agreements with BMI. However, these agreements do not cover the re-broadcast of such TV, cable, and radio to the public at properties like yours.

The Fairness in Music Licensing Act of 1999 created new copyright exemptions for businesses that perform music over radio, television, cable and satellite. Under this law, businesses that meet the following conditions are exempt from the requirement that such performance be licensed from the copyright owners of the performed works:

a) All restaurants, bars and grills that contain fewer than 3,750 gross square feet (excluding space used for customer parking and for no other purpose) are exempt;

b) Those restaurants, bars and grills that contain 3,750 or more gross square feet (excluding space used for customer parking and for no other purpose) are exempt if (i) their audio use is via 6 or fewer speakers with no more than 4 in any one room or adjoining outdoor space, or (ii) their audio/visual use is via not more than 4 TVs, of which no more than 1 TV is in any room and no TV has a diagonal screen size greater than 55 inches, and the above speaker/room requirements are met.

c) All non-food service and beverage establishments that contain fewer than 2,000 gross square feet (excluding space used for customer parking and for no other purpose) are exempt, as are those non-food service and beverage establishments that contain 2,000 or more gross square feet (excluding space used for customer parking and for no other purpose) if they meet the above speaker and television screen requirements.

In order to qualify for this exemption, in addition to the above conditions, no direct charge may be made to see or hear the transmission, the transmission may not be further transmitted beyond the establishment and the incoming transmission must itself be licensed by the copyright owner.

In addition to these exemptions, Congress created a system for owners and operators of fewer than 7 non-publicly traded businesses to contest the reasonableness of the license fee offered to them by the United States performing rights organizations. Such proprietors can file this proceeding in the established performing rights organization rate court in New York or in a federal district court in one of 11 other specific locations around the country. While the proceeding is pending, the owner has the right to perform music by paying an interim fee into the court. The decision of the local judge is to be reviewed by the presiding rate court judge and applies only to that owner. An owner is limited to one proceeding per license agreement.

BMI operates on a non-profit-making basis. All fees, less BMI’s operating expenses, are paid to our affiliated songwriters, composers, and music publishers in the form of royalties. Currently, more than eighty-six cents of every dollar of your organization’s licensing fee goes to our affiliated copyright owners.

We believe that a BMI license serves all your music needs with access to the most award-winning repertoire of music in America. But if you choose to use music not in the BMI repertoire, you must also receive permission from other copyright owners. There are two other performing rights organizations in the United States. If you play the music these organizations represent, then you must have separate agreements with them or the individual copyright owners.

BMI belongs to local and national food & beverage trade associations in more than 40 states. Many of these associations have discount music agreements with BMI and provide substantial discounts to their members on BMI licensing fees. Contact your association to see if you qualify for one association discount only. In addition, BMI is a member of the Council of Better Business Bureaus which provides information on music licensing and the service that BMI provides at www.bbb.org/musicinthemarketplace.