There's a lot that goes into creating the right ambiance at your restaurant or bar. Your interior and exterior design. Your decor, seating, menu design, and even lighting. But more so than any other factor, the right music can resonate with your customers at an emotional level. Done right, the music you play becomes part of your brand. Unfortunately, it's not just a matter of putting together your ultimate playlist on Apple Music and cranking it over the PA. As a restaurant operator, you also need to ensure that you've legally licensed that music for business use.
A 2018 Nielsen Music study of 5,000 small businesses found that 87% of business owners were illegally playing music at their businesses by using personal streaming services such as Spotify and Pandora. The practice was so widespread that songwriters, composers, and musicians (small business owners in their own right) were losing an estimated $2.65 billion a year.
The issue isn't that business owners are trying to short-change songwriters and musicians. Indeed, the same Nielsen Music study indicated that 86% of businesses are willing to pay for music, and in reality, most already are paying for music—they just don't realize they're only paying for a personal license, which doesn’t allow them to play the music at a business. Similarly, many bar and restaurant owners simply don't realize that they also need to license music played by live bands and DJs.
No restaurant operator wants to hear about another cost they have to deal with, but luckily there are plenty of legal—and affordable—ways to play fully licensed music at your business. And most of them come with added benefits that can help you save time and give your restaurant a competitive edge. As always, this is for informational purposes only—consult with a legal expert, as necessary.
What does "fully licensed music" mean?
Like other types of intellectual property, most music is protected by copyright law. When you buy an album or subscribe to a streaming music service, you're paying for your personal use of that music, and part of that money goes to the music creators. The tunes you hear in movies, commercials, TV shows, and radio stations? They're all licensed for their own specific commercial use. When you run a bar, restaurant, or other type of small business, you likewise need to get the appropriate commercial license for any music you play.
The traditional way to do this is to license music directly through a performing rights organization (PRO), although many modern streaming music services for businesses can handle that part for you now.
How much is a music license for a restaurant?
Costs for registering your restaurant or bar with one of the PROs can start as low as $250 to $400 per year. Meanwhile, music streaming services for restaurants typically start at around $30/month. See below for the pros and cons of each.
Can my business get fined for playing unlicensed music?
Yes. Egregious cases of willful copyright infringement can lead to federal legal penalties of up to $250,000 per offense and even 5 years of imprisonment, although this is pretty rare. For bars, restaurants, and other small businesses, the most common danger of playing unlicensed music is getting sued by one of the PROs, with fines ranging anywhere from $750 to $300,000 for every infringement. In 2023, ASCAP sued 12 restaurants and bars across the country for copyright infringement, including Bay Area bar Neck of the Woods for $30,000. Typically, the PROs notify business owners prior to legal action, with the goal of encouraging businesses to get an appropriate license.
Really? Even for playing background music?
Yes, really. Songs played from personal playlists, jukeboxes, live performances from bands and DJs, and even karaoke are all copyrighted. Play them at your business for guests, and it's considered a public performance and requires commercial licensing.
How to legally play music at your business
Thankfully, there are plenty of legal options for playing music at your business, both free and paid. Obviously, the paid options give you more control when it comes to fitting the music to your brand. These include the ability to choose from a multitude of playlists across multiple music genres, as well as curating your own custom playlists and creating custom schedules.
Free music options
- Play publicly broadcasted radio. It's usually easy enough to find a local radio station that plays an appropriate style of music, but unfortunately, there’s no getting around the commercials and DJ chatter, which are a major turn-off to many customers. There are also some legal rules to know. You can only legally play radio (or TV broadcasts) if your restaurant is smaller than 3,750 square feet, or if the music is played on fewer than 6 speakers or TVs, and as long as you don't charge a commission fee.
- Play music in the public domain. Music written prior to 1922 is typically in the public domain, so you can play it without having to pay for it. The downside is music from the 1920s and earlier isn’t the right fit for every restaurant. You'll also need to either find a free streaming public domain service or create your own playlists, which can be time-consuming.
License directly through a PRO
There are three primary PROs in the United States who represent songwriters: ASCAP, BMI, and SESAC. If you host live music, including bands, DJs, and even karaoke, you'll want to register with one of the PROs. Licensing with a PRO also gives you the right to play your own music collection at your business. The major PROs have sharing agreements, so in most cases, you only need to get licensed with one. If you're a member of a state restaurant association, be sure to check with them to see if they offer any group discounts.
- ASCAP represents 950,000 songwriters, composers, and music publishers holding the copyrights to millions of songs from "both the hottest artists of today and the writers of your all-time favorite songs." Their lowest annual fee is a little over $1 per day and gives you the right to play music as much as you want, "whether it's off your iPad, CDs or performed live by a DJ, karaoke service, or live band."
- BMI gives your business access to over 22.4 million musical works created and owned by more than 1.4 million songwriters, composers, and music publishers. They offer flexible licensing so you "pay only for the music you play, whether it’s seasonal or every night of the week."
- CESAC is trusted by thousands of businesses and associations, including the New York State Restaurant Association. With a SESAC license, "your business can legally play music from our top-selling affiliates such as Adele, REM, Jack Harlow, Bob Dylan, and Neil Diamond."
Paid streaming services
If you primarily want to play background music, then music streaming services for businesses not only handle the licensing for you but also offer many time-saving features, including the ability to pick premade playlists, create your own playlists, create custom schedules, and set up an explicit lyrics filter. Just keep in mind that these services only license the songs played through their platform, so if you perform other types of music, you'll still want a license through one of the PROs.
Here are 4 of the most popular business music streaming services, most of which offer a free trial.
- Soundtrack Your Brand (aka Spotify for Business). This popular service offers the "world's biggest catalog" and gives you total control of the songs you play. If you already have Spotify playlists you like or want to create your own branded playlists, this is the way to go.
- Pandora for Business. Pandora teamed up with Mood Media, allowing you to fine-tune and license your personal Pandora playlists to play at your business. Like the Spotify-backed streaming service, it costs only a little more than a personal subscription. If you're already familiar with how Pandora works and like it, this one's for you.
- Cloudcover Music. Also owned by Pandora, Cloudcover offers a more out-of-the-box solution, with affordable streaming channels that are branded by business type, such as coffee shops, retail, restaurants, and more. It also allows you to schedule in-store audio messages across multiple locations, making it a great choice for restaurant groups.
- Sirius XM for Business. This popular satellite and streaming radio service gives you access to 240+ exclusive business channels with no long-term contracts. Like Cloudcover, it enables music scheduling and audio messaging.
While no one likes having to deal with getting another license or paying another monthly cost, both the PROs and streaming providers offer a lot of value. In the same way that the best restaurant POS or bar POS helps you save time and create better guest experiences, the right music service can help you get out of the weeds of managing a time-consuming task while helping your guests connect with your brand.
About the author: In addition to being Editorial Director at SpotOn, Garrett Calcaterra is a performing musician and songwriter who is a member of ASCAP.