Retailers, Recorded Music and the Federal Copyright Act

According to the federal Copyright Act (17 U.S.C. §101), any business which plays copyrighted music must obtain permission for the right to use that music.  This requirement pertains to businesses which use live music, as well as those which use recorded music played over a radio, TV set, tape deck, compact disc player or other equipment.

Three organizations, the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC act as the licensing agencies for the copyright holders of the vast majority of published songs.  Each organization has a licensing program for retailers, shopping malls and others who use music in their business.  Participation in the licensing program of all three organizations is necessary, since they act as agents for different music, and it is quite difficult for a retailer to ascertain which organization licenses what particular piece of music.  Annual license fees vary depending on the number of stores owned, square footage, the number of speakers used, and whether the transmissions are audio only or audio-visual.

The Fairness in Music Licensing Act of 1998 (Public Law 105-298) expanded exemptions to the requirement that all retailers playing recorded music in their stores obtain ASCAP, BMI and SESAC licenses.  The exemptions in the Copyright Act apply only to the playing of music received via broadcast or satellite transmission; thus, they are not applicable to the playing of live music (such as by a piano player in a store) or recorded music through use of tape decks and compact disk players.

The exemptions in the Copyright Act include:

  • A total exemption from licensing if an establishment plays recorded music over only one receiver (TV or radio) of a type normally found in the home.  This so-called “home-style” exemption has been in the law for several years and applies regardless of the size of the establishment; however, courts have held that utilizing a receiver to play music over several speakers in a store can amount to a retransmission of the broadcast reception and thus void the licensing exemption. 
  • A total exemption from licensing for a retailer with 2,000 gross square feet of space or less (including non-public areas, but excluding parking) [17 U.S.C. §110(5)(A)].  If a retailer has more than 2,000 gross square feet of space, it is still exempt if:
    •  in the case of an audio-only performance, there are no more than six loudspeakers and not more than four in any one room; or
    • in the case of an audiovisual performance (e.g., by using TV sets), there are no more than four such sets, not more than one in any one room and no set over 55 inches; in addition, the same loudspeaker requirements are applicable.

The same exemptions apply to "food service and drinking establishments" (i.e., restaurants, taverns and bars), but with a 3,750 gross square foot cut-off.  These exemptions only apply if the music is received over a typical radio or television station. They do not apply if the retailer is playing pre-recorded music such as a CD.

  • A total exemption from licensing for any retailer who plays music on an "audiovisual or other device" for the sole purpose of selling the device [17 U.S.C. §110(7)].  For example, a musical instrument retailer who uses a piano to play music would be exempt, because the purpose of playing is to sell the piano; the same would be true for a consumer electronics retailer who has a TV set turned on his its customers.  However, if the music retailer sponsored a concert or other performance, or did not fit within the square-footage exemption discussed above, licenses must be obtained.

If a retailer has a question about a specific situation, it’s a good idea to check with an attorney familiar with this aspect of copyright law.  Failure to comply with the licensing fee requirement constitutes an infringement of copyright and can subject the retailer to financial penalties ranging upward from $500 for each piece of music infringed.