Don’t Open a Musical Pandora’s Box at Your Business

I love Pandora, the online build-your-own station music service.

Indeed, I wonder if I’m the only guy on the planet who has J. S. Bach’s “Toccata and Fugue in D Minor,” Marvin Gaye’s “Inner City Blues” and Steely Dan’s “Any World” on the same station.

What if I have such confidence in my obviously sublime musical tastes that I want to play this Pandora station in my firm’s waiting area for our customers to savor? Could I do it legally?

Inspired by that vision, here’s the 101 on whether you can play music for your customers at your retail business, such as a restaurant, store or salon.
Before getting into specifics, understand that, in most cases, you may need a license to play the music for your customers even if you own a legal copy of the music or have a legitimate license to a music service.

That’s because, under copyright law, which protects music, you need to have a license to publicly perform music. With limited exceptions, having the legal right to listen to music for private enjoyment does not include the right to play that music for your customers.

Unless you fit in an exception, you have to pay music rights organizations for the right to perform music publicly.

If you play the tunes and don’t get a license, you could get socked in court for thousands of dollars in damages plus and you might have to pay the attorneys’ fees of the music companies.

For example, a federal appeals court recently upheld a decision that a California bar had to pay about $200,000 because it played eight songs without permission and then repeatedly ignored requests from a music-licensing organization for it to buy a license.

Fortunately, there are easy ways to take care of this in typical cases.

Let’s look at specific music sources, because how to be legal depends on the source of music:

Broadcast Radio

You can play broadcast radio (AM or FM) for your customers over speakers at your business without having to buy public performance licenses, if your business does not exceed certain square footage and if you abide by certain limitations on speakers.

The details of the rules are too long for a column, but you can find them on the “Licensing FAQ” section of the website of ASCAP (www.ASCAP.com), which is one of three music-licensing agencies.

Pandora (Pandora.com)

Most people listen to Pandora without subscribing. Yet, even if you subscribe to the premium service (Pandora One), you cannot play your Pandora station for your customers. Your personal-use Pandora license prohibits doing so.

Fortunately there is an easy solution. Pandora has partnered with DMX to offer special hardware that you can use to play your Pandora stations for the public at your business. Check out www.dmx.com/pandora.

Presently, this DMX service costs $25 a month plus $75 for the hardware.

As part of the package, DMX pays for the public performance licenses for you.

SiriusXM satellite radio (SiriusXM.com)

The same rule applies here as with Pandora – even if you have a personal-use SiriusXM subscription, you can’t play it for your customers.

Like Pandora, SiriusXM offers a business-use version of its service. The monthly subscription fee (it starts at $30 a month) is higher than for a personal-use subscription but it covers the public performance licenses.

Personal Music Collection
Suppose you want to play music you have downloaded from iTunes or you have on CD’s. In order to do so legally, you have to purchase public performance licenses from each of the three licensing organizations – ASCAP, BMI and SESAC. Between them, they hold licensing power to nearly all commercially available music.

That will be a hassle. In theory, you could buy a license from just one of those entities, but you’d have to make certain you play only songs from its catalog.

You’re probably better off by just using the commercial version of Pandora or SiriusXM or subscribing to a commercial-use music service. There are various companies that provide customer-entertainment music services and take care of public-performance licensing for you.

Any way you choose to handle this, just stay legal. Otherwise, to quote Marvin Gaye, your legal bills will “make you wanna holler.”

by John B. Farmer
Published in the Richmond Times-Dispatch
© 2012 Leading-Edge Law Group, PLC. All rights reserved.