Playing background music in your restaurant can significantly enhance the dining experience, creating an inviting ambiance that keeps customers returning. According to restaurant revenue statistics, the presence of background music can lift sales by as much as 9.1%!

However, using music in a commercial setting isn't as simple as pressing play on your favorite playlist from your favorite music streaming platform. There are several legal considerations to keep in mind to avoid costly fines and ensure compliance.

This article will review five key legal issues to consider when playing background music in your restaurant.

1. You Need Proper Licensing

When it comes to playing background music in your restaurant, or even music for your staff in the kitchen, one of the most crucial legal aspects is obtaining the appropriate music licenses. Unlike personal use, playing music in a public setting like a restaurant requires permission from the copyright holders, according to the U.S. Copyright Act.

Organizations like ASCAP (American Society of Composers, Authors, and Publishers), BMI (Broadcast Music, Inc.), and SESAC (Society of European Stage Authors and Composers) handle the rights and distribute licenses on behalf of the writers, composers, and publishers.

These performance rights organizations (PROs) manage the rights to millions of songs and provide licenses that allow businesses to play music legally.

Failing to obtain the necessary licenses can result in significant fines and legal action from PROs. These organizations actively monitor businesses and take legal steps to protect the interests of artists and composers. By securing the appropriate licenses, in addition to fairly compensating artists for their work, you’re legally protecting your restaurant.

Most restaurants will need a blanket license from one or more PRO. A blanket license gives you the right to play music from the organization’s catalog. If you want to play music from multiple catalogs, you may need multiple licenses. BMI, ASCAP, SESAC, and GMR all represent different songwriters, and sometimes a single song has multiple songwriters.

For example, much of Whitney Houston and Celine Dion’s music was written by other songwriters or a team of songwriters.

This can get complicated, but in most cases, you’ll need to obtain licenses from all of the PROs if you want to play background music in your restaurant. Additionally, if you play music videos, maybe to go along with your restaurant's digital menus or in marketing materials, you might need a synchronization license from the PROs.

As an alternative, you can sign up for a restaurant music service that has these licenses worked out with the industry. Typically, it’s cheaper to go with a business music service like Soundtrack (formerly Spotify for Business) rather than licensing directly on your own.

2. You Can’t Use Personal Streaming Services Like Spotify, Apple Music, or YouTube

Many restaurant owners use digital music services or streaming platforms to provide background music in their establishments.

While these platforms are convenient, you can’t legally use them in a restaurant. For example, your restaurant manager can’t simply sync their personal Apple Music account to the restaurant’s sound system and play music for the customers.

This is because the licensing for consumer music services doesn’t cover the use of copyrighted music in a commercial or business setting. It’s also against the terms and conditions for these services, such as Spotify.

Most streaming services like Spotify, Apple Music, and Pandora have terms of service that explicitly state personal accounts cannot be used for commercial purposes. Using a personal account in your restaurant is a violation of these terms and can lead to account suspension or legal issues.

When selecting a digital music service, ensure it offers comprehensive coverage and adheres to licensing regulations. These services often provide curated playlists tailored to enhance the customer experience while keeping your restaurant legally compliant.

3. Radio Use Is Limited

Playing the radio in your restaurant involves several considerations related to music licensing and public performance rights.

Playing the radio in a commercial establishment like a restaurant constitutes a public performance, and you are required to have the appropriate licenses from PROs such as ASCAP, BMI, and SESAC.

Some radio stations may already have agreements with PROs that cover public performances, but this typically applies to small businesses with a limited number of speakers and specific square footage. You should not assume this automatically applies to your restaurant.

In the United States, there is an exemption under the Fairness in Music Licensing Act that allows certain small businesses, including restaurants, to play radio or TV broadcasts without needing a separate public performance license, provided they meet specific criteria. These criteria include:

  • For food and drink establishments, if the space is less than 3,750 square feet (excluding parking), the exemption applies.
  • For establishments larger than 3,750 square feet, they can have up to only six loudspeakers, with no more than four in any one room or adjoining outdoor space.
  • For retail stores, if the space is less than 2,000 square feet (excluding parking), the exemption applies. Stores larger than 2,000 square feet must also adhere to the six loudspeaker rule.

If you’re considering using radio as your restaurant’s background music, follow these steps to make sure you’re compliant:

  • Determine whether your establishment meets the size criteria for the exemption under the Fairness in Music Licensing Act.
  • Ensure your speaker setup complies with the limitations on the number of speakers if your restaurant exceeds 3,750 gross square feet.
  • Contact the relevant PROs to confirm whether you need additional licenses for playing the radio in your specific situation.
  • Keep records of your compliance with the size and speaker requirements in case of any inquiries from licensing bodies.

You can play the radio in your restaurant under certain conditions, but it’s important to understand and comply with the applicable licensing requirements and exemptions.

If your restaurant qualifies under the Fairness in Music Licensing Act, you may not need a separate public performance license. However, it’s always best to verify with the appropriate PROs and ensure your setup meets all legal requirements.

4. Licenses for Background Music and Live Music Are Different

Live music is one of many ways to draw customers, creating a lively and engaging atmosphere in your restaurant. However, hosting live music performances introduces additional legal considerations regarding music licensing.

When hosting live music, the responsibility of obtaining the proper licenses typically falls on the venue owner, not the performers. This means you need to have the appropriate licenses from PROs even if the band or artist claims they have permission to perform certain songs.

Cover bands, which perform popular songs written by other artists, are a common feature in many restaurants. If you host cover bands, you must ensure that you have licenses that cover the songs they perform. This is because performing music without the permission of the original artists or copyright owners is a violation of copyright law.

This is also the case with original acts, as their songs are often owned by third parties like publishers or record labels rather than the artists themselves, and these entities also get paid licensing fees from the PROs.

So if you plan on hosting live music in your bar or restaurant, make sure you obtain the proper licenses from the PROs first.

5. Unauthorized Use of Music Can Be Expensive

Unauthorized use of music, whether intentional or accidental, can lead to significant legal repercussions.

The penalties for copyright infringement range from hundreds to tens of thousands of dollars per infringed work, plus attorney's fees and court costs. This is more than the cost of kitchen fire damage to a restaurant or bar and can cause a restaurant to close down.

Understanding what constitutes unauthorized use and how to avoid it is essential for any restaurant owner.

Here are some common examples of unauthorized music use:

  • Playing Personal Playlists: Using personal playlists or CDs for background music without proper licensing.
  • Streaming from Personal Accounts: Utilizing personal streaming accounts for commercial use.
  • Ignoring Licensing Requirements: Failing to secure licenses from all necessary PROs or from a licensed business music streaming service.

Unauthorized use of music can result in hefty fines, legal action, and damage to your restaurant’s reputation. PROs and copyright holders are vigilant in protecting their rights, and businesses that fail to comply with licensing regulations are often subject to enforcement actions.

To ensure compliance, always use licensed music sources and maintain up-to-date licenses from all relevant PROs. Regularly review your music usage practices and stay informed about changes in copyright law and licensing requirements.

Conclusion

Playing background music in your restaurant is a powerful tool to enhance the dining experience and attract customers. However, it comes with legal responsibilities that must be carefully managed.

Investing in the proper licenses and using reputable music services designed for commercial use not only protects your restaurant from legal issues but also supports artists and composers by ensuring they are fairly compensated.

By taking these steps, you can create a vibrant and inviting atmosphere in your restaurant while staying on the right side of the law.