Why Businesses Need to Pay for Music Use

The Value of Music in Enhancing Business Atmosphere

Music sets the mood and creates a welcoming environment, enhancing customer experience. It helps evoke emotions that align with your brand, making customers feel more comfortable and engaged.

Research shows that well-curated music can increase dwell time and spending. For example, studies indicate that retail stores playing slow-tempo music can encourage customers to shop longer, leading to increased sales.

Approximately 79% of customers notice background music, especially in leisure spots like restaurants. Implementing strategic music playlists can drive sales, improve customer experience, and encourage them to return.

However, playing the wrong background music can hurt sales. A global restaurant chain saw a 4.3% sales drop when playing random popular songs instead of no music, but sales jumped 9.1% with a mix of hits and lesser-known, brand-aligned tracks. Dessert sales alone soared 15.6%.

Additionally, the right music can enhance employee morale and productivity. Avoiding repetitive playlists ensures that employees remain engaged while still aligning with the brand's image.

The right playlist for your business depends on your brand—for example, indie beats for a cozy boutique or retro tunes for a classic diner. For any business, Soundtrack can help you get the right music and the licenses to play it.

The Investment Artists Make in Their Work

Artists and producers dedicate significant time, effort, and money to creating quality music. This includes production costs, studio time, and marketing expenses. In production costs alone, a full-length album can cost anywhere from $10,000 to $100,000 to create. Design work for materials can cost another $10,000 to hire experienced professionals, and music videos range anywhere from $2,000 to $50,000.

Just as businesses expect customers to pay for their services, artists deserve fair compensation for their intellectual property. Paying for music ensures that creators can continue producing high-quality content.

Licensing fees contribute to a thriving music ecosystem, supporting not only musicians but also producers, songwriters, and recording engineers.

Legal Obligations and Consequences

Unauthorized use of music can lead to hefty fines. Using a licensed music service ensures compliance and eliminates legal risks.

Music copyright laws protect creators by requiring businesses to obtain proper licenses for public performance—this includes both recorded and live music. Any use of music beyond personal listening may breach these regulations.

Performance rights organizations (PROs) like ASCAP, BMI, and SESAC manage music licensing. Businesses must obtain the appropriate licenses from these organizations to legally play copyrighted music.

Failing to secure the proper music licenses can result in lawsuits and significant financial penalties, which can be costly and damaging to a business's reputation.

Ethical Considerations

Business owners should recognize the value of paying for music just as they expect customers to pay for their products or services.

If a business wouldn't give away its goods or services for free, it shouldn't expect to use music without proper compensation.

Customers appreciate ethical business practices. When a business pays for music, it demonstrates support for artists, fostering goodwill and loyalty among consumers.

How to Ensure Compliance with Copyright Law

Businesses can choose from various licensing options. Typically, the simplest and most cost-effective solution is subscribing to a commercial music service that offers a fully licensed music catalog.

In other cases, some businesses may be permitted to play music from broadcast radio and TV under the Fairness in Music Licensing Act, but they must comply with strict square footage and equipment restrictions, and they’ll still be unable to stream music from consumer platforms such as YouTube, SiriusXM, Spotify, and iTunes because these services lack the necessary licenses for use in commercial environments.

Lastly, it is possible to license music directly with the PROs, but this is a complicated and often needlessly costly process. However, if your business hosts live music such as cover bands and DJs, this would be the only way to acquire the necessary licenses for that component of your music. This is because commercial music streaming services and the Fairness in Music Licensing Act do not cover live performances.

To help ensure compliance without unexpected expenses, include music licensing fees in operational costs. Many commercial streaming services offer affordable subscription plans tailored to different business sizes and needs.

Business Music Streaming FAQs

Do I need a license to play music from my personal Spotify account or another streaming service in my business?

Personal streaming services like Spotify or Apple Music are not licensed for commercial use, and it is not possible to get licenses to use these consumer solutions. These platforms lack the Public Performance Licenses necessary for streaming music in a commercial space.

To comply with copyright law, businesses must use a commercial music service, leverage the Fairness in Music Licensing Act, or obtain licenses from the PROs.

How much does a music license cost?

Costs vary depending on factors like business size, industry, and music usage. For bundled licenses that streamline the licensing process and give businesses the freedom to play music from a broad library, commercial streaming services offer pricing plans tailored to different needs.

What businesses can leverage the Fairness in Music Licensing Act?

For businesses that qualify, it’s possible to legally play music from a broadcast radio or TV without paying for additional licenses. Generally, the maximum size for a business to qualify is 2,000 gross square feet. However, for food and drinking establishments such as restaurants and bars, the limit increases to 3,750 gross square feet.

To play audio only, businesses can have no more than six loudspeakers in use, and there can be no more than four per room or adjoining balcony or patio. To play both audio and video, businesses may have no more than four audiovisual devices, such as televisions or monitors, and screen size must not exceed 55 inches measured diagonally.

It’s important to remember, however, that the Fairness in Music Licensing Act does not permit qualifying businesses to use CDs, MP3s, satellite radio services such as SiriusXM, or consumer music streaming services.

What happens if I ignore licensing requirements?

Businesses of all sizes can be caught playing unlicensed music and face hefty fines and legal action from PROs. Properly licensing music for your business is the best way to avoid these risks.

With the necessary music licenses in place, businesses can create an inviting atmosphere while respecting the work of musicians and avoiding legal complications.

Conclusion

Paying for music use is not just about avoiding legal trouble—it enhances customer experience, supports artists, and strengthens brand reputation. Music contributes significantly to a business's ambiance and sales, making it a worthwhile investment. Business owners should view music licensing not as a burden but as a crucial part of operating ethically and responsibly.

How Soundtrack Can Help

Soundtrack ensures you're fully covered. With over 1,300 curated playlists and an AI Playlist Creator pulling from over 100 million tracks, you can craft the perfect ambiance—legally. Schedule playlists in advance, customize music for different areas or zones, and enjoy an ad-free, legally compliant listening experience that enhances your brand without the worry.