Businesses and Commercial Real Estate Owners May Need Copyright Public Performance Licenses

Whitman Legal Solutions, LLC

Whitman Legal Solutions, LLC

Businesses and commercial property owners are planning holiday events, and most of those events will include music. As party goers sing along with their favorite artists, some will be unknowingly hurting composers and performers when recordings are played without buying public performance licenses (PPL).

Recently, internationally-renowned violinist Anne-Sophie Mutter stopped in the middle of her performance of the Beethoven violin concerto with the Cincinnati Symphony Orchestra. During the first movement of the concerto, a woman in the first row of the audience was recording her performance on a cell phone, even though recording was prohibited. A stern look from Ms. Mutter caused the women to put her phone down.

But the audience member was not to be deterred. After the second movement, she took out a second cell phone, with a battery pack and recorded Ms. Mutter’s performance of the second movement. Ms. Mutter stopped her performance and began a dialogue with the audience member. The situation eventually ended with the Cincinnati Symphony President escorting the audience member from the auditorium to applause from other audience members.

The consummate professional, Ms. Mutter regained her composure, restarted the second movement, and completed her performance. Ms. Mutter’s recovery from that disruption of her performance was impressive. But what impressed me the most was Ms. Mutter’s willingness to take a stand. By objecting to the recording, she spoke not just for herself but for less-renowned musicians who might not have the power to object to unauthorized recordings of their performances.

What Rights Does Your Music License Agreement Give You?

Many people believe that when they pay for a subscription to a music subscription service, such as Apple Music, Spotify, Pandora, Amazon Music, or Google Play Music, they have the right to play music whenever and wherever they want. But these services have terms of service, which describe how the consumer can use the service. These terms include a limited music license agreement, which describes how, under what circumstances, and where the consumer can use the music.

Typical consumer music licenses for these services do not allow the subscriber to play the music in a public setting or for commercial purposes. For instance, Spotify’s Terms and Conditions of Use only allow subscribers to use the music for their “own personal, non-commercial use.” Pandora’s Terms of Use similarly limit use to the subscriber to use the music for “individual personal, non-commercial purposes and not for the sublicense to or use by third parties.” People who want to use music for commercial purposes or public performance must instead purchase a PPL.

Copyright Rights in a Sound Recording

Digital music actually may consist of two copyrights. One copyright is to the musical composition being performed, and the other copyright is to the sound recording of the performance, and each requires a PPL.

For instance, a recording of violinist Mark O’Connor performing The Fiddle Concerto he composed would be subject to both Mr. O’Connor’s copyright for the concerto and the sound recording of his performance. But a recording of Ms. Mutter performing the Beethoven violin concerto would include only a copyright for the sound recording since the Beethoven violin concerto is in the public domain. And if there were a recording of Ms. Mutter performing The Fiddle Concerto, that recording would be subject both to Mr. O’Connor’s copyright in the concerto and a copyright in the sound recording of Ms. Mutter’s performance.

Public Performance Rights

Someone who owns a copyright to a musical composition has exclusive public performance rights regardless of the means of performance. But a sound recording copyright owner’s rights are limited to public performance through digital audio transmission.

Under copyright law, public performance includes more than performances open to the public. Public performance also includes performances outside of a family and its close circles of friends.

Some people believe that copyright doesn’t apply to an event where there is no admission charge or that copyrights don’t apply to nonprofits. However, the exclusive right under copyright law to perform a work publicly doesn’t have exceptions based upon gain or profit.

How Copyright Public Performance Rights Affect Businesses

Most businesses are involved in the public performance of music. Stores play holiday music to get customers into the shopping spirit. Restaurants play background music to enhance the ambiance. Fitness centers play fast music during aerobic exercise classes to encourage class members to move quickly. Spas play calming background music to create a sense of relaxation.

Businesses use music on their websites. Or, they may have on-hold music in their telephone systems (yes, I paid a PPL license fee for my law firm’s on-hold music). Someone giving a continuing education presentation adds music to liven up their slide show.

Nonprofits and private groups also can give public performances of recorded music. A private country club plays recorded music in its swimming pool area to recreate a feeling of summer fun. A charity plays recorded music at a dance fundraising gala.

All of these are likely to be public performances. And unless the music is in the public domain, all involve use of copyrighted material and require that the user purchase the appropriate PPL.

How Copyright Public Performance Rights Affect Real Estate Owners

Real estate owners frequently also are involved in the public performance of music. Owners in nearly every asset class need to be on the lookout for the use of recorded music, which might be subject to copyright.

An office building pipes recorded music into its elevators. An apartment building plays music in its lobby to create an appealing environment for prospective tenants. A senior housing community plays recorded music during a senior fitness class. A shopping center plays music in its common areas to energize shoppers. Even a self-storage facility might have on-hold music that is subject to copyright laws.

How Businesses and Real Estate Owners Can Comply with Copyright Laws

Businesses use two methods of complying with copyright laws for sound recordings. They either purchase licenses from the major performance rights organizations (PRO), or they obtain a subscription for play lists from a company which takes care of licensing for its subscribers.

PROs in the US are Broadcast Music Inc. (BMI), American Society of Composers, Authors and Publishers (ASCAP), and Global Music Rights (GMR). Each PRO has a large catalog of licensing rights to a wide variety of copyrighted music and sound recordings. However, the catalogs rarely overlap. Plus, the publishers and songwriters for a recording might be represented by different PROs.

It’s difficult for a business to select music only from a single PRO’s catalog, and some music might require licenses from two PROs. Therefore, businesses should purchase blanket licenses that cover all three PROs.

Mood Media, owner of the Muzak brand known for its elevator music, provides several business options. Cloudcover Music, BCM Music Systems, and Imagesound are among the companies which provide similar options. These companies obtain the required copyright licenses for subscribers. Businesses should evaluate which service best meets their needs, as this article doesn’t make product recommendations.

Who Doesn’t Need to License Public Performance of Music?

Although most businesses will need to purchase music licenses, sometimes business can avoid the need to obtain a license. For instance, if a business is small (less than 2,000 square feet or limits the number of speakers to certain requirements), it may be exempt if it ONLY uses music from a broadcast service (television, radio, or cable television or satellite sources).

This article provides only a basic summary of the exemption, so a business should consult with an attorney before relying upon the exemption. For instance, the exemption doesn’t apply if the business charges admission, which might include cover charges. The exemption may not apply if the music is transmitted outside the business, and certain transmissions are exempt only if they are subject to Federal Communication Commission regulation.

Copyright law doesn’t apply to public domain music. Older classical music, such as Bach, Mozart, and Beethoven, won’t be subject to copyrights on the compositions. However, if the sound recording is newer and still under copyright protection, a license may still be required.

Obtain Required Licenses

Once I was advising a client on general business matters, someone mentioned the play list for an upcoming event for several dozen staff. I asked about the company’s music PPLs. The manager said he would amplify music from his cell phone streaming service, so they didn’t need a PPL. After I reminded the client that his license only covers his family and small family gatherings, he replied: “We all are one big family here, so we don’t need to worry about a license.”

Sadly, that attitude is all too common among businesses trying to eke out a profit. Music licensing is an expense that might not yield visible results, but it’s part of the cost of doing business. And, in the Cincinnati Symphony incident, some audience members defended the woman in the front row, claiming that the women verbally expressed respect for Ms. Mutter.

What the women in the front row at the Cincinnati Symphony performance and that business owner didn’t understand is that copyright law violations aren’t victimless. Failing to purchase a PPL harms the very musicians the listeners claim to respect. As Anne-Sophie Mutter said in an interview with Sharon Coolidge for the Cincinnati Enquirer, “As an artist, you take such care when doing a recording—that you have your own sound engineer, and the mics are hung in the right spots. The sound is a part of you, you want your voice replicated in a way that really represents what you have worked on for an entire life.”

This series draws from Elizabeth Whitman’s background in and passion for classical music to illustrate creative solutions for legal challenges experienced by businesses and real estate investors.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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