Playing Spotify music in your shop, bar or restaurant

25

More and more people recognize the importance and influence of background music in retail and gastronomy. At the same time, these are challenging times financially. The result is that many entrepreneurs turn to home-made solutions for their instore music. And why should they not? Nothing is as easy as creating a playlist in Spotify or iTunes and hooking it up to a sound system, right?

The problem is that playing music in a retail or gastronomy venue this way is illegal. Even when you have a Spotify premium account or play music that you have payed for and legally downloaded from iTunes. In fact, even playing your old CD’s is not allowed.

The problem lies with the mechanical rights. Mechanical rights are payed to allow someone to create and distribute copies of the music. (For my younger readers: copying music used to be a mechanical process, hence the term ‘mechanical rights’.) This is a costly affair and therefore music distributors only cover these rights for the intended audience; you.

When you play this music in a shop, you make commercial use of the works and distribute them to a larger audience. The mechanical rights that were payed for this music do not cover such usage.

I have contacted both Spotify and the Dutch rights handling organization Buma/Stemra but they both confirmed that there is no legal way to use Spotify in a commercial space. You cannot strike your own deal with the rights handling organizations to buy off the mechanical rights. So put simply: until Spotify decide to cover mechanical rights for both personal and commercial use, there is no way you can legally play music from a Spotify system in your retail or gastronomy enterprise.

One solution is to buy your music from a specialized retail music supplier. They cover the mechanical rights for commercial use and you can therefore play their music legally. Note that this can be the exact same music. Lady Gaga via Spotify = illegal. Lady Gaga via an instore music supplier = legal.

Mechanical rights are not the only rights you will be dealing with. You also face copyrights and performing rights when playing instore music. These dues cover the rights of the composer(s), producer, and musicians. Varying upon the country in which you are situated these might be calculated based upon the floor surface of your venue and the number of employees you have working there. These rights also apply to a simple radio you have playing in the background.

Now you might be thinking: “I have been playing music from Spotify on my phone in my shop for years and I have never payed any of these rights.” Legally, you are obligated to report your music usage to the rights handling organizations in your country. They will then charge you for your use.

So what if you don’t? Most rights handling organizations are quite active when it comes to auditing shops, bars and restaurants. When they discover you are playing music illegally you might be fined or charged an estimate of the dues you have evaded. This can be quite costly if they suspect you have been doing this for a long time.

The philosophy behind this is that when you play music in a commercial venue, you are using it to create a better experience for your personnel or clients. You are gaining from it, and therefore its creators should get a fair share. Whether the share is in fact fair, is a totally different debate.

When you buy music from an instore music supplier you will usually pay a subscription fee per month. Besides a custom, branded music channel this fee usually includes the mechanical rights. Since the copyrights and performing rights are based upon your specific venue you will have to take care of these yourself. When all these rights are properly taken care of, you can enjoy fully legal music in your commercial venue.

Another solution is to buy rights included or rights free music. This is music that is not registered with the rights handling authorities and you can therefore negotiate a fee with the owner. Many instore music providers will also offer this kind of music and it results in much lower costs, depending on the size of your venue. You will not pay any mechanical rights, copyrights or performing rights. Just the fee you agree with the supplier. And this is fully legal.

The downside is that this music is usually completely unknown. Michael Jackson, for instance, is registered with the rights handling organizations and you will therefore not be able to play his music rights included. Only music that is not registered can be offered this way. This means, no recognition, no hits. Whether this is a problem for your organization is another discussion, but it is a crucial factor to think about.

Although many rights included music libraries are of very poor quality, some better alternatives are emerging these days. Be sure to listen carefully before buying anything since quality varies strongly.

Effectively, you are not allowed to play music that was not intended for commercial use in your shop, bar or restaurant. So unfortunately, you cannot bring your personal music collection to work. Either get your music from a dedicated instore music supplier, or track down rights included music. And keep in mind that evading mechanical rights, copyrights or performing rights can be a costly affair! And if you use music to make more money, shouldn’t the artists behind that music gain a little too?

Leave a reply

25 comments

    • Thomas van Straaten 8 juli, 2015 at 13:36 Beantwoorden

      Hi Eduardo,
      Sorry for my very late reply! Your message somehow escaped my attention!
      Interesting product. I was not familiar with these, but it seems they have focussed purely on the hardware side of things. This does not change anything to the content rights story. My guess would be that they just enable you to broadcast whatever source you like, but it is up to you to make sure it is legal. I cannot see any way in which streaming an illegal source through this system would make it legal. I can imagine they also allow instore music providers to connect to the platform, in which case it would be a nice system. I also understand their perspective, as music rights legislation varies across the globe, they simply offer an “everything goes” technical solution and be done with it.

    • Thomas van Straaten 8 juli, 2015 at 13:30 Beantwoorden

      Hi Timo,
      Radio yes, since radio stations also pay for public broadcasting (Stemra, in the Netherlands). CD’s no, since they are only covered for personal use, just like Spotify. So if you want to make sure you are doing everything legally, you can choose between radio or a specialized retail music provider such as Mood Media. The costs are basically split in two: First, the source of the music (Spotify, radio station, CD publisher) pays for a specific kind of distribution rights. Usually either personal or public. This decides wether the material is allowed for only personal or public use. Then there is the user (in this case you) who does not have to pay for personal music consumption, but who is charged for commercially applying (eg. playing in your shop) the music. Complicated stuff!

  1. Veronica 29 juli, 2015 at 14:20 Beantwoorden

    Is it illegal to have a DJ make a mix and play that at a commercial space? Do all commercial spaces have to go through a music licensing company?

    • Thomas van Straaten 29 juli, 2015 at 14:35 Beantwoorden

      I am not 100% sure, but I suspect that it is not technically legal for a DJ to play in a shop without any particular arrangements. As in their daily jobs, DJ’s perform at clubs and festivals that make custom arrangements with the rights organizations. This means the DJ’s themselves are allowed to use music from their own private collection (not originally intended for public performance). The club or festival then pays a percentage of its gains. At the same time, suppliers of instore music and radio channels are required to pay for using commercial music in public applications, and so do the retailers themselves. So I suspect you would have to deliver the music through a professional retail supplier. But again, I am not entirely sure. I’d recommend giving your local rights authority a call about this (if you would be so kind as to share their answer here, that would be awesome!). As per your second question: in principle yes. The reasoning is that when you play music in a commercial setting, you are using that music for your commercial intentions and therefore need to license it.

  2. Justin 21 oktober, 2015 at 21:37 Beantwoorden

    But, how does Spotify know if you are playing music at a bar or restaurant? If you connect you’re phone to the in house system there is know way of knowing if its for a biz or your personally playlist (long as it may be)

  3. Don 15 december, 2015 at 14:08 Beantwoorden

    The music retailers say that because they do not have the authority to grant the license to play the music in public. That’s where ASCAP comes in. Public venues can use Spotify, SiriusXM, Pandora etc. if their PRO fees are paid.

    Those agreements say personal and non-commercial meaning you can’t buy and resell or distribute their product. They can’t tell you that you can’t play the music in public as a DJ, for example. Again, that’s where ASCAP comes in.

  4. Wookie 9 april, 2016 at 06:24 Beantwoorden

    This article is so far from correct. I work as a copywrite for the music industry. Music can be purchased on say amazon and played in a commercial setting, you just can’t copy and sell it. This guy is a nazi…

    • Thomas van Straaten 25 april, 2016 at 15:02 Beantwoorden

      Dear Wookie,
      Thanks for reaching out. As copyright law differs from one country to the next, and tends to be revisited every now and then, your point might be true for specific markets. However, for many markets, you definitely cannot play music that was cleared for personal use only. I know of markets where it is unofficially tolerated, but still illegal by law as well. So there is definitely some variety between markets. I have no commercial interests either way, just trying to be accurate here. Please note that there might also be differences between one time performances (such as DJ sets) and continuous playlists. Still, I do feel you might want to read up on some early 20th century European history. I think you will find the nazi’s weren’t in the business of trying to share insights on shopper marketing. They were actually quite evil. I assume you didn’t know, otherwise your comment would be quite rude and tasteless.

  5. Rodrigo 9 juni, 2016 at 05:27 Beantwoorden

    I got this answer from UK PPL….

    Hi Rodrigo,

    I’m afraid you wouldn’t be able to use music from Deezer / Spotify as their terms of service state the music is not to be used publically.

    We would advise you source your music from official vendors such as iTunes Amazon or Google Play.

    Please feel free to drop me an email if there’s anything else I can help with.

    Regards,

    Antony Kaleda
    Radio and Online Advisor

    PPL
    1 Upper James Street London W1F 9D

  6. jpkelly 28 juli, 2016 at 13:11 Beantwoorden

    Hello Thomas,

    What would the implications be If I were to stream live music from my Spotify playlist (or some other commercial site) directly to my free, non-subscription internet music station? My thought is that every time a song is played the artist would receive a stipend as it would be no different than just me listening to it. I want everyone to receive what they deserve and be legal. I’m in the U.S.

    Thank you!

  7. Jeff Sheerin 26 oktober, 2016 at 13:13 Beantwoorden

    This blog really hits the nail on the head in a variety of ways. When you’re running a small business, you typically don’t have hundreds to spend on a background/foreground music solution for your business – but you know how important music is to the experience at your business.

    That said, playing unlicensed music in your business is way too risky – it’s much safer to find a subscription-based music streaming solution like Mood Mix Pro that’s easy on your budget($30.00/month USD price range) that’s also licensed. Check out http://us.moodmedia.com/mood-mix-pro/ . It’s super affordable and the low monthly cost already includes licensing fees.

  8. Chezzer 18 november, 2016 at 09:22 Beantwoorden

    So my business already has a PRS and PPL music licence – can we play music from personal iTunes and Spotify accounts that we create or do we need something else? Finding this a minefield!

  9. Marika 2 april, 2017 at 15:58 Beantwoorden

    Like Chezzer, I’m confused. Our church has PRS and PPL licenses, and CCLI says that no licence is needed for music played during acts of worship. I understand from this that neither PRS nor PPL would therefore cover anything played during worship, only outside it like concerts.
    But I’d like to use Spotify during worship (a public performance) so I’d need to be covered by PRS or PPL!
    It’s not just a minefield; it seems an unresolvable conundrum!

  10. Ryan 24 april, 2017 at 16:25 Beantwoorden

    Music streaming services come in two forms—B2C (Business to Consumer) and B2B (Business to Business). The music streaming services offered by companies like Spotify, Apple Music, Tidal or Pandora, are all B2C, meaning they
    are licensed for private, non-commercial use (perfect to use at home with your friends & family).

    If you’re looking for a business music solution, you’ll need a Public Performance License (PPL) to openly play music to the public, including your customers and employees.

    The best and most cost-effective way to get licensed is to subscribe to a B2B music streaming solution who will handle all the licensing for you. Cloud Cover Music is just $17.95/mo, and they supply you with blanket PPLs for ASCAP, BMI, and SESAC. For other common licensing questions on music for your business, I’d recommend checking out this comprehensive Q&A article: https://cloudcovermusic.com/blog/licensing-questions-legal-business-music/

  11. Stuart 26 april, 2017 at 15:59 Beantwoorden

    Hi, am I correct in saying that the music fees described above in your posts are only applicable to establishments which can make more money when the music is playing? For example, a bar, restaurant, retail shop, may entice a customer with the music playing and that customer may spend more money as a result of the music playing. What about establishments in which all the money has already changed hands? I am about to open a language school in France and all course fees will be paid in advance – there is nothing to ‘buy’ while the music plays. I’m trying to contact SACEM about this but my French language skills need some work beforehand. Any advice would be appreciated.

  12. Intars Kirhners 14 mei, 2017 at 22:28 Beantwoorden

    Can you play just a fragments of music? like 30 seconds or 1 minute. for example music quiz? do you need license? or dj license?

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