Muzak usually requires a dedicated closed system, i.e. it will only play proprietary media to which the royalty costs for the music are included.
As far as playing radio or live music in any location, I suspect it depends on the purpose of what’s being played. If it’s to draw in customers, ASCAP will be interested in getting the artists share via royalties. This was likely the case with the open stage bar that was fined.
Here’s some answers from the ASCAP site about licenses:
TL;DR version: In general, businesses need to pay for an ASCAP license or they’re subject to being fined.
"What does ASCAP mean by “general licensee?”
“General licensee” is an umbrella term referring to the hundreds of thousands of bars, restaurants, hotels, ice and roller skating rinks, theme parks and other businesses we license that are not TV, radio or new media broadcasters. There are many different ASCAP licenses available for the many types of general licensees. You can read more specifics at www.ascap.com/licensing
Why should a business have to pay to play music in public?
We often use the expression “They’re playing our song,” not always remembering that while we may have emotionally adopted the song, it still legally belongs to the songwriter who created it, and the music publisher who markets it. When you use other people’s property, you need to ask permission. An ASCAP license gives a music user simple, affordable access to the more than 11.5 works in the ASCAP repertory.
Do business owners need to pay a fee if they’re only playing recorded music like CDs, radio or TV?
In general, yes. Whether it’s live or recorded, music is used by business owners to attract customers, and its creators have a legal right to be compensated. There are a few exceptions, depending on the size of the establishment and whether it charges an admission fee. For example, a food service or drinking establishment is exempt from licensing for radio or TV music uses if it has no more than 3750 gross square feet of space. Licensees can discuss their specific situation by contacting a local ASCAP licensing manager."