Hmmm…I better stop quietly singing that catchy song that’s stuck in my head whenever I’m out in public! 
By contrast, that’s not true in the UK. Playing music in the workplace for staff requires a license from the Performing Rights Society, even if you’re just playing Radio 3.
ASCAP, BMI, SESAC, and GMR issue licenses and collect royalties for performances of musical compositions.
SoundExchange is different. It issues licenses and collects royalties for performances of sound recordings.
I touched on this before, and it has been mentioned by other posters, but when you publicly perform a sound recording, you are performing at least two creative works—the sound recording itself, and the underlying musical composition.
So, for example, say you have a musical composition, “This Year’s Hit Song,” which was written by Stu Songwriter who transfers his composition copyrights to an entity called Stu’s Music Publishing Co. Stu’s Music Publishing Co. is a member of ASCAP. And say a performer called Peter Performer records a performance released by Swell Guy Record Co., which holds the sound recording rights.
When WWWW-FM Springfield plays “This Year’s Hit Song” over the air, it has to pay composition royalties to Stu Songwriter/Stu’s Music Publishing, but not to Peter Performer/Swell Guy Record. So it pays ASCAP, which forwards the appropriate royalties to Stu Songwriter/Stu’s Music Publishing. But when WWWW-FM Springfield webcasts “This Year’s Hit Song,” it owes royalties to both Stu Songwriter/Stu’s Music Publishing (which it pays through its ASCAP license) and to Peter Performer/Swell Guy Record (which it pays through its SoundExchange license.
I alluded to this in a prior post. The law is called the Hatch-Goodlatte Music Modernization Act of 2018. It does a handful of things—one I mentioned before was to create a royalty requirement for pre-1972 sound recordings for digital music services (like Pandora Radio and Sirius XM), which up to now weren’t covered by federal copyright law. This came about as a result by owners of oldies sound recordings, like the Turtles (“Happy Together”), who have been suing Pandora Music and Sirius XM for royalties. This part of the MMA settles this legal issue.
The biggest part of the MMA is to create a new music royalty organization for composers. ASCAP, BMI, SESAC, and GMR collect royalties on behalf of composers/music publishers, but for performances. Interactive digital music services like Spotify (as opposed to noninteractive services like Pandora Radio) are not just performing. They are also creating and distributing phonorecords. They are phonorecords in digital form as opposed to physical media (compact discs, cassette tapes, vinyl records, etc.), but they are treated as phonorecords all the same. To make and distribute phonorecords, you don’t need a performance license, you need a mechanical license, a royalty requirement created in the days of player piano rolls.
Before digital interactive streaming, a company choosing to make and distribute phonorecords would go to each individual music composition rights holder and get a mechanical license directly. This happened at a scale that no blanket mechanical licensing entity was necessary. But Spotify and other streamers are making phonorecords at a scale that it’s no longer practical for them to obtain individual licenses from composition rights holders. They were getting tied up in a series of lawsuits by composers and music publishing companies. So this new licensing entity—once it’s established—will offer blanket mechanical licenses to Spotify and similar services in the same way that ASCAP, BMI, SESAC, and GMR offer blanket performance licenses to radio stations, bars, restaurants, etc.
No wonder, because good songwriters are few and far between. I certainly can’t do it, though I can play.
Back in the day when most bands started out playing covers, did the bars and clubs use to get away with it more routinely?
ASCAP has been around since 1914, well before electronic media was commonplace. So I’m guessing live performance venues were practically their sole focus. Perhaps they concentrated more in big cities back then.
And the PRS are pretty damn active too.
If you’re a self employed consultant, one of the tax efficient ways to do this is to become a Limited Company, which I did. One of the consequences of doing so was that I got both a letter and phonecall from the PRS to check if I was a company which allowed staff to listen to the radio.
FWIW I think I’m right in saying that there is an exemption in the UK for single occupancy offices because then you’re considered to be just listening to the radio rather than it being broadcast to the workforce. Not that I ever did.
j
I’m not sure that’s a contrast. I believe under American law, the staff of an office can also be considered the public. If you’ve just got a radio playing on your own desk that mostly just you can hear, that’s not public, but I believe something more than that can be a public performance.
This “playing the radio in a business” thing has me puzzled, I thought radio was ad-supported and the radio station has paid for the rights to broadcast. From then on it’s free for anyone to receive. Why would a business not have the right to play that broadcast but someone could play that broadcast in their home?
What if you own a company that sends out work vans, can they listen to the radio if there is only one person in the van? How about 2, 3, 4, or more? How many people before it’s consider a “public performance?”
I’m wondering if perhaps the difference for offices is not so much who can hear it, but who is playing it and how. By that, I mean there’s a difference between 1) I’m playing a radio on my desk that the person in the cubicle behind me/desk next to me/the other two people in the three-person office can also hear and 2) My employer or the building is playing music over speakers that everyone in the block-long building can hear. I’m sure a license is needed for 2, but I’m not so sure that 1 requires a license even if those near me can hear it.
Because public performance of a musical work is among the exclusive rights of the owner of the copyright in a musical work.
The radio station has paid for a license so it has permission to publicly perform the work. That license does not applyto the person who is listening to the radio.
A person listening to the radio at home is definitely not public performance. Playing music in a place of business might be. That’s the difference.
Section 101 of the Copyright Act —
Great posts from you on this subject. Thank you.
Here’s another question: How about wedding DJs? Is a private wedding considered public for licensing purposes? If so, who is on the hook for the fines? Similarly, members and guests-only country clubs?
I assume in those earliest days, the question was whether the performers had bought the sheet music.
I’m curious if someone has ballpark figures in how much a license costs if someone was planning on opening a bar or if there is a resource on online to help estimate how much someone would have to budget. Are we talking hundreds or thousands a dollars a year?
this also applies to videos
if you see anyone playing the music rhythm video games on you tube they have to use the generic company made mixes ….
if fact Nintendo when it made donkey konga and wii music used only public domain stuff and was destroyed for it ….
that was supposed to say… if you see anyone playing the music rhythm video games on you tube they have to use the generic company made mixes ….because its considered a “performance”
I would think so, yes.
As I said before, usually the venue operator is responsible for the licenses, but the deejay might be on the hook if there’s no valid license.
Yes, I believe so.
ASCAP and the other PROs are performance rights organizations. They only license performances. A performance is a performance regardless of whether sheet music is being used.
Making copies of an distributing copies of sheet music is a separate right, and so far as I know there’s no blanket licensing organization for that. The music publishing companies would have to go after you individually if you are making and/or distributing unauthorized copies of the sheet music.
“Good” is to some extent in the ear of the beholder. Equally important for pulling crowds is that the songs be familiar. Audiences interested in hearing unknown songwriters are much harder to gather than people who want to hear songs they already know.
This is a great thread.
Here’s my question. What about an established act performing a cover in concert? Say Hit Heartthrob plays football stadiums all across the country and decides to end each show covering a Beatles song for the encore. Who’s on the hook for the license? The artist? Each stadium? The tour promoter?
When I think about it, stadiums probably already have a license to cover PA music, player intro’s, “Sweet Caroline”, “Take Me Out to the Ballgame” etc.
But what about say a festival where they close off streets or fence off part of what is normally a public park where the venue is temporary and most likely has no license?
As I said before, it’s generally the venue host’s responsibility to ensure that the proper performance licenses are maintained. If it’s a concert tour, then each concert stage, bar, theater, arena, whatever, is responsible for being licensed. If it’s a public park, then the municipal parks department is responsible. They may not want to pay for it, so the performers or whatever organization is putting on the event should work out with the parks department how the licenses are going to be acquired and paid.
Oddly, here in the Nashville-Music-City-USA area…this gets abused.
A lot.