Companies can leverage music as an important part of their business strategy. Played in the background, music creates ambience, reinforces brand’s posture, and increases sales by making a psychological impact in the minds of people. Due to the very same reason, marketing and sales teams utilize music as a way to attract and engage colleagues and prospects.
However, music is protected by copyright law, which provides exclusive rights to copyright owners to perform or play their songs. So, businesses have to fulfill licensing requirements for using music in presentations and videos. Violating the copyright law of music can attract damages ranging from several hundred dollars to several hundred thousand dollars.
If you are planning to use popular music or production music in marketing, sales and other corporate communications, it is critical to know licensing laws and avoid unsavory fines. Sometimes music rights get a little bit complicated. There could be a number of different licenses required for one piece of music to make it seem like a single use. For instance, a company can play a song for an audience, but a synchronization (“sync”) license is required to set the song to a visual work such as a movie. Although you are well aware about synchronization rights, but not every employee of yours knows the legal requirements. Employees often add music from their own phones or the web to PowerPoint presentations or videos, not realizing their actions may be infringing on copyrights.
Music Laws and Ways to Obtain A License
The most common option chosen by businesses is the direct licensing route. This is when businesses get a BMI or ASCAP license and manage the music themselves.
BMI – Broadcast Music, Inc. is a body that controls the music rights management. It was founded in 1939 by forward-thinkers who wanted to represent songwriters in emerging genres, like jazz, blues and country, and protect the public performances of their music.
ASCAP – acronym for the American Society of Composers, Authors and Publishers (ASCAP) is a membership organization that operates on a not-for-profit basis of more than 670,000 songwriters, composers and music publishers of every kind of music from all 50 states and beyond.
SESAC – originally the Society of European Stage Authors and Composers represents the world’s top songwriters, composers and music publishers. It collects license fees on behalf of songwriters, composers, and music publishers and distributes them as royalties.
SoundExchange – it is the independent nonprofit collective management organization that collects and distributes digital performance royalties to featured artists and copyright holders.
All of the above bodies are collectively called as Performing Rights Organizations (PROs). Music streaming services are either B2C or B2B. Services offered by companies like Spotify, Apple Music, and Pandora are all developed for customers, not businesses. This means these services are licensed for private, non-commercial use. Hence, you need a Public Performance License (PPL) to play music in public places, including your customers and employees.
It is also important to note that obtaining a license from one PRO doesn’t necessarily mean the job is done and you are all clear. It may mean you only got a license for that PRO’s copyright holders. For instance, the composer of a song may be represented by ASCAP, while the lyricist may be with SESAC. To address this issue, you can avail a “blanket license” from each of the PROs if you want music streaming for your business. A blanket license is a flat fee license paid annually by the establishment instead of tracking and paying a fee per song that is played.
How To Avoid Fines For Streaming Music
1- Use royalty free music rather than paying BMI and ASCAP fees
If you want to keep your expenses low and save your budget, you can play royalty-free music in your business. Although this solution can help you avoid paying the PROs, but it may likely result in obtaining a limited variety of songs. If you choose to go this way, make sure you checked the music really is in public domain. This music is also often used by filmmakers who can’t afford hefty license fees. It should be noted that some music that’s listed as royalty-free needs an upfront fee from the creators. Thus you have to tick all the boxes to ensure that the music is really royalty-free. If you fail to do this, you might find yourself in a lawsuit with the PROs.
2- Involve in direct licensing with independent musicians
Getting a direct license from independent musicians is highly effective way for businesses to build relationships within the music industry. It may well be time consuming, but could be in the best interest of small businesses to feature local artists. Doing so will help you strengthen your stance on supporting the local community. Therefore, individual local artists may be willing to waive any royalties or accept a small payout for the exposure. As long as you have the permission of the composer, you don’t have to pay a performing rights society.
3- Use a music subscription service
Music services for businesses can be a constructive way for simplifying the entire process by offering a fully licensed catalogue of music in quite affordable rates. In addition to that, these services can also help you customize the music selection to find the best songs to reinforce your brands personality.
4- Negotiate the licenses
Another way to avoid fines or hefty prices is get a professional help and negotiate the licenses. The amount you pay for a license is negotiable, just like any other license. In order to calculate the closing rates, you should convince the PRO to consider the type of business you’re in. Ask them to factor in the square footage of your property; how often the music is played and the amount of consumer traffic you get. The fact is PROs are more willing to work with you if you’re proactive in securing a license.
Among many factors, music also plays a vital role in attracting customers and driving revenue. So while creating your marketing and sales game plans, you can use music as a tactical as well as strategic tool to draw customers in. However, you need to obtain proper licensing if you want to save money and avoid fines.