New faces are owning familiar places all across America. With thousands of bars, restaurants, and cafés closing since the onset of the pandemic, many of those establishments have begun to reopen under new management. While this is certainly a breath of fresh air for the majority of Americans, it is blood-in-the-water for the shakedown-sharks hoping to catch novice business owners in violation of music licensing laws (and to extract payment from them). 

While most seasoned business owners are aware of the potential liability that can arise from playing their own music, fledgling business owners are often unaware of the laws that govern playing your personal music in a business environment. With the sheer volume of new businesses popping up, shakedown-sharks are on the prowl hoping to catch a business in violation and earn themselves a payday at your expense. 

“Shake-down Sharks” are executives for Performance Right’s Organizations (PROs) who tour the country to ensure that the owners of songs are compensated when music is played in a commercial setting. Part of their job is entering into licensing deals with radio stations and larger venues, the other part of their job is walking into your small business to demand compensation for unlicensed music. 

Although you pay for a premium service, the vast majority of individual users have a “Consumer License” to listen to the music. So even though you are paying to stream the music you don’t own the rights to it, you are essentially leasing the music from the artists for your own private listening. Your Consumer License is perfectly fine for listening to in the car or hopping on the AUX at a party, even one with hundreds of people at it, but it does not grant you to “Publicly Perform” any of those songs you are leasing from the artists. 

Without getting too deep into the legal jargon, a Public Performance is any time you are playing music in an environment where money is changing hands (this is why professional DJs cost so much). U.S. Copyright Law is set up so that if someone is profiting off an Artist’s work, either directly or indirectly, that Artist (or most commonly, whoever owns the rights to the song) is entitled to be compensated. Although this can be good for Artists, it can also land a novice business owner in hot water if they are unaware of the need to compensate an Artist above-and-beyond the consumer streaming rates. 

Unfortunately, even though you “bought” the song/album from iTunes you still don’t technically “own” it. Instead, you purchased a license to play the song whenever you want privately forever. As such, even music purchased from a music store is not yours to publicly perform.  

Thankfully there are a number of options available for business owners who want to curate an audio-aesthetic without running afoul of Copyright Law. Popular services like Pandora, Apple Music, and Spotify (and others) have created a business-tier of music streaming services that automatically send the Artists the Public Performance Rate – insulating your business from potential liability while maintaining your ability to curate a particular vibe. 

If you are interested in learning more about insulating your business from a copyright shakedown, message us today.