People always ask ChromeOrange Music's licensing team, "Can I legally play music from streaming services like Spotify and Pandora (and similar) as background music in my business?" The simple answer is no. And as much as most people think the reason is complicated, it's actually pretty simple.
To get to the answer, we're going to take you back in time to 1913—the year ASCAP (American Society of Composers, Authors and Publishers) was formed. It all came about after a small group of songwriters (which included Victor Herbert) and music publishing executives dined at Shanley's Restaurant in New York City. Back in 1913, radio and television didn't yet exist—at leas not for public consumption. So, the main form of evening entertainment was something known as "dinner dancing." You went out to dinner, and you also danced to the music of a live orchestra or band. (Think Ricky Riccardo at the Tropicana on the 50's TV show I Love Lucy.)
As Herbert and his entourage dined at Shanley's that evening, they heard many of their songs being played by the live orchestra that Shanley's had hired to play music. As the waiter handed Herbert a staggering check, Herbert told him, "You've charged me for every item on the menu, apparently, and I am paying the bill? But how much are you paying me for playing my compositions?"
The answer, of course, was "nothing." Everyone else made money that evening—the restaurant was paid for dinners and drinks, the wait staff was paid to serve customers, the chefs were paid to cook the food and the busboys were paid to clean up the tables after customers departed.
And the orchestra was paid to play the music to which customers danced.
The only people who weren't paid were Herbert and other songwriters and music publishers whose songs were performed by the orchestra and danced to by the restaurant's customers.
Following that evening, the very same songwriters and music publishers got together with a few of their colleagues and decided that it was time for music users to pay the people who created and owned the music. The problem is that performance licensing didn't yet exist. So there was no way for this group of songwriters and music publishers to enforce their demands.
As such, Shanley's promptly refused to comply.
In 1914, there was a second ASCAP meeting. This time, 100 persons from the music industry (songwriters, composers and publishers) were in attendance. They decided to sue Shanley's.
The Turning Point: The 1917 U.S. Supreme Court Decision
To make a long story short, the case went all the way to the Supreme Court in 1917, and Chief Justice Oliver Wendall Holmes articulated the court's decision.
To paraphrase, Holmes opined that when music is played in a business establishment like a restaurant, it is played to entertain customers. Without music, customers might not stay as long in the establishment nor spend as much money in the establishment as they normally do when music is being played. In other words, the music serves as entertainment that makes people stay longer in a business establishment.
As such, Holmes opined that the composers of the music and their music publishers must be compensated for the use of their music and a formal written license must be obtained from the composer and publisher. And thus the concept of a performance license license came to life and became a copyright law requirement.
Now, some people ask us about playing a radio in a business establishment. (Because radio stations are, after all, already licensed to play music over the airwaves.) And so, what's the big deal if a store or a restaurant plays the radio to entertain customers?
The difference is that radio is licensed as a broadcast public performance limited to the public airways. That's a vastly different scenario than the performance of music in a restaurant, bar, store, or any other public place that is not a radio station.
Again, to paraphrase Justice Oliver Wendall Holmes, music played in a public place is meant to entertain customers so they stay longer and spend more money in the business establishment. You simply can't do that without a license because, as of the 1917 U.S. Supreme Court decision, all public performances of music must be licensed.
The Music Modernization Act
In 2018, we saw the passage of the Music Modernization Act, which extended public performance protection to copyright owners with respect to internet- and satellite-based performances of their music. The MMA filled in the gaps left behind by its predecessor, the Digital Millennial Copyright Act.
So, to answer your question, no. If you do not have a license, you cannot stream Spotify, Apple Music, Tidal, SiriusXM or Pandora playlists as background music in your business establishment.
ChromeOrange Music is a New York-based record label and music publishing company with a catalog of original music for film, television, video games, internet and broadcast advertising, print and other music licensing applications. Our music has been licensed in over two dozen countries and on television networks like National Geographic, CNN and Telemundo. Please visit our Music Catalog page to access clips of music that span a wide range of genres and moods.
For more information about music licensing, call us at (631) 648-7446 or use the form on our Contact page to send us a message.