Music Licensing

Exposing A Shocking Theft Committed Even by Successful Restaurateurs (Unknowingly)

Music Licensing

“Table for two?”

Your F&B outlet is open for business. It is dinner time – 7.00pm, the customers are starting to come.

Your manager adjusts his tie to look sharp.

Your waitresses lead the guests to their tables and seats them.

Your chefs in the kitchen are ready to prepare the first orders.

Ah, how could you have forgotten? You have just arranged a playlist of beautiful music on Spotify Premium earlier on. You plug your laptop into the amplifiers and delicately turn the volume knob up. You signal at your manager who is at the other end of the room. He gives you a thumbs up sign.

Perfect.

The customers are flocking in. No incidents so far. Just another good night for your business.

The glorious sight of a full-house restaurant on a bustling street. Pleasant and friendly waiters. Delicious food and drink. Excellent choice of background music. The customers look delighted with their chatter and laughter.

What could be wrong?

The music is being played illegally without a performance license.

What is a Performance License?

For the use of background music for commercial areas.

Performance License

“I have purchased this music CD from HMV, and these other tracks online from my Spotify membership. The music is not illegal downloaded; I can play it in my retail store legally.”

Although this statement might sound very logical, it is not true. Let’s examine Spotify’s terms and conditions for the normal user:

Rights we grant you

The Spotify Service and the Content are the property of Spotify or Spotify's licensors. We grant you a limited, non-exclusive, revocable license to make use of the Spotify Service, and a limited, non-exclusive, revocable license to make personal, non-commercial, entertainment use of the Content (the “license”). This license shall remain in effect until and unless terminated by you or Spotify. You promise and agree that you are using the Content for your own personal, non-commercial, entertainment use and that you will not redistribute or transfer the Spotify Service or the Content.

Thus, if you use Spotify (regardless Free or Premium), you are only authorized to use the music for personal enjoyment. If you play it in your business premises, you are committing an act of theft and copyright infringement. Only a performance license allows for the patrons the benefit of enjoying the music being played in public areas.

Most restaurateurs will overlook the wrongdoing. In our day-to-day conversations with them, there is something common among them - a lack of awareness about music licensing.

It is often overlooked due to prioritising other more urgent aspects of the restaurant. Restaurateurs should understand the implications of playing music without licensing. It is a criminal offence under the Singapore Copyright Law:

Playing music without license for commercial advantage is a form of copyright infringement, which can lead to a penalty of fine not exceeding $20,000 and/or imprisonment up to six months.

Furthermore, the fines that can be imposed by performance rights organizations can be backdated (!), based on how long you were playing the unauthorized music. The possibility of such hefty fines crippling your revenue is very real.

Mechanical License

For reproduction rights i.e. copying music into a CD/other digital storage platform for commercial distribution.

You have purchased performance licenses for various tracks, but want to compile them in a CD for a suitable playlist for your premises. There is a need to obtain a mechanical license, for the act of burning the tracks into the CD. Fees can be dependent on number of times it was reproduced or based on annual rate.

Blanket License

It would be a Herculean (near-impossible, actually) effort to contact the hundreds of copyright owners and to negotiate the performance and mechanical rights for each track.

Performance rights organizations and background music solution providers recognize this and offer a blanket license, which is a collective performance rights for their repertoire of music, usually charged at an annual fee.

In terms of convenience, businesses are increasingly turning to background music solution providers, as they have the ability to be a more well-rounded, one-stop audio solution (e.g. coverage of all licensing and providing catalogued playlists).

Why Do We Need Licensing?

Why need Music Licensing

How would you feel if someone used your work without permission and acknowledgement?

The philosophy of licensing is to basically reward, as fairly as possible, the composers and songwriters for their hard work in producing the music, that has provided potential value to your business.

Conclusion

The risks of hefty fines and bad publicity is remarkably undeserving of such minimal cost-cutting activity (or lack of music licensing awareness, which we are trying to stamp out). The increasing clampdown on copyright infringement should force restaurateurs to sit up and be vigilant about the music they play in their stores.

Do you have questions about music licensing? Let us know in the comments below and we will be very happy to advise.

If you have found this article to be informative and useful, do share it with your fellow restaurateur!

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