Do I have to pay BMI, ASCAP and SESAC?

What is a performing rights organization?

A performing rights organization (PRO) works on behalf of music creators such as songwriters, producers, recording artists and publishers to make sure they're paid for their work when it's used publicly — for example, in your business space. PROs charge licensing fees, which, when paid, authorize you to play music by the music creators those PROs represent.

The main PROs in the United States and Canada are the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), Global Music Rights (GMR), the Society of Composers, Authors and Music Publishers of Canada (SOCAN) and Re:Sound.

Soundtrack (formerly Spotify for Business) licenses the rights directly from PROs, as well as manages playlists and content to avoid any music that isn't licensed. Our systems track and enable payment to music creators each time a track is played — which means that the artists you play are the ones who get paid.

In the United States, your Soundtrack plan includes the licenses for ASCAP, BMI and GMR. Soundtrack does not include any music from SESAC, so this license is not needed. In Canada, SOCAN and Re:Sound licenses are included with Soundtrack.

Differences between ASCAP, BMI, SESAC and GMR

In some countries, local copyright laws allow for multiple performing rights organizations (PROs) to exist alongside one another. Despite this, most markets tend to only have a couple of PROs where music creators align their work with older organizations that have well-established resources.

The American PRO landscape is unique with at least six organizations:

• AllTrack

  • Founded: 2019

  • Members: Unknown

  • Catalog: Unknown

• ASCAP

  • Founded: 1914

  • Members: 1.1 million music creators

  • Catalog: 11.5 million musical works

• BMI

  • Founded: 1939

  • Members: 1.4 million music creators

  • Catalog: 22.4 million musical works

• GMR

  • Founded: 2013

  • Members: 200

  • Catalog: 123,000 musical works

• Pro Music Rights

  • Founded: 2018

  • Members: Unknown

  • Catalog: 2.5 million musical works

• SESAC

  • Founded: 1932

  • Members: 15,000 music creators

  • Catalog: 1.5 million musical works

With a highly competitive performing rights market, playing music in a US-based business means getting licenses from each individual PRO. Each PRO has its own unique music catalog (often referred to as a repertoire) and the ownership of many compositions and sound recordings are split across multiple PROs. This means that a business looking to play music on-site would potentially need to get licenses from each and every American PRO depending on what songs it uses.

ASCAP vs BMI

ASCAP and BMI are two of the largest (and oldest) performing rights organizations in the United States. The sizes of their membership and musical repertoire dwarf those of the remaining four PROs, although they differ in their organizational structure and what they offer their members. Let's take a closer look at the two.

BMI is the largest PRO in the United States. Founded in 1939, BMI has over 1.4 million members with a musical repertoire of more than 22.4 million songs. BMI is a non-profit organization and lets songwriters sign up with a two-year contract at no cost (publishers do pay a fee when signing their five-year contracts, however). Music licenses for business use are available from BMI: a prospective business just needs to fill out a contact form and wait for a BMI representative to contact them.

ASCAP is the second-largest PRO in the United States. It is the oldest of the American PROs, dating back to 1914. ASCAP boasts a membership count of 1.1 million members contributing 11.5 million tracks to their repertoire. Like BMI, ASCAP is also a non-profit organization. Unlike BMI, ASCAP has an application fee but charges no recurring membership fees. Businesses in need of a music license can fill out the contact form on the ASCAP website and await contact from their team.

SESAC and GMR explained

Outside of ASCAP and BMI, two of the more prominent performing rights organizations in the United States are SESAC and GMR. While both of these PROs are perhaps more niche in terms of their offering, they also maintain repertoires that are interesting to businesses looking to use their music.

SESAC differs from the bigger American PROs in a few ways. A for-profit organization, songwriters and publishers can only join SESAC by invitation. SESAC's approach results in a smaller membership count (15,000) and repertoire (1.5 million songs), but they maintain a diverse music catalog. Music licenses from SESAC are available directly from their website.

GMR is one of the newest PROs in the United States after being founded in 2013. Like SESAC, GMR is a for-profit organization with a very small membership base in the hundreds. Despite the small repertoire, GMR positions itself as somewhat of a boutique PRO with a curated number of popular artists. Businesses interested in getting a music license from GMR can request information via the contact form of their website.

Why do I need music licenses for my business? What happens if I don't have them?

Just as you pay for the lighting and décor you use in your retail store, coffee shop, restaurant, bar, hotel or other business, it's only fair that you should also pay music creators for their contributions to your atmosphere and ambience.

Not meeting music licensing requirements can mean that you've infringed upon copyright laws. This can make you liable for heavy fines and put you at risk of a lawsuit. These costs often lead to businesses shutting down for good and/or being permanently banned from using music by music creators represented by the PRO taking legal action.

PROs such as ASCAP and BMI have been known to pursue lawsuits against businesses that don't comply. In 2024, for instance, ASCAP issued a press release about 13 businesses it was taking action against.

And those aren't the only real world examples: In 2023, The Blue Moose Bar & Grill in the American city of Topeka was sued for two songs they played without the appropriate ASCAP licensing after an audit. In addition to being required to pay the money sought in the suit — as well as ASCAP's legal fees —  the Kansas restaurant was also banned from ever playing ASCAP music again.

And after Tadpoles in Tampa let its BMI licensing lapse, the PRO sent undercover music researchers to audit. The bar was forced to close its doors after BMI hit them with a hefty US$30,000 fine.

The consequences of using unlicensed music in your business go beyond just legal action. PRO audits like these often make the news, which can damage a business's reputation among customers and other business relationships. Legal action against a business could also result in retroactive licensing fee payments, causing extra strain on the balance sheet.

How much does a music license cost?

Paying PROs such as ASCAP and BMI means you're purchasing the right to play a certain selection of music. It also covers the right to perform music for your customers.

Each organization sets their own rates for music licenses. There are many variables that can affect licensing costs, including:

• The type of business

• The size of your business's premises

• The number of staff

• The number of customers

• How you play the music

• How many speakers are used

• Whether the music is played outside

• Whether your business hosts events

• Whether your business hosts live music

While there are plenty of factors that come into play, music licensing fees are ultimately determined by business characteristics rather than the music you choose to play.

It's important to note that many of the songs by music creators covered by one PRO will not be available from other PROs. If you obtain a blanket license from only one PRO, you won't be able to play songs that aren't under its umbrella. This means that if you want to play a range of fully licensed music in your business, you'll need licenses from multiple PROs. This can get expensive — but not as expensive as a lawsuit.

How music licensing interacts with other music rights

When it comes to playing music in a public setting, there are three types of rights involved:

• Recording rights, which allows you to play a specific recording of a song

• Publishing rights, which allows you to play the original composition

• Public performance rights, which allows you to play the song in a public environment

These are not the only kinds of rights relating to music, though. You may have also heard of other forms of rights like mechanical rights and synchronization rights, and all of these generate royalties for rights holders. Where do these rights fit into the music licensing landscape and does your business need to be concerned with them?

Public performance vs mechanical rights

Mechanical rights refer to someone's ability to reproduce a musical composition. To put it plainly, if a band wants to perform a cover song for their studio album, then they need to get a mechanical music license that allows them to do so. This requires getting approval from the owner of the composition (usually a songwriter or their publishing company) as well as the master sound recording (usually a record label).

Mechanical rights are not a relevant concern for playing music in your business.

Synchronization rights and video usage

Synchronization rights refer to someone's ability to sync up a sound recording with another form of media. Examples of this include syncing music with a commercial, TV show, feature film or video game. Just like mechanical rights, one would need sync rights from both the owner of the composition as well as the owner of the master sound recording.

Synchronization rights are also not a relevant concern for playing music in your business.

How your business can simplify licensing with a single solution

The world of music licensing is as clear as mud. Thankfully, sorting out licensed music for your business doesn't have to be rocket science. There are plenty of business music streaming platforms, and the best ones try to remove as many of the licensing hurdles as possible for their customers.

Using a business music streaming service means reducing the administrative burden for playing music on-site. Instead of getting licenses directly from BMI or ASCAP, a single streaming solution like Soundtrack can bundle up all the music licenses you need for your US-based business.

Again, licensing requirements vary depending on what country you're in, so double-check your local rules before you start playing music.

What licenses does my Soundtrack plan include?

Soundtrack is available in 73 different countries around the world. While each country has its own unique music licensing setup, some things remain the same. When you join Soundtrack, two out of three licenses are always included, no matter where you are in the world. These licenses are for the recording and publishing rights.

No matter where you operate, it's vital to always check that you’re correctly licensed. In most cases, you'll only need to source your public performance licenses. However, if you're in the United States or Canada, these are also included with your Soundtrack plan, which can mean a significant reduction in outgoing costs. It’s estimated that Soundtrack can save a business between 21% and 90% of music licensing costs compared to purchasing each license directly from a PRO.

It's also important to note that personal music services such as Spotify, Apple Music, Pandora, SiriusXM, iTunes, YouTube, Amazon Music and TIDAL are not approved for use in businesses. They are not meant to be played in any commercial space to entertain customers, so any business using these music platforms is most likely breaking the terms and conditions of these services. Soundtrack is the safer way to play.

Soundtrack's music catalog includes songs from some of the biggest American PROs. Forget about paying ASCAP and BMI separately: sign up for Soundtrack today and start with a free 14-day trial.