What is a public performance license?

In a public setting like your business, you need to be licensed to play any music you don't personally own the copyright for. That means your business needs public performance licenses that grant you permission to play music in a public place, which ensures your business is compliant with copyright law.

Below, we'll take a deep dive into public performance licenses, which are permits for playing music in a public place. Read on to learn what public performance licenses are, where you can play music publicly, how your business can get licensed, why your business needs them and how much they cost. Soundtrack covers public performance licenses for our customers in Canada and the United States.

What exactly is a public performance?

In the world of music licensing, a public performance is any time when copyrighted music is played in a public space or commercial establishment. This includes: streaming recorded music over a sound system; playing music from a jukebox, radio station or TV channel; hosting karaoke; and having live performances of copyrighted music, including cover bands and DJs.

What is a public space, then? A public space means places like shops, cafés, gyms, public parks and events: really, it's any place where music is audible beyond a private setting like a home. Listening to music through your headphones (even if it's in a public place) or playing music on your home stereo are distinctly private performances for your own ears only. This isn't to say that it's illegal to play music out loud in public, but there are rules if you're using music for more than your own personal enjoyment.

A public performance license is a formal agreement with the owners of a copyrighted musical composition that allows the license holder, such as a business owner, to play the composition publicly. How these licenses work varies from country to country, but the general idea of public performances remains the same across the globe.

Where can you legally play music in public?

The rules for playing music in public vary from country to country, but a few things apply anywhere. When it comes to music licensing, a public performance is one where the music is playing for more than just your own personal enjoyment.

Here are some examples of public settings in the context of playing music:

• An outdoor place like a park, square or beach

• An indoor space like a store, restaurant, lobby, gym or office

• A semi-public setting like an event at a members-only venue

Outdoor spaces are trickier to clarify. In some countries, a business may need a supplemental public performance license that covers outdoor usage (e.g., for outdoor seating at a restaurant) in addition to their base license for indoor usage. In others, outdoor spaces where music is audible may just be a variable included in the calculation of licensing costs.

As always, the laws for playing music in public differ depending on the location of your business. Check with your local performing rights organization for more details.

Why does your business need a public performance license?

In order to play music legally in your business, a business must purchase public performance rights from a performing rights organization. Businesses that play music without the correct music licenses may violate copyright law and risk legal action.

Many business owners make the mistake of not obtaining the correct licenses for the music they play. Unfortunately, ignorance of the rules doesn't exempt your business from them. Auditing is a real possibility, which means that taking your chances is not worth the risk. Unlicensed music use can result in heavy fines or lawsuits that can force a business to shut its doors.

But what does unlicensed music use in public look like? One of the most common mistakes is using Spotify in your business, which violates Spotify's terms of service. Other music streaming services made for personal use also cannot be used in a business setting.

For a business playing music on-site, there are three relevant types of rights involved:

• Recording rights allow you to stream a specific sound recording of a song. Getting licenses for these rights is the responsibility of the streaming service.

• Publishing rights allow you to stream the original composition. Getting licenses for these rights is also the responsibility of the streaming service.

• Public performance rights allow you to stream the song in a public environment. Getting licenses for these rights is the responsibility of your business.

How can you get a public performance license for your business?

There are many organizations around the world that handle music royalties. These are called PROs and CMOs. A PRO is a performing rights organization, and a CMO is a collective management organization. Both track usage and collect royalties on behalf of music creators. The difference is that PROs manage only performance royalties, whereas CMOs also collect royalties for the reproduction of music.

A business needs to contact the relevant PROs and/or CMOs in the countries where it operates in order to set up the necessary public performance license for playing music in public.

How you obtain a public performance license varies depending on what country your business is in. In some countries, you need to obtain public performance licenses from each individual PRO, while others have a simplified process where multiple PROs use a single platform for selling licenses. Most licenses are available for purchase online after providing some details about your business and intended usage, which help determine the license cost.

Some music streaming services, like Soundtrack in Canada and the United States, even offer subscriptions with public performance licenses built into the plan.

It's often the case that multiple licenses are required, and there are a couple of reasons for this. One reason is that some PROs have additional licenses for special use cases. Some examples of this include exercise classes, events with paid entry or karaoke. Check with your local PROs for more information on whether or not this applies to your business.

Another reason is that it's quite common for one song to be written by multiple music creators who are represented by different organizations. For example, if you want to play music by Post Malone, Global Music Rights (GMR) covers only a percentage of the rights to each of his hit songs. To play any of these tracks, you would need to secure public performance licenses with all relevant PROs or CMOs.

How much does a public performance license cost?

Just like every other aspect of public performance licenses, costs also vary depending on what country your business is in.

PROs use different aspects of your business to determine the license cost, including business type, business size, floor area or opening hours. Your license costs may also increase if you plan on playing music outdoors or host events like live music, fitness classes or karaoke.

There are some business music streaming services that include public performance rights. Soundtrack provides the public performance licenses required for American and Canadian customers, which means your business only pays for the licenses of the music catalog that we provide you with.

As you can see, it's difficult to give general cost ranges for public performance licenses because of the amount of variables involved. Many PROs have an online form where you can enter some details about your business in order to see an estimated price. Most public performance licenses are invoiced monthly or annually depending on the PRO.

What licenses are included with Soundtrack?

Soundtrack is a music streaming service built for business use, and that includes licensing. All of our plans cover recording rights and publishing rights.

For American and Canadian businesses, Soundtrack plans also include public performance licenses, so it's easy to get started. If your business is located elsewhere, you need to get public performance licenses yourself before playing music. Sorting out your licenses doesn't need to be difficult, though: our country guides for music licensing have all the information you need to get licensed from your local PROs, which will save you time on researching local regulations.