69% of business owners lack public performing licenses to use content and risk high fines, study finds

Based on a study by Cloud Cover Music, most business owners are unaware they need a public performing license (PPL) and risk up to $150,000 in fines if they are caught playing music without it

                            69% of business owners lack public performing licenses to use content and risk high fines, study finds
(Getty Images)

Streaming has become the norm for most music-lovers these days. Services like TIDAL, Spotify, and Amazon among many others are making music accessible to much wider audiences worldwide, and many buyers are opting to buy digital copies of their favourite songs and albums as opposed to investing in physical products.

Digital music is cheaper and takes a lot less space, after all. Not to mention, you receive it instantly without having to wait on delivery, and you can take it with you wherever you go - provided you have a device to load it on to, of course. In the age of smartphones, that's hardly a pressing issue.

But music-lovers and fans are not the only ones accessing music via streaming services nowadays. Business owners are too.  Especially small business owners, such as start-ups and content creators. And that presents a new problem - one of licensing and copyright.

The term 'copyright strike' has been used so much by content creators that it has become a colloquial. But for many who face the issue, it's a concept that's a little difficult to understand.

As YouTube became increasingly popular as the main platform that creators were using to showcase their talents and market themselves, more and more channels were finding themselves temporarily or permanently blocked on account of the platform's copyright policies. The policy exists to ensure that users do not infringe on any copyrights and is based on rules set out by the Digital Millennium Copyright Act. The platform has frequently come under criticism from users however, who find that it uses the copyright strikes to take down videos and channels that seemingly complied with what constitutes 'fair use', which is the concept that anyone is allowed to reproduce copyrighted material without obtaining permission or paying royalties as long as it falls under the purposes of review, news reporting, teaching, or scholarly research. Fair use also states you are allowed to use a small portion of a copyrighted piece of work, however, there is no specific guideline as to what constitutes a 'small portion'.

Additionally, fair use dictates users cannot use copyrighted material in for-profit projects or in any way that damages the marketability of the original work.

It seems straight-forward enough, but in practice, it all gets very murky. For instance, Instagram Lives where music is playing in the background are often the target of copyright strikes. 'ChilledCow', one of the most popular live streaming channels on YouTube was briefly taken down due to violating the platform's terms of service, which many presumed to mean copyright infringement, but after immense backlash from adoring fans of the lo-fi hip hop live stream, the channel was reinstated with YouTube stating they had made a mistake.

But it's not just online channels or business owners that run the risk of a copyright strike. Small business owners are also at risk of dealing with copyright issues due to playing music at their stores.

In a recent analysis done by Cloud Cover Music that surveyed 991 business owners, it was discovered that many of them, especially ones with customer-facing stores choose to play music through their personal accounts on streaming services at their premises. However, over 69% of those surveyed did not have the required license to do so.


Business owners' music habits from a study on 'Workplace Music Habits and Laws' (Cloud Cover Music)

In order to legally play music at a store, or in any place with employees and/or customers, a business owner needs to have a public performing license (PPL). Most owners do not have such a license. But, more tellingly, most of them were not even aware they needed a PPL in the first place. And even fewer realized they could be facing some hefty fines for playing copyrighted music without a license.

If caught, these business owners could be required to pay anything from $200 to $150,000 in fines, depending on individual circumstances as well as how aware they were of the copyright laws in place. Peloton, a stationary fitness bike company, is currently being sued by the National Music Publishers' Association for over $150M (which they later updated to $300M) in damages for playing over 1,000 tracks in their streamed workouts, including hits from Adele, The Beatles, and Taylor Swift, without the proper authorization and licensing.

But, as the study reports, big businesses aren’t the only ones who face legal penalties for not acquiring the proper licensing fees. A small Washington bar was one of 11 establishments sued in 2018 for copyright infringement which, including attorney’s fees, totaled over $120,000 in damages for playing music without the appropriate licensing in place.

For many business owners, playing music in their stores or videos creates an experience for their customers or target audience. Cloud Cover Music's study also reports that background music can have a significant impact on behavior, including food choices and spending habits. This means foregoing playing music in their stores or created content is just not an option. Given that most small business owners and content creators cannot afford to pay huge amounts in legal fees, it would be in their best interest to educate themselves about licensing and local as well as international copyright laws so they can avoid dealing with major lawsuits or having the content they worked so hard on get taken down or worse, permanently blocked.

For more information or to see the full results, check out Cloud Clover Music's study here.

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