When music is played in a business, the business owner is required to pay copyright royalties on the songs. The good news is that most credible music for business services—like Custom Channels, Muzak, Mood Media, or RockBot—include music licensing in their monthly fee. That means licensing, managing, and delivering your mix are all handled for you.
It is possible to create your own music mix from your iPod, streaming account, or CDs and license the music yourself. However, most business owners are too busy running day-to-day operations to manage playlists and stay on top of licensing requirements. If you choose to do it yourself, you’d need to secure proper licenses through performing rights organizations such as ASCAP, BMI, SESAC, and GMR. Each one represents different songwriters and catalogs, which means a business must hold a license from every applicable organization to stay compliant.
How ASCAP Assessed One Business
Here’s a real-world example of how licensing costs can add up. The performing rights organization ASCAP contacted a restaurant that was playing in-store music to inform them of their legal obligations: “Attached, please find licensing documentation for ASCAP and more background on why licensing for background music is so critical.” Along with that message came a six-page form and a bill for $390.
Here’s how ASCAP arrived at that amount. By using a questionnaire—similar to an IRS form—ASCAP determines how much a business owes for playing its licensed songs:
- Does the restaurant have live music performances? No.
- Are TVs and radios being used? No.
- Is admission being charged? No.
- Does the restaurant use recorded music? Yes. That’s a charge of $3.65 per occupancy.
- What’s the total occupancy? 50 people.
According to ASCAP’s formula, the calculation is 50 x $3.65 = $182.50. However, ASCAP enforces a minimum fee of $390. A business pays whichever is greater.
That $390 fee covers only songs written by ASCAP songwriters—and only for one year. The restaurant would still need to create and update playlists and ensure everything fits their atmosphere. And this fee only covers ASCAP; there’s more to consider.
This Isn’t One-Stop Licensing
Not all songs are licensed through ASCAP. The other major U.S. performing rights organizations are BMI, SESAC, and GMR. To legally play any commercially available song, a business must obtain multiple licenses. Using the same ASCAP formula, the total could easily reach $1,500 or more per year, just to stay compliant—and that doesn’t include the time and effort required to manage playlists or purchase songs.
So while a business can technically self-license its background music, it’s often costly, complicated, and time-consuming. That’s why many businesses turn to licensed services that handle all of it for them.
The Smarter Solution: Licensed Music for Business
In this story, the restaurant was already a Custom Channels client. That means they were completely legal and covered for a fraction of the cost. We handle all music licensing for our clients, stream directly to their business in high-quality audio, and constantly update the playlist to keep it fresh. The restaurant’s response to ASCAP? “We’ve got it covered with Custom Channels!”
With licensed music for business, you get peace of mind, professional curation, and compliance—all included in one simple monthly service.
Read more about music licensing here or contact Custom Channels with any questions about licensing or music services for your business.
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