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Music can attract customers into your business, create ambience, and keep customers in your business for longer leading to an increase chance of a sale or the purchase of extra products.  But many businesses do not realise that music is intellectual property and subject to copyright.

You can only use music in your business with the permission of the copyright owners.  Without permission, you risk breaching the law.  Also by not paying the licence fee, you are depriving the copyright owner of rightful income.

A licence is needed by anyone who plays music audio or video recordings in public.  This includes:

• playing music in any area that is accessible to the public played from a PC, MP3 device, CD player, jukebox, or played by a DJ
• playing music or radio through your telephone ‘on-hold’ system
• hiring your premises to others who then use it to play music.  This includes events centres, halls and clubs.

What rights are at play?

Recorded music is protected by two separate copyrights.  First, copyright exists in the song itselfthe composition and lyrics - the “musical work”.  Second, there is copyright in the recorded version of the musical work captured in the “sound recording”. 
The composers, or their music publishers, own the copyright in musical works while the recording companies own the copyright in the sound recording.  Permission from both copyright owners is needed before a sound recording can be played or copied.

Why you need a licence?

You are free to listen to whatever music you like in your own home. But when music is played on radio, television, CD or tape outside a private environment, it is a performance “in public” and a licence is needed.

A common misconception is playing a CD in a store.  When you buy a CD, you do not buy the right to perform that musical work in public.  Without a licence, you breach copyright.  So, getting a licence will give you peace of mind. 

Who do you need to apply to for a licence?

Businesses that choose to play copyright music to their customers need permission from the copyright owners.  You do not need to contact the individual copyright owners.  Instead, you can apply for licences from the Phonographic Performances NZ Limited (PPNZ) and Australasian Performing Right Association Limited (APRA). These two organisations protect and exercise these rights for their members. 

You may also need to apply to The Australasian Mechanical Copyright Owners Society (AMCOS) for any applicable mechanical rights associated with the use of music.  APRA also manages the rights of AMCOS.

What are the risks of not getting a licence?

If you play music in your business without a licence, you are breaking the law.  The penalties you risk are up to five years in prison and/or a fine of up to $150,000.  And don’t forget about the adverse publicity and your legal fees!

Once you have a licence, you do not need to reapply each year.  PPNZ/APRA will automatically send you a renewal notice.   

How much does a licence cost?

How much you pay for a licence depends on the size of your business and the type and number of media players.  You may need multiple licences depending on the business you run. 

And on a final note…

Paying a licence fee to use the music you play in your business recognises the talents of the music creators and rewards them for their efforts.

Apply for your licences now and sing to the tune of your customers without denying music composers and publishers their fees.

An edited version of this article was published in Her magazine, September 2010

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  Corinne Blumsky

  Partner