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How To Avoid Music Licensing Fines

Receptionist plays illegal music

Is the use of music on your telephone or in your establishment legal? It's nice to have good music playing when you place callers on hold, or when guests are waiting or shopping in your business, but getting that music from the wrong place can cost you thousands of dollars in fines. Yes, buisness owners do get fined for playing music without license or permission, and it's not cheap!

All Commercially-Used Music Must Be Licensed

  • Music On Hold: All on-hold music (even a radio station) must be licensed. If you use an on-hold service, make sure that service is licensed.
  • Background music services: Make sure the service is licensed. If not, your business will need a license.
  • Recorded music: Playing recorded music requires a license. The only exceptions are for demonstration purposes (such as audio equipment sales).

Store Owner Contacted By "Testy" Licensing Organization

You can't be sure whether you're next on the list to be called by a licensing organization, looking for fees. The following was reported by the Michigan Retailers Association:

"It looks like their tactic is to catch you off guard," said Faye Hirt, owner of Faye's at Mira, a womens clothing store in Holland, Michigan that was called by BMI. She got into what she described as a testy conversation with a follow-up caller from BMI. "They didn't seem to be looking out for our best interests," she said.

In cases where a radio station is being "re-broadcast" on the music on hold system, fees and fines can be applied—regardless of how many speakers are in use in the facility. These laws apply to all commercial establishments, not only retailers.

Furniture Store Told To Pay Nearly $2000 Fine—Per Year!

Another Michigan Retail Association member, the owner of a furniture store who preferred not to be identified, said the employee who answered her store's call from licensing organization BMI (Broadcast Music, Inc.) thought it was a radio station doing a survey. She also received a filled-out contract for a license that would have cost her business $1,957.50 per year. However, she said a license wasn't necessary because she plays music only in the office, not on the sales floor.

If the music had been carried on her telephone system, however, a license for using copyrighted material for hold music would have been required. One way to avoid such licenses is to use a professional music on hold provider, such as Easy On Hold.

Retailer Threatened With $400,000 Fine

One more example of how dangerous unauthorized use of music can be. How would you like to be informed that you have been sued for $400,000 for playing music in your store? Larry Leigh, owner of Leigh's and Mettie's womens clothing stores in Grand Rapids, found out the hard way about penalties for unlicensed music use. Several years ago, he received a letter from licensing organization ASCAP stating that he was violating copyright regulations by playing tapes and CDs in his stores. Unfortunately, Leigh got some bad advice from the business that installed his store stereo system, having assured assured him he didn't need to worry. Two years later, he was sued by ASCAP for $400,000. His attorney informed him that his chances of winning the suit were not good, he settled out of court for a $5,000 fine.

Custom On Hold Messaging Puts You In Control

A custom on-hold production is the only way to fully control the content your customers hear while waiting on hold. While radio stations are known for unpredictable chatter, sensational news stories and loads of commercials (even for your competitors), custom-scripted on hold messaging provides the right message to the right people at the right time. Callers are tuned in to you and what you have to offer, so that's prime time for making a good impression.

Worth the cost? Even with the more powerful marketing potential custom music on hold messages provide, the cost is significantly less than national music services, do-it-yourself solutions, or (gulp) fines and fees.

About music on hold messaging systems

Easy On Hold custom productions deliver your messages continuously. A complete music on hold system includes a custom script, announcers, royalty free music and your own digital on-hold equipment. At a time when many on hold messaging vendors are requiring long term contracts, Easy On Hold's low price point buyout approach has earned widespread recognition. The reliability of the equipment and free warranty make an outright purchase more appealing. Lear more about no-contract messaging on hold options.

The bottom line? When businesses weigh the benefits of using music on hold against potential legal headaches, they often choose Easy

Download Hold Music Articles

Article Download: Understanding Hold Music Copyright and Licensing
Article Download: Is Radio On Hold Legal?

Radio On Hold is Not Legal!

Using a radio on-hold is common. Many times a telephone system technician will hook up a radio for use on-hold, knowing that music royalties are "not his problem". Most people using radio on hold probably are not aware that they're in violation of any laws, in that they assume the radio station has already covered all licensing costs on their end. The spirit of the law is that responsibility falls to the end-user, so your re-use of a radio station is considered a "re-broadcast" and is therefore subject to fees.

Tim Brown is the founder and originator of Easy On Hold and a broadcasting and marketing veteran advising businesses globally in the architecture of music on hold.