What Restaurant Operators Need to Know About Music Licensing

Music can play a role to enhance the dining experience, setting the mood and complementing the menu and design. It's important for operators to ensure they are abiding by the law and compensating the creators and rights holders. Performing Rights Organizations (PROs) such as ASCAP and BMI represent songwriters and publishers and grant licenses to play copyrighted music. 

To learn more about music licensing, misconceptions, playlist trends, and more Modern Restaurant Management (MRM) magazine reached out to Ola Sars, CEO of Soundtrack, a streaming service that brings music to businesses of all kinds, including restaurants.

What should restaurant operators know about music licensing? 

• Truth be told, music licensing can be complicated. We recently surveyed 150 business leaders in retail, hospitality and restaurant and found that only half had some familiarity with music licensing. 
• We find that many restaurateurs don’t know that paying for only one PRO or using a consumer service such as Spotify or Apple does not provide them with the fully legal use of music in their venue. This includes staff members playing their personal music accounts too. 
• Also, getting licenses from all four PROs individually can be time consuming and costly. A B2B music streaming service, like Soundtrack, bundles these costs and includes additional music access through the company’s direct publishing licenses. 
• A made-for-business streaming service ensures restaurants are playing legal music, enables operators to enhance the customer experience and eliminates the danger of hefty fines. 
• Whether you’re a national restaurant group with hundreds of locations or a single-location coffee shop, it is cost-effective to use a compliant business music streaming service and the made-for-business features that many are not aware of. 

What are common misconceptions about music licensing and the costs? Why do you think so many operators are unaware of licensing fees? 

• The first misconception is around the misuse of personal music services in a business setting. As laid out in the terms and conditions of consumer services such as Spotify, consumer services are not licensed for commercial use. The misuse of these personal music services can put the business at risk. These fines can range from $750 to $30,000 per infraction. 
• The second misconception is if you have one or two PRO licenses such as ASCAP and BMI that you’re fully covered. Even if a business is licensed with the four major PROs, they would be required to track every song and writer played in their venue to report it which can be a daunting task. 
• Music licensing is not something a business does every day and there are complexities and misinformation that exists. Finding a licensed commercial music service provider can eliminate any grey areas so that restaurants are fully compliant. A B2B service will ultimately save time, money and provide important tools that can give the operator peace of mind.

A lot of operators think they are doing the right thing and then receive calls/emails from services saying they owe them money. If that happens, what are the best practices to proceed? Are there licensing scam schemes operators should be aware of? 

• When restaurant operators receive unexpected calls or emails claiming they owe money, it’s important to handle the situation carefully to make sure they aren’t getting scammed. 
• Unless they have an agreement with a PRO or subscription with a B2B music provider, the best tips to follow are to first verify the claim and do research or ensure it’s a legitimate PRO – think ASCAP, BMI, SESAC or GMR. 
• If an operator finds themself in this position, subscribing to a B2B service is an efficient solution because companies like Soundtrack provide a certificate of coverage that an operator can simply email or show to PROs that they are properly licensed. 
• Look to see if the number on the documentation matches what is on the company’s official website or call the organization they say they are from to verify the claim. If they are threatening a significant fine, consulting legal counsel may be best. Lastly, document everything, and keep all records of correspondence and payment history, whether that’s a subscription to a commercial music service or with PROs to protect yourself from duplicate claims and scams. 

Are there any music/playlist trends? 

• The biggest trend is leveraging AI for playlist creation that also meets business needs such as covering a restaurant’s long hours of operation and can be tailored to location, guest demographics, vibe, the type of restaurant and more.
• In the near term, there has been an increase in the consumption of country music that follows consumer trends. 
• Across Soundtrack’s 80,000 brand partners, country music plays in cafes increased by 27 percent, restaurants by 22 percent and bars by 10 percent YoY .
• Country music was one of 2023's fastest-growing streaming genres in the U.S., with country on-demand audio streams exceeding 20 billion, a 23.7 percent increase from 2022. In 2024, we have seen top 40 pop/rap artists like Beyonce and Post Malone publish their first country albums, showing country music is growing and bringing listeners and artists in from across genres. 

How can restaurant operators best use music to set a scene? 

• Choose songs and playlists that find your brand and lend themselves to the time of day. The vibe on a Saturday night is totally different than a Tuesday lunch rush. Selecting songs with similar tempos and paying attention to the transition from song to song can make a difference. A tool that leverages AI to create playlists like Soundtrack’s solves for this. 
• What sound you go for depends on the scene you would like to create. Preferably it should align with other parts of the customer experience, such as the restaurant’s interior design, the menu and the staff. For example, Chef Paco Moran, a winner of the Food Network show Chopped, consistently plays Cumbia music to set the scene for his guests in his Southern California Mexican seafood restaurant, Loreto. He has used consistent sounds to create a coherent experience for the customer and even reports increased staff satisfaction.
• Music should be programmed according to peak and slow hours. When there are more people in the restaurant, play music that matches the energy. A higher tempo beat can encourage staff to move a bit faster. It can influence customers to keep a steady flow in and out of the restaurant, along with drawing sidewalk traffic into the energetic setting. Bring the tempo of the music down when the pace slows down. This can influence the fewer guests to spend more time dining, promoting higher tabs.