Why One Music License Isn't Enough
If you've started looking into music licensing for your business, you've probably run into acronyms such as PRO, CMO, blanket license, catalogue and the so on. We break down in simple language the meaning of these acronyms and the one thing that trips up almost every small-to-large business owner who tries to handle these organization(s) themselves.
What is a PRO?
PRO stands for Performing Rights Organization (sometimes called a Collective Management Organization - outside the US). This is an organization that represents and collects royalties on behalf of songwriters, composers, and publishers whenever their music is performed publicly. In the US, the major PROs are ASCAP, BMI, SESAC, and GMR. Each one represents a different, and partially overlapping roster of songwriters and publishers. In essence, when a business wants to play music publicly in a restaurant, retail store, bar, gym, or hotel lobby, it needs a public performance license covering the songs it plays. A PRO sells that permission in the form of a blanket license. This implies that you pay one fee upfront , and get the right to play everything in that PRO's catalog for a set period of time.
No PRO covers everything (The Catch)
This is the part that catches most business owners out. Each PRO only represents the writers who have signed with them. ASCAP doesn't cover BMI's writers. BMI doesn't cover GMR's writers. And a huge number of hit songs are co-written by multiple songwriters who are frequently signed to different PROs for the same track. For instance, take a mainstream artist like Taylor Swift with a long list of hits. It's entirely normal for their catalog to be split whereby some songs are licensed through one PRO, others through a second, others through a third, sometimes because different co-writers on the same song are affiliated with different performing rights organizations. This means that a single blanket license from just one PRO might cover only a fraction of that artist's discography. This becomes very problematic for business owners seeking a blanket license to play music in their establishment.
What this means for your music license strategy
If you want the freedom to play mainstream, contemporary music in your venue without constantly checking whether a given track is "allowed," a single PRO license is simply not enough. To be fully covered, most businesses playing a broad range of popular music need blanket licenses from all four major US PROs such as ASCAP, BMI, SESAC, and GMR plus separate consideration for the sound recording/publishing side of licensing (handled differently from the composition side).
For the avoidance of doubt, that's not one negotiation. It's four separate agreements, four separate fee schedules, and four separate renewal cycles before you've even started thinking about the actual playlist.
Is it expensive?
Yes, cumulative blanket licenses across multiple PROs add up really quickly. However, weigh that against alternatives to playing unlicensed music and getting fined. U.S. PROs actively monitor commercial premises, and infringement claims can result in statutory damages assessed per song, which escalates fast in a venue playing music for hours, every day. The cost of getting licensing wrong is consistently higher than the cost of doing it right.
The simpler path
This is exactly the problem our B2B commercial music streaming service, Lobby & Lounge Music, is designed to solve. The value we create is obviously in our name. We currently partner with independent artists and labels who do not have the benefit of celebrity but have amazing catalogues spanning over 10,000+ tracks. These are real music from real artists at a real price. Every track available to play is already cleared across the relevant rightholders (recording/publishing rights), so you never have to cross-check. Your business is to save huge costs in music licensing while focusing on business operations.
In essence, copyright fees are not yet included in your subscription with us and you have to pay any copyright fees with your local PROs (ASCAP, BMI, GMR) once you’re streaming music outside our catalogue represented by these collection societies. Meanwhile, we are working towards expanding our catalogue in the very near future partnerships with the US. PROs so we can work in the PRO fees with one subscription. In the meantime, support Independent artists/labels with one login, one monthly fee and no per-PRO negotiation so you avoid wondering whether today's playlist happens to include a song that isn't covered.