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Music to my Ears – Playing Music in the Workplace
By Christopher J Sherliker

Many business owners are confused about what type of licence they need if they are playing music in their shops, offices, factories or other workplaces, not to mention restaurants and bars. Here, Maria Guida, Property and Licensing Partner, and Legal Intern, Jayshree Small, explain when it is necessary to obtain (and pay for) a licence from the Performing Rights Society (PRS for Music) and Phonographic Performance Limited (PPL).

Many bars, restaurants and retail stores play recorded music as part of the theme of their premises, or as an attempt to create a specific atmosphere and ambience for their customers. Some offices and many factories and workshops allow the use of radios or background music for their staff to listen to while they work.

Research has shown that in shops, background music increases sales, lengthens the amount of time customers spend in a shop and lifts the sprits of staff.

The fact that business owners need to pay for the right to play recorded music confuses many, especially when they have already bought and paid for the music. Often business owners either ignore or overlook the need to pay a licence fee for the privilege of either playing music or just having the radio on for staff and customers.

The first time they are aware of it is often a visit and/or a nasty letter from PRS for Music (PRS) or PPL.

Who are PPL and PRS?

PPL and PRS are two separate organisations that are responsible for licensing 'music users' and collecting royalties for copyright music on behalf of their members. PPL represents the interests of performers and record companies, while PRS represents the music writers, composers and publishers.

Technically, all copyright music requires the permission of the copyright owner for every piece being performed. However, PPL and PRS provide a means of obtaining that permission through their licensing system, and they are responsible for distributing the fees received to the artists and copyright owners.

PRS

When a song or piece of music is written, the songwriter owns the copyright and is entitled to decide how and when it should be played. Music is released, allowing you and me to purchase a song, which we can play at home. However, if you play that song to a wider group of people (for example, on your business’s or organisation’s premises), it is classed as a ‘public performance’. If you want to make a ‘public performance’, you must first seek permission from the copyright owner of that song.

If you do not obtain the required licence, you may risk infringing copyright. So, in nearly all cases, if you are playing copyright music written, published or arranged by a member of PRS (or one of its affiliated societies) outside the home (or domestic environment), you will need to buy a music licence, unless one of the exemptions apply (see below).

PRS is a not-for-profit membership organisation, existing solely to enforce the collection of licence fees from music users, and distribute these as royalties to it members – writers and publishers of music from the UK and abroad.

PPL

Whereas the author and music publisher own the actual copyright to the lyrics and composition and this is administered by PRS, PPL represents record companies and performers.

PPL licenses rights similar to PRS’s,but in relation to the copyright of the performance and sound recording, which are owned by the performers and record company and administered by PPL.

As PRS and PPL operate for different rights owners, they have always remained as separate companies. However, this may change one day for charities and non-profit organisations only. A pilot scheme was announced in late 2009 to introduce a dual PRS and PPL licence for non-profit organisations and charities, but this appears to have been put on the back burner.

Who Needs a PPL and PRS 'Music Licence'?

A music licence is required for any premises where music is played and can be heard by the public. Although private homes are excluded (as long as the playing of music is solely for private purposes), the definition does include music performed within a business premises, whether it is for the benefit of customers and staff, or a club where music is played for its members.

Normally, the owner or manager of the premises is responsible for obtaining a PRS music licence and PPL licence. The playing of music includes the use of a radio, CDs, jukeboxes, MP3 players, television, video music, telephone systems and DVDs, as well as live or recorded music from a music system or console.

What Happens if You Fail to Obtain a Music Licence?

Failure or refusal to apply for one could lead to action being taken for copyright infringement on behalf of the copyright owner, which may lead to an award of damages and costs. Both PPL and PRS can claim for unpaid licence fees going back six years.

At a Glance Guide

The table below gives a basic guide to what type of licence may be needed for each category of licensable music. Not wishing to confuse anyone, there are other types of licence as well, which are mentioned below:

TYPE OF LICENCE JUKEBOX MP3/ CD RADIO TV & SATELLITE FILM, DVD VIDEO DJs/ DANCING LIVE MUSIC KARAOKE
PRS
PPL    
Local Licensing Authority Premises or Personal Licence, Club Premises Certificate, Temporary Events Notice    
VPL (Video Performance Licence, administered by PPL)            
Filmbank or MPLC              
TV licence              

 Note:

  • PPL charges are sometimes included in the rental charged by jukebox or music suppliers.
  • PPL does not always charge for radio and TV/satellite use. Broadly speaking, PPL will apply if you are playing or showing music. For music videos, VPL applies and this is administered by PPL.
  • If you are showing a film, you may need a Filmbank or a Motion Picture Licensing Corporation (MLPC) licence, depending on your type of business and which film you are screening. Contact Filmbank or MPLC to confirm. An MPLC licence enables any organisation to show films made by MPLC licensors (both Hollywood and independent filmmakers) to members of the public.

What Types of Premises are Affected?

  • Churches (church halls used for exhibitions and one-off events)
  • Halls
  • All government buildings (concert venues)
  • Cinemas and theatres
  • Educational establishments (music featured in school plays)
  • Events and exhibitions (museums and galleries)
  • Health and beauty venues (background music and TV)
  • Holiday parks (holiday centres, discos and quizzes)
  • Leisure sport and fitness locations (dance classes and aerobics)
  • Offices and factories (including telephone music on hold, waiting rooms and reception areas)
  • Bars, pubs and nightclubs (dancehalls, nightclubs and discos)
  • Restaurants and cafés (one off events, jukeboxes and radio or background music)
  • Shops and stores (background music, listening posts and touch screen kiosks)
  • Social and members’ clubs (bingos and other games)
  • Public transport (boats, coaches and ships)

Exceptions

Believe it or not, there are a few places which, subject to conditions, do escape the obligation of PPL and PRS Licensing. PPL or PRS will not licence the use of sound recordings in NHS hospital wards, religious services or ceremonies, domestic use in care homes and in medical treatments taking place in NHS hospitals.

Most non-profit organisations and charities also escape having to apply for a PPL licence, until 1st January 2012, that is, when this exemption will be scrapped. The law was introduced on 1st January 2011, but charity shops and some other institutions will be exempt from the fees for the first year. A statement from the Intellectual Property Office said a charge of £40 a year would apply to 60 percent of the buildings where voluntary groups met and that most charity shops would pay only £54 per year.

What About Working from Home?

PRS does not usually charge a licence fee where:

  • You have your home office in a private residence. That is, an individual working on their own in their home office with others who are permanently resident at that address. However, if you have colleagues who work with you (who live elsewhere) or customers/clients coming to see you (and music is played at these times), then this is not exempt and a licence fee is payable.
  • You are a lone worker - workplaces with only one worker, where music is not made available to any visitors or customers at the premises.
  • Personal portable devices. For example, where your staff listen to music or the radio through personal headphones on an MP3 player. Whatever is being listened to should only be audible to the individual through the headset attached to their device and not to any other individual in the workplace.

How Much does PPL/PRS Licence Cost?

The size of the premises the licence is to take effect over and the number of people who will be listening, as well as the number of days in the year and the extent to which the recorded music will be used, are the main factors in determining how much your PRS and/or PPL licence will cost you. It would be unfair to charge a primary school or a small café owner the same amount as the hosts of a major open-air festival.

PPL Refunds

Another bit of good news for business owners is that last year, the Copyright Tribunal published its decision that PPL should replace the tariffs charged to public houses, bars, cafés, restaurants, shops, stores, factories and offices from 2005. In 2005, there was a massive hike in fees – 400 percent in the case of some large restaurants.

This decision made on appeal has already allowed millions of pounds to be claimed back by licensees as the decision is retrospective. This means that licence fee payers can claim back the difference on fees paid since 2005.

To avoid PPL being deluged with claims, you can only apply for a refund if you are owed more than £50.00. Nearly 100,000 premises have been affected. You ought to have been sent a letter by PPL if you are one of those premises due for a refund. Information on how to claim a refund can also be found on PPL’s website.

And Finally… Can You Get Away With Not Paying PRS and PPL Fees?

If you want to listen to BBC or commercial radio (playing PRS and PPL affiliated artists’ music) or play music at a venue/in the workplace, where members of the public, staff or work colleagues can also hear it, there is no way to avoid being subject to these licence fees.

Depending upon how musical you are, however, you might want to compose, record and play your own original compositions. As the owner of the compositions, no licence fee would apply in this case.

Alternatively, in an office or factory (as long as it is compatible with concentration and productivity), you could simply authorise individual employees and staff to use headphones with their own portable devices.

Also there are music artists that are not affiliated to PPL or PRS. You will still have to pay a licence fee to some other licensing organisation, but this is normally much cheaper. There is even a specially formed royalty free music radio station out there, which was created to enable owners of smaller businesses to play background music for significantly cheaper annual fees.

As you can see, this area of music licensing is very complex and you should not rely on any of the above as specific legal advice.

Added: 3rd February 2011

Christopher J Sherliker is a partner for Silverman Sherliker LLP who provide legal solutions across a spectrum of requirements.  Find out more about Silverman Sherliker LLP.

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