Thousands of recorded songs are easily available thanks to Pandora, Spotify, Amazon’s Prime Music, and other streaming music services. Under which circumstances may a business use these services? In preparation for my "Using Music at Work" webinar presentation, I perused the license terms of a few streaming music services.

Streaming Music Is Usually Limited to Personal Use. Streaming music services generally restrict usage to personal, non-commercial use. Hence, if you are the owner of a business such as a barber shop, restaurant, retail store, or gym, you cannot use your typical consumer streaming account to offer music to your patrons. There are business license versions of streaming music accounts that allow some commercial use but . . .

Commercial Versions of Streaming Music Licenses Have Limitations. A business that offers performances of copyrighted music to the public (e.g., its patrons) must have a public performance license from the copyright owner of that music. In the United States, there are performing rights organizations (PROs) - ASCAP, BMI, and SESAC – that issue most of those performing rights licenses for songs. The benefit to obtaining your business music via a service is that the service handles all the necessary performance rights license acquisition work so your company need not directly interact with the PROs.

Typically, the business license offered by streaming music services is meant only for mood music. Mood music is that background music you hear at a doctor’s office, hair salon, or grocery store. One service states that the service does not include the applicable PRO fees if the business uses the service for music used to accompany dancing (including ballrooms, discotheques and dance studios), bowling, skating or instructed health club classes; or for music used in a location where a cover charge is charged.

Can a Business Use Streaming Music Service Just for Staff? My analysis uncovered some gaps and gray areas on this question. Licensing is required for the public performance of songs (and, in limited circumstances, of sound recordings). Licensing is not required for the private performance of songs or sound recordings. Disagreements on what constitutes a public performance versus what constitutes a private performance have sparked many lawsuits. Nevertheless, one can certainly credibly argue that a group of three co-workers listening to streaming music within the confines of their office is a private performance. As the number of employees in your business setting increases, the closer you get to that public performance threshold – music for 20 workers staffing the kitchen of a restaurant, music for 50 employees at a holiday dinner, music for 250 sales representative at the firm’s retreat??? It is not always clear where to draw the line.

However, arguments about a private performance might not always be relevant – depending on the specific licensing language used by the streaming service. Not all the streaming services use the phrases “private performance” and “public performance” in their terms of use. For example, some restrict use of their standard accounts to “personal, non-commercial” use. One prohibits use of music from the standard account in “any business establishment”. That terminology leaves gray areas too. If five colleagues and I operate a start-up from my home, am I in a business establishment?

You May Not Use Streaming Music as a Soundtrack for Your Original Audio and Audio-Visual Productions. Even though streaming music is played in real time and is not downloaded to your computer, it is possible to capture a copy of the recordings. But just because you can capture it doesn’t mean you should. Hopefully, all readers realize that the streaming services’ terms of service do not allow using the music as the soundtrack for your own production. In fact, there are several issues to consider when adding music to your company video.