Music Licenses

In 1926, New York City enacted the Cabaret Law.  This law is meant to regulate nightlife activities in bars, restaurants and other establishments.  The legislation has undergone many challenges and has been amended since, but it still not a popular law.  Even Michael Bloomberg tried to change the law during his term as Mayor.  In a 1988 case, the portion of the law prohibiting live music was found to be unconstitutional.  While the portion of the law prohibiting dancing has been challenged, it still stands.  Now the main effect of the law is essentially to prohibit dancing in any establishment without a City issued cabaret license.

If you play music in your restaurant (even as background music through your iPod) without the appropriate music distribution license, you may be fined up to $30,000 for each song played.  Even playing songs that you legally purchased is considered to be against the law because there is a difference between purchasing music for “personal use” versus “commercial use.” In recent weeks, a few of our clients have received letters from ASCAP (the American Society of Composers, Authors, and Publishers) – a Performing Rights Organization that represents thousands of artists. The other well-known Performing Rights Organizations include SESAC (the Society of European Stage Authors and Composers) and BMI (Broadcast Music, Inc.).

A case filed in federal court this week brings up some important issues for bar and restaurant owners to consider. Are you legally permitted to play music at your establishment? If you do so without prior approval or licensure (from the Artists themselves), you may face large penalties.  Even if you legally purchase music from iTunes, you are still prohibited from playing your downloaded music without obtaining the appropriate music distribution license; this is because your use of the music is for a “commercial purpose” rather than personal enjoyment. This is also true if you have a cover band play at your establishment. 

“Commercial purpose” or “commercial use” is defined as any use of a copyrighted song that somehow helps a person earn money. It is assumed that restaurant and bar owners play music at their places of business to draw in crowds, and thus, to earn money.