I do my banking at a credit union where the president has a radio playing in the front area where the customers are. The employees have told me this is illegal. I find it hard to believe there is a law covering this situation. Is it illegal?
Most businesses that treat their customers to music get what's called a "blanket license" from ASCAP or BMI or SESAC, that allows them to play (perform) that performing rights organization's entire catalog of songs for a modest fee.
And as my colleague notes, small (in size) businesses are exempt, and if the business isn't exempt, the PRO will send their lawyer to enforce their rights.
But here, this use may qualify for what the Copyright Act, section 110(5) provides as an exemption, called the “homestyle exemption.”
This section exempts from the need to get a performance license the reception of radio or TV broadcasts in "an establishment open to the public for business." The purpose of the “homestyle” exemption is to release from copyright liability anyone who merely turns on, in a public place, an ordinary radio or television receiving apparatus of a kind commonly sold to members of the public for private use, since it's a "secondary use" of the transmission, by turning on an ordinary receiver in public which makes liability remote. This exemption only applies to a single radio or television receiving apparatus of the type used in one’s home. If the broadcast signal is received in an establishment of an area smaller than a certain gross square footage – less than 3,750 square feet for a food service and drinking establishment and less than 2,000 square feet for any other type of business – the law puts no limitation on the number of loudspeakers and TV monitors that may be connected to the receiving apparatus. Where the gross area of the business exceeds these minimums, the law imposes limits on the number of loudspeakers and TV monitors as well as on their placement and – in the case of audiovisual monitors – their size. The device must be relatively small and of limited sound producing capacity.
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The Fairness in Music Licensing Act allows small restaurants and retail establishments to play recorded music and or radios without paying a licensing fee. However, this only applies to very small establishments, and I doubt a credit union would qualify.
Accordingly, the employees are probably correct. I do not doubt that ASCAP favor this establishment with a letter and/or lawsuit soon.
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The employees may not know whether the bank already pays for a blanket license to broadcast the music. As my colleagues have pointed out, with a few exception, a public performance license from ASCAP, BMI or SEASAC is usually required for places of business.
In general, this is legal for businesses with facilities of less than 2000 square feet, and restaurants, bars and clubs with facilities of less than 3750 square feet. The vast majority of small businesses are too big to comply with these "square feet" limitations. Moreover, even the only thing that is exempt is playing one radio or one television of the same size that would ordinarily be used at home. And this exemption does not apply to stereos, CD players, MP3s or other recorded music. As a practical matter, most small businesses should acquire "blanket" licenses from the performing rights organizations (ASCAP, BMI, SESAC, Sound Exchange (for internet streaming)). These blanket licenses are inexpensive and worth the price----even for a bank. The performing rights organizations are very aggressive in enforcing their rights---even against businesses such as banks, grocery stores, dentists, and hospitals. Here is a link to a good article on this subject (although I am not entirely in agreement with the interpretation regarding public performance). http://www.paaba.org/2011/10/when-should-small-business-pay-ascap-or-bmi/
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You will need permission to play records or tapes in your establishment. Permission for radio and television transmissions in your business is not needed if the performance is by means of public communication of TV or radio transmissions by eating, drinking, retail or certain other establishments of a certain size which use a limited number of speakers or TVs, and if the reception is not further transmitted (for example, from one room to another) from the place in which it is received, and there is no admission charge.
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