If you play music in your restaurant, you need a license. That applies whether you’re running a 12-seat café or a 200-seat dining room, whether the music comes from a speaker system, a TV in the corner, or a live band on weekends. The type of setup affects how much you pay and to whom, but not whether you’re required to be licensed.
This is the part many restaurant owners discover later than they should, often when a performing rights organization sends a notice. Getting ahead of it saves both money and headaches.
Why Restaurants Need a Music License
Music played in a public-facing commercial space counts as a public performance under copyright law. That’s true whether you’re in the US, Canada, or elsewhere, and whether or not you charge admission or consider the music incidental to the dining experience.
In the United States, the organizations that enforce this are called performing rights organizations, or PROs. The four major ones are ASCAP, BMI, SESAC, and GMR. In Canada, the equivalent bodies are SOCAN, which covers songwriters and composers, and Re:Sound, which covers performers and record labels. Outside the US and Canada, most countries have their own performing rights organizations with similar requirements.
Each organization represents a different catalog of songwriters, composers, and publishers. When one of their members’ songs is played publicly without a license, the PRO has the legal right to pursue the business for damages.
Those damages can be significant. Under Section 504 of the US Copyright Act, statutory fines for copyright infringement start at $750 per song and can reach $150,000 per song if the violation is found to be willful. PROs do actively monitor businesses, and restaurants are a common target because music is so prevalent in them.
The consequences are real. In one widely cited case, a New Jersey restaurant was ordered to pay BMI $24,000 after an investigator documented four unlicensed songs being played on a single evening. In Tampa, a restaurant called Tadpoles closed permanently after facing $30,000 in BMI fees. PROs do pursue these cases, and restaurants are a frequent target.
How PRO Fees Are Calculated for Restaurants
PRO fees are not flat across all restaurants. They’re calculated based on a set of factors that vary by organization, but the main variables are consistent across most PROs.
Venue size. Square footage and seating capacity both factor into fee calculations. A larger restaurant with more seats pays more than a smaller one. This is the most significant variable for recorded background music.
Type of music use. Recorded background music (from a streaming service or sound system) carries lower fees than live music performed by musicians. DJ performances fall somewhere in between. Karaoke is treated separately again. The more interactive or featured the music is, the higher the license cost tends to be.
Whether you charge admission. Restaurants that charge a cover for live music events are assessed at a higher rate than those where music is purely ambient.
Number of nights with live music. For restaurants that host live performances, the frequency matters. One night a week is licensed differently than seven.
Speaker count and usage. Some PRO formulas factor in how many speakers or screens are used to play music.
As a rough guide, a small restaurant using recorded background music only might pay each PRO a few hundred dollars per year. Add live music into the mix and that figure rises, with frequency and venue size both pushing costs higher. For a closer look at specific figures, the breakdowns for ASCAP licensing costs in the US and SOCAN licensing costs in Canada are worth reading before you start the application process. Because most commercially available music is spread across multiple PROs, the total can add up quickly when managed independently.
Recorded Music vs. Live Music: Different Rules
The distinction between recorded and live music is one of the most misunderstood parts of restaurant licensing, and it has a real impact on cost.
Recorded music covers anything played through speakers, including streaming services, playlists, downloaded tracks, CDs, and radio. If you’re playing a background playlist through a sound system, this is the category you’re in. PRO fees for recorded music are generally lower and calculated mainly on venue size and seating capacity.
Live music means any performance by a musician or band in the venue, regardless of whether they’re paid or performing for tips. Live music triggers higher PRO fees because the music is considered a more central part of the guest experience. The number of nights per week live music is performed directly affects the fee structure.
DJs occupy a specific category. If a DJ is playing recorded music, the performances are still subject to PRO licensing, and some PROs have specific DJ licensing schedules.
One important note: having a license for recorded music does not cover live music, and vice versa. Restaurants that host both need to account for both in their licensing.
The Problem with Consumer Streaming Services
This is the most common licensing mistake restaurants make. A staff member opens Spotify on a phone or tablet, connects it to the restaurant’s speaker system, and plays music throughout the service. It seems harmless and costs almost nothing.
The problem is that consumer streaming services are licensed for personal, private use only. The terms of service for Spotify, Apple Music, YouTube, and similar platforms explicitly prohibit commercial use. Playing them in a restaurant constitutes a public performance, which is not covered by a personal subscription, regardless of the tier.
This matters legally. A restaurant using consumer streaming without a separate PRO license is operating without the required permissions, even if the streaming service itself is paid for. The PROs can and do pursue businesses for this.
Consumer streaming also creates a content control problem. When staff shuffle from personal playlists, there’s no filter for explicit content, no scheduling by service period, and no consistency with the restaurant’s atmosphere. What plays is essentially random, and that’s a problem independent of the licensing issue.
How SoundMachine Handles Licensing for Restaurants
Instead of negotiating separately with ASCAP, BMI, SESAC, and GMR in the US, or SOCAN and Re:Sound in Canada, SoundMachine bundles those agreements into a single subscription that covers the restaurant’s use of their catalog. Restaurants using the platform for background music streaming are covered without needing to manage separate PRO relationships. The licensing coverage details explain exactly what’s included and how the compliance works.
This matters practically because managing multiple PRO agreements independently is time-consuming. Each has its own application process, fee structure, and renewal schedule. For a restaurant operator focused on running a dining room, that’s administrative overhead that a bundled service removes entirely.
Beyond licensing, the platform offers features that consumer streaming doesn’t: scheduling by time of day, content filtering for appropriateness, multi-location management, and control over tempo and genre by service period. The music program becomes a managed part of the operation rather than an afterthought.
What About the Radio Exemption?
Some restaurant owners are aware of a provision in US copyright law that exempts certain small businesses from licensing requirements when they play broadcast radio. This is sometimes called the “homestyle exemption” or the Fairness in Music Licensing Act exemption.
The exemption applies under specific conditions: the establishment must be below a certain square footage threshold (3,750 square feet for food service businesses), the equipment used must be of the kind commonly found in a home (a standard radio or TV), and the signal must come from a standard over-the-air broadcast, not satellite, internet radio, or a streaming service.
This is a narrow exemption. It does not apply to restaurants playing music from any digital or internet-based source, regardless of size. It does not apply to satellite radio. And it does not apply to any restaurant above the square footage threshold.
For most restaurants with a sound system playing curated music, the exemption is not relevant. The safest assumption is that you need a license.
What Happens If You Don’t Have a License
PROs have field representatives who visit businesses to check compliance. They also monitor social media, where restaurants sometimes post videos that reveal the music playing in the background. If a PRO identifies a business playing unlicensed music, they will typically send a notice requesting licensing, followed by legal action if the business doesn’t comply.
The financial exposure is real. Beyond statutory fines, businesses found to have willfully infringed copyright can face much higher damages, plus the PRO’s legal costs. The penalties for failing to comply with music licensing are significant enough that the cost of a business music license is almost always lower than the cost of defending against an infringement claim.
Setting Up a Compliant Music Program
For most restaurants, the straightforward path is to use licensed music for restaurants that bundles PRO coverage, gives you content control, and lets you build a program that fits your dining room and service style.
The questions to sort out when choosing a service:
Does it cover the major PROs in your territory? Different organizations represent different catalogs, and coverage varies by market. Before signing up, confirm that the service is licensed for the country your restaurant operates in. Not every business music service covers every market, so this is worth checking upfront rather than after the fact.
Does it cover your use case? Most business music services cover recorded background music streaming. If you also host live music or DJ nights, those events need separate PRO arrangements regardless of your streaming service.
Can you control the content? A good platform lets you schedule music by service period, set genre and tempo parameters, and filter for explicit content. These aren’t just nice-to-haves; they’re part of running a consistent dining experience.
Does it work across multiple locations? If you operate more than one restaurant, a platform that manages music centrally saves significant time and keeps your brand sound consistent.
Licensing is the part of a music program that most restaurants set up once and forget about. That’s actually fine, as long as it was set up correctly in the first place. The mistakes that lead to PRO notices and legal exposure are almost always the same: a consumer streaming account left running on the speakers, a live music night that nobody thought to license separately, or a multi-location chain where music decisions were made at the branch level without central oversight.
Getting the licensing right doesn’t require much ongoing effort. It mostly requires making the right decision once, choosing a service that covers it properly, and understanding where the gaps are if you add live music or DJ events down the line.
The Bottom Line
Music licensing for restaurants isn’t complicated once you understand what it actually covers. You need public performance rights for any music played in your venue, those rights are administered by performing rights organizations in your territory, and a consumer streaming account covers none of them.
The good news is that the compliance path is straightforward. SoundMachine handles the PRO agreements, keeps the catalog legal, and gives you the scheduling and content tools that a personal streaming account never will. Restaurants using it for background music streaming are compliant without having to manage anything separately. The annual cost of getting it right is a fraction of what a single PRO lawsuit would cost to defend.
Most restaurants that run into licensing problems didn’t set out to break the rules. They just never thought about it. The ones that get caught are usually running a personal Spotify account through the speakers, hosting live music without a separate license, or operating multiple locations where no one ever centralized the decision. Avoiding those three situations covers the vast majority of the risk.