Are you playing background music in your retail store, broadcasting a song on the radio, or organizing a live concert? You need a Public Performance License.

Disclaimer: This Article is for general informational purposes only and does not replace legal advice for specific situations.

TL;DR

A Public Performance License grants you permission to play or broadcast a copyrighted musical composition in a public setting. A common mistake is assuming that paying for a personal Spotify subscription gives you the right to play music for your customers. Failing to secure a blanket license from Performing Rights Organizations (PROs) or directly from copyright holders can lead to severe copyright infringement lawsuits and devastating financial penalties.

The plain definition: Public Performance License

In simple terms, a Public Performance License is an agreement that grants permission to perform or transmit a copyrighted musical composition to the public, typically obtained from a Performing Rights Organization (PRO) or directly from the copyright owner. The performance right refers to the copyright doctrine which allows licensees to "perform" those works in return for royalties paid to the copyright owners.

It is crucial to understand that in order for a performance to happen, there does not need to be an actual live performance of the song by a musician. Rather, the song (or a recorded version of it) needs only to be played in a public setting - perform a work publicly.

What does it mean to "perform a work publicly"?

According to Section 101 of the U.S. Copyright Law, to perform or display a work "publicly" roughly means that the work has been communicated beyond the home, and beyond one's immediate circle of family and friends.

Specifically, the law defines it as performing the work at "a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered."

Why does this concept exist?

Rooted in the U.S. Constitution, copyright exists to stimulate artistic creativity by securing exclusive rights for authors. When a song is broadcast on TV, streamed online, or played in a restaurant, it adds immense commercial value to that environment.

The Public Performance License exists to ensure that songwriters and publishers receive performance royalties whenever their work is communicated beyond a private home. Without this mechanism, music creators would be economically unable to focus their talents on creation, as they would not share in the profits generated by the widespread daily use of their art.

How it works: PROs and key "players"

The foundation of the performance right is located in Section 106 of the U.S. Copyright Law, which confers six different exclusive rights upon a copyright owner.

Two of these rights deal specifically with the performance right:

Right #4 (The Composition Right): Grants the exclusive right to perform the copyrighted work publicly in the case of literary, musical, dramatic, and choreographic works. This deals strictly with compositions, the royalties for which are paid to songwriters and publishers and administered by PROs.
Right #6 (The Sound Recording Right): Grants the exclusive right to perform the copyrighted work publicly by means of a digital audio transmission in the case of sound recordings. This deals solely with sound recordings.

Because it is impossible for a songwriter to track every radio station, bar, and TV channel in the country to collect fees, the U.S. relies on Performing Rights Organizations (PROs). PROs act as intermediaries between creators and music users.

The big four PROs: In the U.S., performance rights for musical compositions are primarily managed by four agencies: ASCAP, BMI, SESAC, and GMR. See more: "What is Performing Rights Organizations (PROs)"
Blanket Licenses: Instead of licensing song by song, businesses usually pay for a subscription or "blanket license" from the PROs. This grants the business legal access to the PRO's entire catalog of millions of songs.
Royalty distribution: Once the PROs collect the license fees from businesses and broadcasters, they track the usage and distribute royalties to songwriters and publishers based on ownership shares and usage data.

How do Public Performance licenses differ for digital transmissions?

Under U.S. Copyright Law, the key difference between traditional public performances and digital transmissions lies in which copyrights generate royalties and who collects them.

For traditional public performances, such as playing music in physical venues (bars, restaurants, shops) or broadcasting over terrestrial AM/FM radio, only the musical composition (the underlying lyrics and melody) earns a performance royalty. These royalties are collected by Performing Rights Organizations (PROs) like ASCAP, BMI, SESAC, and GMR, which pay the songwriters and publishers. In these traditional scenarios, performing artists and record labels do not earn performance royalties for the sound recording itself.

However, for digital audio transmissions (such as non-interactive internet radio, satellite radio like SiriusXM, and Pandora), the law establishes an additional right to perform the sound recording publicly. This means that during a digital broadcast, both the musical composition and the sound recording generate performance royalties. For these digital streams, platforms must get a statutory license and pay digital performance royalties to SoundExchange. See more: "What is Performing Rights Organizations (PROs)"

The direct licensing exception - Can you bypass the PROs?

While PROs are the standard mechanism for performance royalties, they are not the only legal avenue. In the U.S., when a songwriter or publisher affiliates with a PRO like ASCAP or BMI, they typically do so on a non-exclusive basis. This means copyright owners retain the right to license their works directly, outside of PRO administration and directly negotiate a Public Performance License with a music user. If a direct license is executed, the publisher simply notifies their PRO to exclude those specific uses from their blanket license collection, ensuring the user isn't charged twice and avoiding false infringement claims.

In the global music business, relying on PROs' international reciprocal agreements can sometimes be inefficient, resulting in lost or delayed royalties. To maximize revenue, a foreign publisher might partner with a local sub-publisher (such as EMVN in Vietnam, Thailand and Indonesia) to handle direct licensing in a specific territory. The publisher will then instruct their home PRO to strictly exclude that territory from their collection mandate. The local sub-publisher directly grants users a combined license (often bundling Sync and Performance rights), streamlining the process for creators and businesses.

The boundaries: dramatic performances (grand rights)

It is important to note here that the standard performance licensing of musical works (compositions) administered by PROs does not include dramatic performances, such as in the case of musical theatre, operas, or ballets.

These theatrical uses are called "grand rights." Grand rights fall outside the scope of blanket PRO licenses and must be licensed separately, often requiring direct negotiation between the copyright owner (the publisher or composer) and the licensee (the theatre producer). See more: "Grand rights and Small rights?"

The transmit clause & broadcast mediums

Furthermore, Section 101(2) contains what is commonly referred to as the Copyright Law's "Transmit Clause." It states that a work is performed publicly when a party transmits or communicates it "to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times."

This clause deals directly with broadcast mediums such as radio, television, and the internet. It is essentially what gives PROs the legal ability to collect royalties from broadcast entities, ensuring creators are protected in the digital broadcasting age.

Real use cases

Commercial environments: A restaurant, hotel, gym, or department store playing background music to enhance the customer experience must secure Public Performance Licenses.
Broadcasters & Digital platforms: Traditional radio stations, TV networks, and internet streaming platforms must secure Public Performance Licenses under the Transmit Clause to legally broadcast music to the public.

Consequences of not getting license

If a business owner fails to secure a Public Performance License, PROs protect creators' rights by monitoring music usage, often through digital tracking and reporting systems, and can take legal action when unlicensed uses are identified. Distributing or performing other people's music publicly without permission is a direct violation of federal law. If taken to court, copyright infringement penalties can be financially devastating, far exceeding the cost of simply purchasing the annual blanket licenses from the PROs.

Conclusion

The Public Performance License is the heartbeat of passive income for songwriters and publishers. It ensures that the creators behind the music are fairly compensated whenever their work is communicated beyond a private home, whether via a loudspeaker in a cafe or a digital broadcast over the internet.

While navigating the alphabet soup of PROs (ASCAP, BMI, SESAC, GMR) and SoundExchange might seem daunting, obtaining the proper blanket licenses, or strategically utilizing direct licensing through sub-publishers, is a strict legal necessity. Doing so shields you from harsh infringement penalties and ethically supports the creative ecosystem that makes your commercial environments vibrant and engaging.

What is Public Performance License?