A good playlist is like the secret sauce to a bar: it makes guests stay later, order more, and return often. A bad playlist can leave them feeling uncomfortable or sleepy.

But be careful to use music with the right licenses! Some bars risk being hit with expensive demands from PROs for playing unlicensed songs.

Know the Law

Music is one of the most important aspects of your bar. The right tunes can set the mood and even increase drink sales. So before you hit play on your world-class playlist, it’s essential to understand the basics of bar music licensing.

Performing Rights Organizations (PROs) like ASCAP, BMI and SESAC handle licensing copyrighted music for bars. PROs collect fees and distribute them to the artists who own the rights to their music. While many business owners assume they can use consumer music services for their business without paying any PRO fees, these licenses are for personal, home use and do not include commercial use.

Many bar owners are surprised to learn that playing AM/FM radio or a non-digital jukebox does not exempt you from paying PRO fees. The fees vary by square footage and other factors, but you can expect to pay at least $370 yearly for a BMI and/or SESAC license.

Not paying PRO fees can open your business to costly legal claims from the songwriters and artists whose music you use for your business. Fortunately, a licensed bar music service can cover all your ASCAP, BMI and SESAC fees for less than $470 annually. The legal risks of playing unlicensed music are far too high to ignore.

Know Your Rights

Whether you’re a bar owner or a musician, knowing your rights regarding music licensing is important. If you play copyrighted songs in your restaurant or bar without the proper licenses, you can receive fines from music rights organizations such as BMI, ASCAP, and SESAC. These organizations often send representatives to bars and restaurants posing as customers, who stay for several hours and take notes on what music you’re playing (live or recorded) that’s not licensed.

If you play CDs or use a personal streaming service such as Spotify in your bar, that’s illegal, too. You need commercial music licensing, which includes performance royalties for artists like Aerosmith and Zappa, from a PRO to play your music legally.

One way to avoid this is by only hiring local, independent musicians who perform their original music. Suppose you’re considering hiring a band to play covers at your bar; work with an attorney to create a contract that spells out what’s allowed and not allowed. For background music, consider using a commercial streaming service that bundles the performance rights fees for ASCAP, BMI, and SESAC into your monthly service cost. This is a much easier and safer route than risking an expensive fine. 

Know Your Music

Music is integral to most bars’ ambiance and can greatly influence customers’ moods. It also can directly affect sales by influencing how long people stay in your establishment and what they buy. For example, studies show that slow-tempo music increases drink and dessert sales by 40 percent.

Whether you have live bands or play music, there are many things to remember when selecting the right piece for your business. The first is ensuring that the band you hire has an appropriate musical genre to fit your bar’s demographic. You can usually tell if a band fits your venue by asking to see their performance in action. If they are playing a show nearby, you should visit them to experience their vibe before hiring them.

In addition, if you use any music in your establishment, you must have the proper licensing to do so legally. This includes paying fees to performing rights organizations such as BMI, ASCAP, and SESAC.

A savvy option for bar businesses is using a music solution service that offers a business account with streaming services and tailored playlists for your specific restaurant concept and brand while managing all licensing fees on your behalf. This can save you both time and money.

Know Your Audience

Music can have a powerful effect on customer behavior and sales. One study found that customers were likelier to buy French wine when a wine shop played French music. The same principle applies in your bar: the music you play can influence how long patrons stay, what they order to eat or drink, and how much they spend there.

Knowing your audience is important to ensure the music is appropriate and legally compliant. Tens of thousands of restaurants and bars illegally play music without proper licensing. While only a tiny percentage get caught, those who do are subject to legal claims by the PROs (performing rights organizations) like BMI and ASCAP, which could be very costly.

You can avoid these costs by using a licensed streaming service that pays the PRO fees for you. These services also offer a subscription plan to stream music on demand without those pesky commercials.

Another option is to stick with original content only and work with local musicians who have purchased their own PRO music licenses. This approach has a downside: it doesn’t allow for live bands and DJs or charge a cover.