Playing music in your business in Canada: licence guide

A streaming account is not a business licence

Being able to hear a song online does not mean you may play it to your customers. Consumer streaming services, video platforms and music stores license their content for personal listening. Their terms of use typically limit you to personal, non-commercial use, which leaves out playing music in a café, a shop or a hotel lobby.

The same applies to a CD or a file you have bought. Buying a copy gives you the copy, not the right to perform the music in public. When music plays on premises open to customers, whether a restaurant dining room, a retail floor, a reception area or a gym, it is a performance in public, and under Canadian law that is a separate right that needs its own permission.

What the Copyright Act says

The Copyright Act (R.S.C. 1985, c. C-42) gives the owner of copyright in a musical work the sole right to perform the work, or any substantial part of it, in public (section 3(1)). Playing recorded music on business premises where customers can hear it is a performance in public, so it requires the permission of the rights holders unless a specific exception in the Act applies.

In practice, much of this permission is managed collectively. Under Part VII.1 of the Act, a collective society may file a proposed tariff with the Copyright Board of Canada, an independent federal tribunal. The Board examines the proposal, may change it and, once it is approved, publishes the tariff in the Canada Gazette. An approved tariff sets the royalties and the terms and conditions for the uses it covers. The society may collect those royalties and, if they are not paid, recover them in court (section 73). A society may also negotiate agreements directly with users (section 67(3)).

Collective societies must answer, within a reasonable time, all reasonable requests for information about the works in their repertoire (section 67.2). Approved tariffs can be searched in the Board's database of decisions and approved tariffs.

Two layers of rights, usually two licences

Every piece of recorded music carries two distinct layers of rights:

• The musical work: the composition and the lyrics, owned by songwriters, composers and music publishers. The right to perform the work in public comes from section 3 of the Act. In Canada it is administered mainly by one collective society that represents authors, composers and publishers.
• The sound recording: the particular recording, involving the performers and the maker (usually the label or producer). Under section 19, performers and makers of a published sound recording are entitled to equitable remuneration when it is performed in public. The Act directs these royalties to the collective society authorized to collect them, and they are then divided equally between performers and makers.

A business that plays commercially released music therefore usually deals with two societies and two separate tariffs: one for the works and one for the recordings. The two societies have created a joint licensing body, so for many business uses both licences can be obtained in a single transaction. The underlying rights and tariffs remain separate.

Some activities are covered by tariffs of their own, for example music for dancing, fitness classes, receptions and events, or music on hold. A gym that runs classes to music, or a restaurant that hosts events, may need more than a background music licence.

What the fees are based on

There is no single price for playing music. Each approved tariff sets its own formula. For background music in Canadian businesses, the factors used include:

• the area of the establishment, or of the part open to the public, in square metres or square feet;
• the number of days of operation on which music is played;
• the capacity of the venue or the attendance, where area is not used;
• whether the business is seasonal and open only part of the year;
• the type of use: background music, dancing, fitness classes (often calculated by room and number of participants), events or music on hold;
• the number of locations, since each location is generally treated as a separate establishment.

Tariffs usually include an annual minimum per establishment, require you to report the information used to calculate the royalties, and allow the society to audit your records, which you may have to keep for several years. Late payments can carry interest.

Rates are reviewed regularly. Societies file proposed tariffs for future periods, and the Board's approval can come after the period has started, so amounts may be adjusted retroactively. Because the musical work and the sound recording are licensed separately, you may owe royalties to more than one society. For current amounts, check the approved tariffs published by the Copyright Board or ask the society concerned.

Playing music without a licence

Performing protected music in public without permission is copyright infringement. Under section 34 of the Act, the rights holder may seek an injunction, damages and an accounting of profits. Under section 35, an infringer pays the losses caused, plus any profits not already taken into account; the rights holder only has to prove the revenues, while the infringer must prove each cost it wants deducted. In court, copyright is presumed to exist and the author, performer or maker is presumed to be the owner unless the contrary is shown (section 34.1).

Instead of actual damages, the rights holder may choose statutory damages (section 38.1). For commercial infringement these are set per work, within a range fixed by the Act. Where a collective society claims for the public performance of music covered by an approved tariff and the royalties have not been paid, statutory damages are between three and ten times the applicable royalties. Courts consider good or bad faith, the conduct of the parties and the need for deterrence, and exemplary or punitive damages remain possible.

A society can also collect unpaid tariff royalties directly and ask a court to order compliance with the tariff (sections 73 and 73.1). Paying, or offering to pay, the royalties set by an approved tariff bars infringement proceedings for the acts the tariff covers (section 73.3).

The Act also contains offences. Knowingly causing a work to be performed in public for private profit without the owner's consent is an offence under section 42, and section 43 contains a specific offence for knowingly performing a musical work in public for private profit without written consent. Both require knowledge.

How a directly licensed catalogue works

A tariff covers the repertoire of the society that filed it. Music whose rights holders have not entrusted it to a society can be licensed directly by those rights holders, under a contract. A directly licensed background music catalogue works this way: the provider owns or controls the rights in the music and grants your business permission to play it.

What a direct licence covers depends entirely on its terms. It normally covers only the provider's own catalogue, played through the provider's service. It does not cover:

• radio or television played on your premises;
• live musicians, DJs or performances at events;
• music from other services, your own playlists, CDs or downloads.

One point deserves particular attention in Canada. The section 19 right of performers and makers of published sound recordings is a right to be paid, collected through a collective society, rather than a right to authorize or refuse. Whether it arises for a given recording depends on the criteria in section 20, such as the nationality or headquarters of the maker and the place where the recording was made. When you compare music providers, ask each one how this remuneration right is handled for its catalogue and ask for the answer in writing.

Keep the licence certificate and your subscription records for each location. If someone asks what music you play and on what basis, these documents answer the question. You can also ask a collective society whether particular works are in its repertoire.

What Mublic offers

Mublic's catalogue is produced by Mublic and is not part of the repertoire of any collective society. The licence to play it in your business is included in the subscription.

• Music suited to your sector, with an atmosphere that changes through the day, from a quiet morning to a busier evening.
• Each zone, such as a dining room, a terrace or a shop floor, has its own player.
• Tracks are downloaded in advance, so playback continues if the internet goes down.
• Each location receives a licence certificate with a QR code that shows the current status of the licence.
• In-store announcements can be added to the music.
• A 7-day trial with no credit card. The trial does not include a licence certificate; the certificate is issued with a paid subscription.

The Mublic licence covers only the Mublic catalogue. If radio, TV, live music or another service plays in your venue, that use is outside its scope and has to be licensed separately. You can see pricing, start a trial or set up your locations.