Startup: Music in Restaurants

When music’s played in restaurants, it won’t make or break your place. Unless you’re playing music that doesn’t fit the mood of the place you’re operating (like hip-hop music in a formal restaurant), music is just a part of the total equation to your restaurant’s atmosphere.

Now, it can be pretty easy to get out your laptop or music player, get some speakers, and go nuts. But not so fast! There are some regulatory considerations you have to keep in mind if you want to play music in your restaurant.

One of the first things to know about playing music is that you have to pay the rights. If you just want to play the top 40 hits on Pandora, they in fact have a business plan. However if you want to curate your own playlist (which would be important if you’re running a specific concept like ethnic food), then you would have to pay a licensing fee to either BMI (Broadcast Music Incorporated)ASCAP (American Society of Composers, Authors, and Publishers), or SESAC (Society of European Authors and Composers). Each of these Performance Rights Organizations have different rates and different licensing rules, so you should read accordingly. After all, not all organizations have rights to the same music. And if you’re thinking of using TV or radio to play music, there’s rules for that as well.

Another thing you have to keep in mind is that yes, this public music licensing is pretty heavily enforced. Being fined at around $30,000 might not sound much at first glance (especially since copyright infringement lawsuits usually go for much higher than that). But for restaurant owners, that could be as much as their entire assets. This is especially a problem if you choose to do live music in a band, which in that case penalties can go as much as six figures per song. It looks like ultimately, it seems to be on the safe side to pay the licensing fee the first time.

And finally, the last thing you have to consider about is that it might not be worth it. There’s a lot of psychological interest on the impact of music in restaurants (Thrillist has a good article about why music in bars work). But the budget’s tight or if people don’t mind the lack of music in the restaurants, then it might be perfectly all right to save a few grand a year and not play music at all. When there’s growing pains about bad music in restaurants, maybe silence is all we need. Restaurants are about food, after all.