Under UK (and European) law, any business intending to play music must obtain certain licenses. This guide aims to explain the licenses required in the UK, and the basics of what they allow.
A musical recording is an item of 'intellectual property', and is therefore subject to copyright law. In order to make it easy for businesses to obtain permission to play recordings, there are collection agencies to whom the copyright owners assign the rights to their music. These agencies are not-for-profit organisations that give permissions on behalf of their members, and collect 'royalty' payments in the form of license fees. These fees are passed back to the members less costs, and that is how the members earn a living.
The two agencies that most businesses in the UK are likely to deal with are PRS (Performing Rights Society), who represent the composers/writers and publishers, and PPL (Phonographic Performance Limited), who represent the record labels and recordings artists. These organisations hold the rights to virtually every recording that you are likely to hear, including the music played on the radio. As the two organisations cover different rights, both licenses are generally required.
The licenses allow a business to play the radio, tapes, CDs (those bought legitimately) and systems provided by licensed music suppliers. A supplementary license (costing at least £250 extra) is required to use i-pods or other mp3 players. These licenses do not allow businesses to play music using their own PC, unless it is downloaded from a site licensed to provide music to businesses, such as music4Uonline.com.
If a business is caught playing music without a license, the basic penalty is that you must pay for next year's license, regardless of whether you want it, plus a 50% surcharge. However, the copyright bodies can choose to back-date charges to the date you started your business, or even bring court charges. Is it really worth the risk to save a few pounds?