The performing rights organizations, or PROs, which manage musical copyrights on behalf of their owners, request that businesses pay a licensing fee for playing in their shops musical recordings from the PROs repertoires.

Small mom and pop stores, for whom legal advice may be prohibitively expensive, must then decide whether to pay the PROs or disregard the letter and possibly face a court action for copyright infringement.

1) Section 110(5) exemption (“homestyle exemption”) Section 110(5) of the Copyright Act provides an exemption for the reception of radio or TV broadcasts in an establishment open to the public for business.[v] The purpose of the “homestyle” exemption is to release from copyright liability anyone who merely turns on, in a public place, an ordinary radio or television receiving apparatus of a kind commonly sold to members of the public for private use.

The basic rationale of this clause is that the secondary use of the transmission by turning on an ordinary receiver in public is so remote and minimal that no further liability should be imposed.

The exemption only applies to a single radio or television receiving apparatus of the type used in one’s home.

If the broadcast signal is received in an establishment of an area smaller than a certain gross square footage – less than 3,750 square feet for a food service and drinking establishment and less than 2,000 square feet for any other type of business – the law puts no limitation on the number of loudspeakers and TV monitors that may be connected to the receiving apparatus.[vi] Where the gross area of the business exceeds these minimums, the law imposes limits on the number of loudspeakers and TV monitors as well as on their placement and – in the case of audiovisual monitors – their size.

If the business switches to playing broadcast radio through one homestyle apparatus only, it may do so without risk of any copyright infringement liability.

In the case of a food service and drinking establishment of less than 3,750 gross square feet or of another type of business with an area of less than 2,000 gross square feet, the business may connect any number of loudspeakers or TV monitors to the receiving apparatus.

In contrast to an Internet radio service such as Pandora, satellite radio subscription for businesses is covered by the homestyle exemption.

Sirius XM for Business is a paid subscription service which handles copyright royalties for businesses.[viii] Through such a subscription, the business would avoid having to pay licensing fees to the different performing rights organizations.

Depending on the negotiated price, a company may be indifferent between paying to one performing rights organization and subscribing to satellite radio.