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GENERAL
Here at ONHOLD, we get a lot of questions about a business' right to use radio rebroadcast, commercial, pre-recorded CDs or tapes as a legitimate option for music-on-hold. In all cases we take several positions.
A) If a company prefers "music-only" to music and messaging, we can provide this, but also refer clients to "overhead-music" services or music in the public domain (which is not subject to copyright protection). B) We are not lawyers or a law firm and do not wish to give anyone legal advice. C) We fully recognize that music in the public domain does not entitle a business to use a recording without permission of the mechanical license holder (ie: the record company). D) We never assume that because a business may be using unlicensed (re: unauthorized use of) broadcast or commercially recorded music for the music-on-hold, that our ONHOLD services are a better alternative.
These are all factors better left considered and decided upon by you. ONHOLD is simply another alternative to consider . We provide direct-license music, not subject to ASCAP or BMI license and control. However, we do field many questions about the legality of using radio and commercially recorded music and we offer the following excerpts from articles and opinion of counsel which may answer questions you have. |
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Forbes Magazine, January 2, 1995
Hold That Music, Please!
Callers stay on hold longer when they have something to listen to, so more offices are playing radio or prerecorded songs. They may be breaking the law, warn the American Society of Composers, Authors, & Publishers (ASCAP) and Broadcast Music, Inc. (BMI).
"There are a lot of businesses using music-on-hold that don't realize they need to get permission from the songwriter," says BMI spokesman Steven Blinn. This permission ASCAP and BMI will gladly provide through licenses that can cost between $140 and $1200 a year. Or businesses can turn to services.... (sic).....which charge as little as $30 a month for licensed music. Under current federal copyright law, penalties can run as high as $20,000 per pirated song. |
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Corporate Legal Times, July 1993
Performance License a Bargain Compared to Music Infringement Suit
..........Under Title 17 of the United States Code, the Copyright Law, one who performs (or allows others to perform) copyrighted music in a public place is legally responsible for seeing to it that advance permission is obtained from the Copyright owners (songwriters and publishers) for those performances. By statutory definition, since a corporation or other company is a place where a substantial number of persons outside of a normal circle of a family and its social acquaintance is gathered, (17 U.S.C. Section 101) it is a public place for copyright purposes. Whether the performance is by the playing of a CD or tape, by a radio tuned to a particular station or via music-on-hold (which constitutes a public performance by virtue ot its being a transmission to (the public), permission must first be obtained in order for the use of that music to be lawful.
It should be noted that a company which allows a radio or television station to play throughout its premises over commercial equipment is also making a licensable public performance; the fact that the broadcasting station is licensed does not allow for further such public performances by one receiving those broadcasts. However, if such further broadcasts are over a "single receiving apparatus of a kind commonly used in private homes" without either a charge made for the transmission or its being "further transmitted to the public" 17 U.S.C. Section 110 (5) affords an exemption from copyright liability. Much litigation has ensued over the applicability of this exemption to particular users, with most courts determining that it is only intended for small establishments that do not have the ability to pay for music, even If they otherwise meet the statutory requirements. |
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August 1988 by Bernard Korman, General Counsel
ASCAP Memorandum
Re: Music-on-Hold Services
(excerpted)
This memorandum sets forth the legal authority holding that performances of copyrighted music by means of telephone "music-on-hold" systems require the permission of copyright owners.
"Music-on-Hold" is generally used to describe any system by which establishments or businesses provide musical entertainment for telephone callers who are placed "on hold." Such a system typically employs a radio receiver or tape recorder; some sort of amplification device; and telecommunications equipment, all or which enables the user to transmit to its callers recorded music or the broadcasts of a local radio station. The user controls the transmitting apparatus and selects the music or radio broadcasts to be heard by callers on hold.
Under the Copyright Law, the copyright owner of a musical work owns the exclusive right to perform the work publicly. See Section 106(4). [References are to sections of the United States Copyright Law, Title 17, United States Code.l Section 101 contains definitions pertinent to the performing right.]
Applying the quoted language in the case of music-on-hold, when the user employs tape-recorded music, he or she is transmitting the performances to his callers. And, when the user retransmits radio broadcasts for the entertainment of his or her callers, two separate public performances are taking place: the first occurs when the radio station transmits its broadcasts of copyrighted music to the general public; the 2nd performance occurs when the user receives the radio station broadcasts and retransmits those broadcasts via its music-on-hold system to callers. In either case, the music-on-hold user is "performing" and thus requires the permission of the copyright owners whose music is being performed.
There is a limited exemption for certain retransmissions of radio performances provided by section 110 (5), but it is in applicable in the case of music-on-hold performances. This exemption does not apply in the case of music-on-hold for several reasons. First, music-on-hold systems are radically different from "a single receiving apparatus or a kind commonly used in private homes"; they are receiving devices augmented by connection to sophisticated amplification and telecommunications equipment specially designed and used to retransmit the broadcasts over an unlimited number of remote receivers (i.e., the callers' telephones). See, for example, Merrill v. County Stores, Inc., 669 F. Supp. 1164 (D.N.M. 1987); Sailor Music v. The Gap Stores, Inc., 516 F. Supp. 923 (S.D.N.Y.), aff'd, 688 F.2d 84 (2d Cir. 1981), cert. denied, 456 U.S. 945 (1982).
Moreover, even if the receiving apparatus used by the business might be considered "a kind commonly used in private homes," the exemption would not apply, because, as the Copyright Law's definition of "transmit" makes clear, the radio transmissions are always "further transmitted to the public" via telephone lines.
Finally, the license agreements between ASCAP and radio stations specifically exclude any further transmission of the stations' broadcasts. Quite simply, this means that no radio station may represent to local businesses that its license agreement with ASCAP authorizes retransmissions of the station's broadcast by means of a music-on-hold telephone system.
To conclude, the relevant statutory language, the legislative history, and cases interpreting analogous provisions of the Copyright Law all make it clear that businesses which employ music- on-hold systems require proper authorization to perform copyrighted music lawfully. For works in the ASCAP repertory, that authorization may be obtained through an ASCAP license agreement. |
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For more information, or for help, please call us at 503-224-3766 |
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