Entertainment is an important part of the bar experience nowadays. People are looking for more and more wholesome experiences when they go out, especially when coming out of this long period of quarantine. And since you've landed here, I guess you are considering or installing karaoke at your bar, restaurant, or venue, and you want to understand the licensing side of the business. Welcome welcome!
Indeed, music and karaoke licensing in the USA are complicated. And yes, you do need to obtain a license to have karaoke in your bar or venue. Actually, you need to have a license to play background music or host dance nights, live music or DJs at your establishment. In this article, however, I will attempt to give you the 101 of karaoke licensing and make it as simple as possible. Let's get to work!
Quick note: This article isn’t legal advice. Please talk to an attorney for the sake of your business.
2 things you need to run karaoke: legal karaoke content and public performing rights
Legal karaoke content (meaning legal karaoke songs)
First things first, karaoke songs are not original recordings of the songs. They are, in fact, reproductions produced by karaoke companies and producers. For a detailed explanation of how karaoke songs are made, feel free to read this educative blog post by Luca Gargano, a musician, veteran KJ and Director of the world renowned Karaoke World Championships.
By law, you cannot play karaoke tracks from Youtube or from your normal karaoke discs for your karaoke nights at the bar or business establishment. Those mentioned media are for your private usage only.
Karaoke hosts and karaoke venues often had a hard time purchasing legal karaoke content as the options are limited in the States due to (again) lengthy and complicated legal issues to produce karaoke tracks. Fortunately, there are now karaoke subscriptions like Singa Business that provide fully-licensed karaoke songs for commercial use. If you are to hire a KJ, make sure that their content is legal, too.
With the legal karaoke content taken care of, let's move on to the second matter: the public performing rights for bars, restaurants and venues.
Public performing rights for bars and venues
According to the US copyright law, a music “public performance” refers to any music played outside one's normal circle of friends and family. When talking about public performing rights, we most commonly talk about the PRO's (Performing Right Organizations) who govern these rights.
In the USA, PRO's are organizations that oversee music license fees for most artists. Bars as well as venues must pay PRO's for a license to offer karaoke at the establishment. Based on a venue’s square footage and other factors like if it is a single unit versus multiple unit operation, the number of nights karaoke is run, PRO's will calculate your license fee.
There are 4 big names in the PROs world: Broadcast Music Inc. (BMI), American Society of Composers, Authors and Publishers (ASCAP), Society of European Stage Authors and Composers (SESAC), and Global Music Rights (GMR). Each PRO represents different artists, and you can check this information out on their websites. You will need to decide if you need only one PRO or several of them.
Is karaoke expensive for bars and venues then?
While bars and venues will need to pay extra to have karaoke legally at their place comparing to offering just background music, the costs are outweighed by benefits.
Customers are demanding nowadays, and simply offering them some background music won't cut it. Karaoke is a trendy, easy and cost-effective entertainment option (when done right). It draws people in earlier, encourages them to stay longer and spend more on food and beverage. Offering karaoke occasionally could help boost a bar's or venue's sales up to 40% (head to Singa's website to download the whitepaper).
More importantly, paying your PRO's licensing fees will save you from costly lawsuits for copyright infringement later on. Lawsuits by PROs have been known to rack up millions of dollars and drove many bars out of business. With each musical composition used illegally, the bar or venue will be fined between $750 to $30,000 (or more if the infringement is found to be willful). Do you want to risk it?
Respect the artists, stay on the right side of the laws, and enjoy your karaoke!