By Lisa Farris

For restaurants, the right music can set the perfect mood, enhance the dining experience, and even encourage customers to stay longer and spend more. In fact, 91 per cent of business owners agree that your playlist can make or break the customer experience, and a study involving a global restaurant chain revealed that sales jumped 9.1 per cent (with dessert purchases up 15.6 per cent) when the restaurant played a mix of hits and lesser-known tracks that fit the brand. But before you crank up the volume, it’s crucial to understand the legalities surrounding music licensing in Canada. Playing music in your establishment without the proper licensing can lead to hefty fines and legal troubles.

This guide breaks down everything Canadian restaurant owners need to know about licensing, helping you stay compliant, save money, and use music to drive sales strategically.

Understanding music licensing in Canada

In Canada, music is protected under the Copyright Act, which grants creators exclusive rights over the use of their work. When a restaurant plays music, whether recorded, live, or through streaming services, it is considered a public performance and requires licensing to ensure songwriters, composers, and performers receive fair compensation.

Failing to obtain the proper licenses can lead to legal action, fines, and even reputational damage. That’s why understanding the key players in Canada’s licensing landscape is essential.

Key Canadian Performing Rights Organizations (PROs)

Several organizations manage music rights in Canada. These organizations collect licensing fees and distribute royalties to artists, record labels, and composers. The primary PROs that restaurant owners need to know about include:

1. SOCAN (Society of Composers, Authors and Music Publishers of Canada)

SOCAN is the main organization responsible for collecting and distributing royalties for the public performance of musical works. If you play recorded or live music in your restaurant, you’ll likely need a SOCAN license.

2. Re:Sound

While SOCAN covers songwriters and composers, Re:Sound represents performers and record labels. If you play recorded music, you may need to pay fees to both SOCAN and Re:Sound.

What type of license do you need?

The type of music license your restaurant requires depends on how you plan to use music. Here’s a breakdown of common scenarios and their licensing requirements:

Background music

If you play recorded music as background ambiance, you need SOCAN and Re:Sound licenses. These fees vary depending on the size of your restaurant and the method of playback. However, it’s against the terms of service to stream music from a consumer platform like Spotify, Pandora, SiriusXM, or YouTube in a commercial setting. Instead, it’s essential to use a music for business streaming service.

Live music

If you host live performances, you’ll need a SOCAN license to cover the performance of copyrighted songs. If the live performance involves backing tracks or recorded elements, a Re:Sound license may also apply.

Televised or radio music

If your restaurant plays music from the radio or television, licensing fees still apply. While some cable or satellite providers cover public performance rights, you should verify with SOCAN and Re:Sound to ensure compliance.

Special events and cover charges

If you host ticketed events or charge cover fees for entertainment, different licensing rates may apply. Be sure to check with SOCAN and Re:Sound before hosting such events.

How to obtain a music license

While the easiest and least expensive method to getting licensed music for your restaurant is to use a business music streaming service, if you want to get direct licenses with the PROs, such as for live performances of copyrighted music, here are the steps:

Step 1: Determine your needs

Start by assessing how you use music in your restaurant. Are you streaming background music? Hosting live performances? Playing videos? Identifying your specific use case helps determine which licenses you need.

Step 2: Contact SOCAN and Re:Sound

Reach out to SOCAN and Re:Sound to discuss your restaurant’s music usage and obtain the correct licensing.

• SOCAN tariffs: Vary based on venue size and type of played.
• Re:Sound tariffs: Apply mainly to recorded music and are charged separately from SOCAN fees.

Step 3: Pay the licensing fees

After registering with SOCAN and Re:Sound, you’ll be required to pay licensing fees. These may be one-time payments or annual fees based on the type and frequency of music played.

Step 4: Keep records

Maintain copies of your licenses and payment receipts. This ensures you’re prepared in case of an audit or inquiry from a PRO.

How much does licensing cost?

The cost of licensing varies depending on several factors, including:

• The size of your establishment (measured in square feet)
• The type of usage (live, recorded, or background music)
• Whether there is a cover charge for events

For example, SOCAN charges a flat fee per square foot for background music, while live performances may have additional costs per event. To get the most accurate estimate, use the SOCAN and Re:Sound fee calculators on their websites or contact them directly.

How to save money on licensing

If you’re worried about licensing costs, here are a few strategies to help minimize expenses:

Use licensed services

Instead of risking fines and potential lawsuits, consider using business-friendly streaming services like Soundtrack, which include all licenses required for playing recorded background music in your business. These services include the required licensing fees for streaming music in a restaurant or other business so you can have peace of mind.

These services are typically also less expensive than direct licenses, and you don’t have to worry about reporting or other compliance steps.

Negotiate with PROs

If your restaurant has a seasonal operation or only plays music occasionally, discuss possible discounts with SOCAN and Re:Sound.

Limit usage in non-customer areas

If music is played only in certain areas (e.g., dining room but not kitchen), you might be eligible for a lower licensing fee.

Consequences of not having the proper licenses

Failing to obtain a music license can lead to serious consequences, including:

• Fines: Ranging from $100 to $20,000 per infringement under Canadian copyright law.
• Legal action: PROs regularly audit businesses to ensure compliance. If you’re caught without a license, you could face a lawsuit.
• Business disruption: Failing to comply could result in forced music removal or in extreme cases, even business closure.

Choosing the right music isn’t just about setting the mood, it’s a strategic decision that impacts customer experience, sales, and even legal compliance. By using a commercial streaming service, and obtaining any necessary licenses from SOCAN and Re:Sound, you protect your business, drive sales, support artists, and create a better atmosphere for customers.

With music from dedicated business services, you not only gain access to an unparalleled depth and catalog of music options (fully licensed for commercial use) but you can drive sales by choosing from over 1,500 playlists or simply build your own that matches your brand, improves your customer experience, and keeps guests coming back.

Lisa Farris is a Marketing & Digital Media Executive recognized for her innovative approach to leveraging music and technology to transform how brands, entertainment, and consumers engage, from startups to nationally recognized companies. Lisa serves as Chief Marketing Officer for Soundtrack: Music Streaming for Business. Previously, Lisa was Chief Marketing & Innovation Officer at the Recording Academy | GRAMMYs, driving brand growth and campaigns like Behind the Record. She is a thought leader featured in media outlets and podcasts including Retail Leader, The Business Side of Music, and Best Boss Ever.