Subject to a few exceptions, it is just plain ol’ copyright infringement to play live or recorded music in a restaurant, bar, or retail store unless the business has the right license. Period. Full stop. Wait. What? Why? Songwriters and publishers (often record labels) own the exclusive rights for their songs to be performed in public. So when Beers & Stuff hires a garage band to play cover tunes, that’s a public performance. And when Candles & Whatnot plays recorded music –– .mp3s from an iPhone, CDs, etc. –– through its house sound system, that’s also a public performance.
“But why do I care?” you might ask. Here’s why. There are three main Performing Rights Organizations (“PROs”) –– BMI, ASCAP, and SESAC. PROs collect public-performance royalties for songwriters and publishers. As part of their collection efforts, PROs send anonymous folks to bars and restaurants. They’ll note every song they hear, then check to see whether the establishment has the right licenses for those songs. Playing an unlicensed song will cost the business owner between $750 and $30,000 per song –– and up to $150,000 per song if the infringement was willful. That will put Mom & Pop’s Coffee Klatch out of business in a hurry. There are several real-world examples here.
If you own a shop where music is played for the public, do yourself a favor and talk to a lawyer. (By the way: Free Bird was written by Allen Collins and Ronald VanZant. The publisher is Songs of Universal Inc., and the PRO for that song is BMI.)