Hidden Costs for Associations Playing Music or Movies in Common Areas

Many community associations provide for music and movies to be played in the common areas or common elements for the enjoyment of guests and residents. For instance, an association may play a series of songs over the stereo system at the association clubhouse dining facilities in hopes of providing a pleasant dining experience for residents and their guests. Another community may provide a similar environment for those entitled to use its gym facilities. Yet another community may schedule a weekly movie night for residents at no charge to those interested in attending. The foregoing scenarios are all too common throughout many community associations in Florida and may result in hidden costs to the associations in the event that the appropriate safeguards are not implemented.

Title 17 of the United States Code, known as the “Federal Copyright Act,” grants certain exclusive rights to the owners of copyrighted works, such as the right of a musical composer to “perform the copyrighted work publicly.” The term “perform” is defined in the Federal Copyright Act to mean “to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.” In addition, the Act provides that to perform the work “publicly” means “… to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”

In light of the foregoing and in accordance with other general provisions of the Copyright Act, it has been suggested that businesses broadcasting background music to the public must obtain a license to play such music. While there are exceptions to copyright infringement for small businesses, including restaurants, when they broadcast radio or televisions shows, the same businesses are not exempt from copyright infringement when they play music from devices such as tapes or compact discs. Based upon the foregoing, certain facilities that publicly play recorded music from devices such as compact discs must obtain a license from the songwriter or the songwriter’s agent to play such music.

Performing Rights orgs.jpgFederal copyright law permits a songwriter or his agent to grant permission to others to legally “perform” the songwriter’s copyrighted work “publicly” and thus avoid copyright infringement claims. These performance rights are generally licensed on behalf of copyright owners by business entities or associations known as “performing rights” societies. The three major performing rights societies recognized by the Federal Copyright Act are the American Society of Composers, Authors and Publishers (“ASCAP”); BMI; and SESAC, Inc. These societies may grant a license to commercial establishments to use the music in their repertoire through a licensing agreement. The license entitles the commercial establishment to play only the music in that society’s repertoire. Therefore, it may be necessary to enter into a licensing agreement with more than one society.

As an alternative to obtaining performance licenses from performing rights societies, commercial establishments may enter into an agreement with a commercial music services provider, which in turn enters into the licensing agreements with the performing rights societies. Under this arrangement, the commercial establishment only enters into one contract with the commercial music services provider and pays the provider for the privilege of playing copyrighted music rather than entering into licensing agreements with various performing rights societies.

Please note that Florida law imposes certain obligations on performing rights societies by statute, such as disclosure requirements that societies must meet when presenting proprietors with information on their services and requirements with which their contracts with proprietors must adhere. However, a discussion of these requirements is outside of the scope of this opinion. As such, it is advisable to have counsel for the association review any disclosures together with proposed agreements provided by a performing rights society prior to the association entering into any such agreement in order to determine whether they comply with Florida law.

Observance of the foregoing requirements may mean the difference between compliance with applicable copyright laws or committing potentially costly violations of such laws. Consult with your association legal counsel for an opinion as to your exposure if your community engages in activities or services such as those described above.