Music in Business Premises 2025

Music as a legal obligation in the business environment

The use of background music in commercial establishments, although often perceived primarily as a marketing tool, inevitably entails specific legal obligations. Once an entity decides to make music publicly available, it becomes a user of that music within the meaning of copyright law, which implies a legal obligation to settle copyright. Ignoring this obligation can lead to serious legal consequences, including claims for unjust enrichment and penalties.

Author of the article: ​ARROWS (Mgr. Jan Pavlík, office@arws.cz, +420 245 007 740)

Basic principles of copyright and related rights

The Czech Copyright Act No. 121/2000 Coll. protects original works expressed in an objectively perceptible form. In the field of music, this protection applies both to the musical composition itself (lyrics and musical accompaniment), the rights to which belong to the composers and lyricists, and to the sound recording (the “master recording”), the rights to which belong to the performers and producers of the sound recordings. Property rights last for the lifetime of the author and for 70 years after their death. Any making available of copyright-protected works to the public without prior consent, i.e. without a valid license, is prohibited in the Czech Republic and may have serious legal consequences.

Given the complex nature of music copyright, where a single song may involve the rights of several entities, it would be administratively unfeasible for an ordinary business to obtain individual licenses from each individual rights holder for each song played. This legal complexity is the fundamental reason for the existence and necessity of collective copyright administrators such as the Copyright Protection Association (OSA) and INTERGRAM.

Key players in collective management: OSA and INTERGRAM

In the Czech legal environment, the two main entities entrusted with the collective management of copyright and related rights are OSA and INTERGRAM. Their legal mandates and the scope of entities they represent differ significantly.

The Copyright Protection Association (OSA)

OSA is a civic association that is legally authorized to collectively manage copyrights to musical works (composers, lyricists, publishers). It represents thousands of Czech and foreign authors. It grants licenses for a wide range of public uses of music and distributes the collected funds to authors in a transparent manner. OSA's activities are supervised by the Czech Ministry of Culture and international organizations.

INTERGRAM

INTERGRAM is an independent, non-profit organization operating as a registered association established by the rights holders themselves – performing artists and producers of sound and audiovisual recordings. Its main mission is to collect remuneration for the public use of recorded performances and sound or audiovisual recordings, for example in radio and television broadcasting or in so-called public productions. INTERGRAM does not generate profit; all collected remuneration, after deduction of administrative costs used to finance the organization's activities, is sent directly to the rights holders.

Legal consequences of different mandates and unification of the licensing process

The fundamental difference between OSA and INTERGRAM lies in the scope of entities they represent and the types of rights they administer. OSA administers rights to musical works, while INTERGRAM administers rights related to copyright.

For the legal use of music in a business, it is therefore necessary to obtain consent (a license) from both groups of rights holders. In order to simplify administration, a single collection point was established on January 1, 2018, for the area of so-called public performances, where OSA acts on behalf of other collective administrators (INTERGRAM, DILIA, OOA-S, and OAZA). Operators can thus conclude a single license agreement through OSA that covers the rights of all these administrators.

Public performance of music: Legal definition and risks

The obligation to pay fees for the use of music in a business premises depends on the precise legal definition of “public performance” and “user” in the context of copyright law. Understanding these terms is crucial for every entrepreneur, as their incorrect interpretation can lead to serious legal disputes.

Definition of “public performance” and “user” according to copyright law and case law

“Public performance” means any making available of music, video clips, or other audio-visual recordings in a public space that is not for private purposes. A “user” is anyone who makes the above-mentioned objects of copyright protection available in their business premises or outside them, if access is made available to the public.

The definition of “public performance” is not always straightforward and may be subject to judicial interpretation. For example, music played for employees in an office where several people are present is considered public performance and is subject to fees. Court rulings, including those of the Constitutional Court, emphasize that it is necessary to assess whether the music actually contributes to the commercial purpose of the establishment and whether it is accessible to an “individually indeterminate number of persons.” This complexity requires individual assessment and, in borderline cases, legal consultation.

Specific examples of establishments subject to fees and risks of non-compliance

The obligation to pay copyright fees applies to a wide range of commercial entities. The most common types of establishments include: restaurants, shops, and service establishments, accommodation facilities (including hotel rooms with TV), entertainment and sports facilities, and public spaces and events (e.g., means of transport, festivals, corporate events). The obligation to pay also arises when music is played to employees in offices if two or more employees are present.

Failure to comply with the obligation to settle copyright may have serious legal consequences. OSA carries out 150-200 checks per month. If a copyright infringement is found, the operator may be required to pay unjust enrichment, which is calculated as twice the normal copyright fee. In addition, the unauthorized use of a copyrighted work may be classified as a misdemeanor with a fine of up to CZK 150,000. In serious cases, it may even constitute a criminal offense of “infringement of copyright, rights related to copyright, and database rights,” which is punishable by a fine, forfeiture of property, or imprisonment for up to two years. If the perpetrator has gained significant benefit (at least CZK 10,000,000), the penalty may be higher – up to five or even eight years' imprisonment. Long-term litigation and astronomical fines are a real risk.

The difference between license fees and copyright royalties: A common misconception with serious consequences

It is a common and widespread misconception that the payment of license fees for radio or television in a business premises covers all obligations related to the playback of music. However, this notion is legally incorrect.

License fees are mandatory payments required by law for the ownership and operation of radio and television receivers and are used to finance Czech Television and Czech Radio. In contrast, copyright royalties (OSA/INTERGRAM licenses) are paid for the use of copyright-protected works in public spaces. This is not a double payment for the same type of use, but a payment for different ways of making the work available. Music in a business establishment has an undeniable influence on customers—it affects purchasing behavior, can have a positive impact on sales, strengthens the positive perception of the brand, and improves working conditions for employees. The license fee is therefore a payment for the added commercial value that music brings to the business.

Licensing process: Simplification and legal aspects

The system for obtaining licenses for public performance of music in the Czech Republic has undergone significant changes in recent years with the aim of simplifying the administration for entrepreneurs. However, despite this simplification, it is necessary to understand the legal aspects of the entire process.

Single collection point: OSA as the central point for most licenses

In order to significantly simplify the administrative burden on businesses, a single point of contact for public performances was introduced on January 1, 2018. The Copyright Protection Association (OSA) was appointed as the sole collective administrator acting on behalf of other collective administrators such as INTERGRAM, DILIA, OOA-S, and OAZA.

This means that for most types of establishments and public performances, it is sufficient to conclude a single license agreement through OSA. This agreement covers the rights of all the aforementioned collective administrators, which significantly simplifies the entire process for entrepreneurs.

Specific cases and exceptions: Areas of increased legal risk

Although a single collection point simplifies most processes, there are specific cases and exceptions that require special attention and often legal assessment:

• Live music: For live music, it is not necessary to obtain a license from INTERGRAM, but it is still necessary to obtain a license from the authors of the music or lyrics through OSA.
• Cinemas and theaters: The licensing of performances and recordings at theater and dance performances and in cinemas/theaters (before and after the performance) continues to be managed directly by INTERGRAM and is not covered by the OSA's single point of contact.
• Online services (YouTube, Spotify): The use of standard (personal) subscription services such as Spotify or Deezer for commercial purposes in establishments is against the law and is not a suitable solution unless a specific commercial license has been agreed upon. For the production of videos with music, it is often necessary to obtain a one-time consent from the author to include their music in an audiovisual work (a so-called synchronization license).

This overview shows that while the digital transformation has simplified the licensing process for traditional public productions, there are still gaps and specific requirements for newer digital forms of music use. Entrepreneurs should be cautious and seek professional legal advice in case of uncertainty to avoid potential problems.

Fee schedules: Complexity and factors affecting the amount of the obligation

The amount of remuneration for granting a license to use music is primarily determined by the type of public performance and is calculated on the basis of detailed fee schedules issued by OSA and INTERGRAM. These fee schedules take into account various factors to ensure that the remuneration best reflects the commercial value of the music for the establishment in question.

Factors determining the amount of remuneration and their legal relevance

Key factors influencing the amount of fees include:

• Type of establishment: Different rates apply to restaurants, shops, hotels, offices, fitness centers, discotheques, means of transport, etc.
• Size of municipality/location: Fees often vary depending on the number of inhabitants in the municipality.
• Scope of use and technical equipment: This includes factors such as the number of televisions or radios, the number of speakers, or the area covered by the sound system.
• Commercial benefit and capacity: For live music events or concerts, fees are based on total ticket sales or the capacity of the event.
• Average membership price: For fitness centers, the rate is influenced by the average price of club membership.
• Frequency of production: Discounts may be available for repeat productions.

This fee structure reflects the principle that fees are proportional to the economic benefit that the entrepreneur derives from the use of music. The greater the potential reach of the music or the more it contributes to profits, the higher the fee is usually.

Conclusions and recommendations: The need for legal caution

An analysis of the OSA and INTERGRAM fee and licensing system for businesses in the Czech Republic reveals a complex but evolving legal and administrative framework. The key findings and recommendations can be summarized as follows:

1. The legal nature of music in business: Music played in a business establishment is not mere background noise, but is subject to copyright, the use of which is regulated by law. Its use generates legal obligations, the disregard of which can lead to significant financial and reputational risks.
2. The necessity of collective management and its dual nature: The existence of collective management organizations is systemically necessary for the effective licensing and compensation of creators. Despite the introduction of a single collection point, it is important to note that businesses still deal with two different sets of rights—copyright (OSA) and related rights (INTERGRAM and others).
3. Critical interpretation of “public performance”: The definition of “public performance” is broader than is often assumed, and its correct understanding is key to avoiding legal violations. The case law of the Constitutional Court repeatedly emphasizes the need for individual assessment of each case and rejects blanket presumptions.
4. Risks and penalties for non-compliance: Unauthorized use of music may result in claims for unjust enrichment in double the amount, fines in the hundreds of thousands of crowns, and in extreme cases even criminal liability. Checks by collective administrators are regular and thorough.
5. Complexity of fee schedules: The amount of fees varies and depends on many factors that require careful analysis.

Recommendations for entrepreneurs:

• Proactive legal compliance: Do not wait for an inspection or litigation. Timely and proper settlement of copyright is essential for minimizing legal risks.
• Expert legal advice: Given the complexity of copyright law, the ambiguity of certain definitions, and the constant evolution of case law, it is essential to seek expert legal advice in case of any doubt. A lawyer specializing in copyright law will help you correctly assess your specific situation, interpret fee schedules and license terms, and thus minimize the risk of penalties and litigation.
• Thorough analysis of license terms: Even when using a simplified online process, it is essential to carefully review and understand all license terms, especially in specific cases such as the use of music from online streaming platforms.
• Alternative solutions with legal assessment: If you are considering using royalty-free music or services offering music with pre-cleared rights, always have a legal assessment carried out to ensure that such a solution actually covers all your obligations and that you avoid future disputes.
• Keep accurate records: Keep all license agreements, payment receipts, and relevant communications so that you can prove compliance with all obligations in the event of an audit or dispute.

By following these principles, businesses can ensure compliance with copyright law, avoid serious legal and financial consequences, and fully leverage the potential of music to grow their business. In the complex world of copyright law, legal certainty is invaluable.