Copyright laws determine what someone can do with copyrighted material. Several people or entities may have a copyright to a musical piece. The musical composer owns the copyright to the musical work; the lyricist owns the copyright to the song lyrics. The performing artist owns the copyright to the sound recording of their live performance, and the record label may own copyright in the sound recording. The copyright owners have the exclusive right to make copies of the recording, perform the music in public and distribute the recordings to the public. Anyone who wants to use copyrighted material in a public space--including background music in films, Websites, restaurants, lobbies, or any other place for public gathering--must obtain permission from the entity that controls the copyright.
When using an individual recording, voluntary licensing must be obtained. Individual recordings would likely be used for background music in films, television or online videos. A voluntary license is granted by the copyright owners, based upon an agreed upon fee, terms and conditions. For background music in restaurants, lobbies, workplaces, supermarkets or any other similar type of public place, business establishments must also obtain permission to play the recordings. Establishments can either get direct permission from the individual copyright holders or purchase a license from an organization, such as ASCAP (American Society of Composers, Authors and Publishers). An ASCAP license holder has the rights to play or perform any of the musical works in the ASCAP directory.
As of 2010, individuals who violate copyright laws can be fined as much as $250,000, and they're subject to up to five years in jail. Copyright violators could also be subject to civil action from the copyright owner. If any money was made from the copyrighted material--such as use in a commercially available movie--the copyright holder may be entitled to damages. Violators may also be ordered to remove copyrighted material from projects, or from playing it in a public place.