Most
musical compositions and associated
sound recordings (phonograms) used as hold music are protected by copyright. Transmitting a piece of music over a telephone line is considered a "public performance" of both the musical work and the sound recording under United States copyright law, so permission from the copyright owners is generally required. Commercial music services provide hold music to businesses, ensuring that the musical works and sound recordings are properly licensed. In the United States,
performing rights organizations (PROs) such as ASCAP, BMI, SESAC, and GMR administer
public performance rights for millions of musical compositions on behalf of their copyright owners (
songwriters and
publishers). These PROs sell
blanket licenses which allow business customers to play any musical works included in their catalogs. Additionally, a
mechanical license may be required to reproduce the musical work, i.e. to upload a copy of it to the phone system used by the business.
Royalty-free music may be used instead. Permission is also required to use a particular sound recording of a musical composition, since the copyright owner has the right to authorize public performance of the sound recording "by means of a digital audio transmission." Commercial music services pay royalties to sound recording copyright owners through an organization known as
SoundExchange. Any person or business wishing to use current, popular, post 1900–1910, copyrighted music for MOH purposes may only lawfully do so by obtaining permission from the owner. Currently, performance rights societies such as ASCAP, BMI, and SESAC will sell blanket permission to use music titles in their catalog for MOH purposes. for an express annual fee, calculated by size and frequency of usage. Failure to obtain this paid permission is a violation of US copyright laws. This same copyright protection is also true in the rebroadcast of any radio program. As mentioned earlier, the broadcaster has been assigned a narrow and specific usage license to air copyrighted song titles. This does not include permission to any person or business to re-broadcast that program on telephonic MOH. The broadcaster may not promote such unlawful use and is not an owner who has any lawful right to grant MOH usage permission. They do not hold the ownership of the title and have no right to license use in any way. Those who plug radio broadcast into their telephone MOH without first obtaining paid permission through the owner's agents (ASCAP, BMI, or SESAC) may be in violation of copyright law and may be prosecuted under existing federal laws.
Mechanical copyright A second copyright exists when it comes to licensing use for telephonic MOH. A piece of music, as mentioned above, is copyrighted and may be licensed for use as a music title and is understood to be a combination of melody, harmony, and, where applicable, lyrics. However, neither radio listeners nor MOH listeners could hear this music unless it was recorded, providing a delivery medium whereby the "music" becomes a "performance". As mentioned elsewhere, in countries such as the US, where said copyright laws are enforced, nearly every recording of a song title holds its own "mechanical copyright". For most of the 20th century, music was recorded in studios, produced by record company executives, producers, arrangers, and engineers who were hired to deliver the artist's finished recordings for mastering and duplication, for sale on various types of media: 78, 45, and 33 RPM vinyl; reel-to-reel; 8-track tape; cassette; and compact disc. To protect their investment, the record companies obtain a mechanical copyright in order to protect and control the recording with which they derive usage and sales income. For those still uncertain of the difference between "song title" and "mechanical" copyrights, consider the
Capitol Records lawsuit for copyright infringement against
Nike in 1987. Nike legally obtained permission to use
the Beatles song title "
Revolution" from the title's owner,
Michael Jackson. They used the Capitol Records-owned recording of the Beatles' performance, but failed to obtain and pay for permission and use. Capitol Records sued and prevailed because Nike only had a license to use the title and did not have a license to use the mechanical recording. Therefore, persons or businesses wishing to play music that falls "in the public domain" are still legally required to obtain permission to use the mechanical recording of this music, from the mechanical copyright holder. Where the use is of copyrighted music, the same applies. In all cases, before a song title may be broadcast on a telephone MOH, said use must be approved and licensed from BOTH the "song title" copyright owner (if it is not in public domain) and the "mechanical" copyright owner.
Enforcement It is generally known within the on-hold industry that some
performance rights societies, with regional offices and staff, both monitor and prosecute persons and businesses that infringe on the copyright of title holders in their libraries.
ASCAP and
BMI are both aggressive about this, from time to time. It is not known whether any record companies are currently or actively monitoring and prosecuting violators of their mechanical license. ==Market==