Music in Business Premises 2025

Fundamental Principles of Copyright and Related Rights

Given the multi-layered nature of music copyright, where a single song can involve the rights of several entities, it would be administratively unfeasible for an ordinary business owner to obtain individual licenses from each rightholder for every song played. This legal complexity is the fundamental reason for the existence and necessity of collective management organizations, such as Ochranný svaz autorský (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 rights related to copyright are OSA and INTERGRAM. Their legal mandates and the scope of the entities they represent differ fundamentally.

Ochranný svaz autorský (OSA)

OSA is a civic association legally mandated to collectively manage copyrights for 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 transparently distributes the collected funds to the authors. OSA's activities are supervised by the Ministry of Culture of the Czech Republic and international organizations.

INTERGRAM

INTERGRAM is an independent, non-profit organization, operating as a registered association established by the rightholders 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 performances. INTERGRAM does not generate profit; all collected remuneration, after deducting an administrative fee to finance the organization's activities, is sent directly to the rightholders.

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 manage. OSA manages rights to musical copyrighted works, while INTERGRAM manages rights related to copyright.

Therefore, to legally use music in a business establishment, it is necessary to obtain consent (a license) from both groups of rightholders. To simplify the administrative process, a single collection point for so-called public performances was established on January 1, 2018, where OSA acts on behalf of other collective management organizations (INTERGRAM, DILIA, OOA-S, and OAZA). This allows business operators to conclude a single license agreement through OSA, which covers the rights of all these organizations.

Public Performance of Music: Legal Definition and Risks

The obligation to pay fees for the use of music in a business establishment depends on the precise legal definition of "public performance" and "user" in the context of the Czech Copyright Act. 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 the Copyright Act and Case Law

"Public performance" means any communication of music, music videos, or other audiovisual recordings in a public space that is not for private use. A "user" is anyone who makes the aforementioned objects of copyright protection available in their establishment or elsewhere, provided that public access is enabled.

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 multiple people are present is considered a public performance and is subject to fees. Court decisions, including those of the Constitutional Court, emphasize that it is necessary to assess whether the music genuinely contributes to the commercial purpose of the establishment and whether it is accessible to an "individually undefined number of people." This complexity requires individual assessment and, in borderline cases, necessary 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: food and beverage establishments, shops and service providers, accommodation facilities (including hotel rooms with TVs), entertainment and sports facilities, and public spaces and events (e.g., public transport, festivals, corporate events). The obligation to pay also arises when playing music for employees in offices if two or more employees are present.

Failure to comply with the obligation to settle copyrights can have serious legal consequences. OSA conducts 150–200 inspections per month. If a copyright infringement is discovered, the operator may be required to surrender unjust enrichment, which is calculated as double the standard royalty fee.

Furthermore, the unauthorized use of a copyrighted work may be classified as an administrative offense with a fine of up to CZK 150,000. In serious cases, it may even constitute the criminal offense of "infringement of copyright, rights related to copyright, and database rights," which carries a penalty of a fine, forfeiture of property, or imprisonment for up to two years. If the perpetrator has gained a significant benefit (min. CZK 10,000,000), the penalty can be higher—up to five or even eight years of imprisonment. A prolonged court dispute and astronomical fines are a real risk.

The Difference Between Public Broadcasting Fees and Copyright Royalties: A Common and Costly Misconception

A common and widespread misconception is that paying public broadcasting fees (koncesionářské poplatky) for a radio or television in a business establishment covers all obligations related to playing music. However, this notion is legally incorrect.

Public broadcasting fees are legally mandated payments made for the ownership and operation of a radio and television receiver and are used to finance Czech Television and Czech Radio. In contrast, copyright royalties (OSA/INTERGRAM licenses) are paid for the use of copyrighted works in a public space.

Therefore, this is not a double payment for the same type of use, but rather payment for different ways of making a work available. Music in a business establishment has an undeniable influence on customers—it affects purchasing behavior, can have a positive impact on revenue, strengthens positive brand perception, and improves working conditions for employees. The license fee is thus a payment for the added commercial value that music brings to the establishment.

The Licensing Process: Simplification and Legal Aspects

The system for obtaining licenses for the public performance of music in the Czech Republic has undergone significant changes in recent years to simplify the administrative burden for entrepreneurs. Nevertheless, despite this simplification, it is essential to understand the legal aspects of the entire process.

The Single Collection Point: OSA as the Central Hub for Most Licenses

To significantly simplify administration for entrepreneurs, a single contact point for public performances was introduced on January 1, 2018. Ochranný svaz autorský (OSA) was designated as the sole collective management organization to act on behalf of other collective management organizations, 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 management organizations, which significantly simplifies the entire process for entrepreneurs.

Specific Cases and Exceptions: Areas of Increased Legal Risk

Although the 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; however, it is still necessary to obtain a license from the authors of the music or lyrics through OSA.

• Cinemas and theaters: The licensing agenda for the use of performances and recordings in theatrical and dance performances and in cinemas/theaters (before and after the show) continues to be managed directly by INTERGRAM and is not included under OSA's single contact point.

• Online services (YouTube, Spotify): Using standard (personal) subscription services like Spotify or Deezer for commercial purposes in business establishments is against the law and is not an appropriate solution unless a specific commercial license has been arranged. For the production of a video with music, it is often necessary to obtain a one-time consent from the author to include their music in the audiovisual work (a so-called synchronization license).

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

Fee Tariffs: Complexity and Factors Influencing the Amount of the Obligation

The amount of remuneration for granting the right to use music is primarily determined by the type of public performance and is calculated based on detailed tariffs issued by OSA and INTERGRAM. These tariffs take into account various factors to ensure that the remuneration best reflects the commercial benefit of the music for the given establishment.

Factors Determining the Amount of Royalties and Their Legal Relevance

Key factors that influence the amount of fees include:

• Type of establishment: Different rates apply to restaurants, shops, hotels, offices, fitness centers, discos, public transport, etc.

• Size of the municipality/locality: Fees often vary depending on the population of 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 sound-covered area.

• Commercial benefit and capacity: For events with live music or concerts, fees are based on total ticket revenue or the capacity of the event.

• Average membership price: For fitness centers, the rate is influenced by the average price of a club membership.

• Frequency of performance: Discounts may be available for repeated performances.

This tariff 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 profit, the higher the fee usually is.

Conclusions and Recommendations: The Necessity of Legal Prudence

An analysis of the system of fees and licenses from OSA and INTERGRAM for entrepreneurs in the Czech Republic reveals a complex yet evolving legal and administrative framework. The key findings and recommendations can be summarized as follows:

1. The Legal Nature of Music in Business: Music in a business establishment is not mere background noise but a subject of copyright, the use of which is subject to legal regulation. Its use generates legal obligations, and ignoring them can lead to significant financial and reputational risks.

2. The Necessity and Dual Nature of Collective Management: The existence of collective management organizations is systemically necessary for efficient licensing and compensation of creators. Despite the introduction of a single collection point, it is important to realize that entrepreneurs are still settling two different sets of rights—copyrights (OSA) and related rights (INTERGRAM and others).

3. Critical Interpretation of "Public Performance": The definition of "public performance" is broader than often assumed, and its correct understanding is key to avoiding violations of the law. The case law of the Constitutional Court repeatedly emphasizes the need for an individual assessment of each case and rejects blanket presumptions.

4. Risks and Penalties for Non-Compliance: Unauthorized use of music can lead to claims for unjust enrichment at double the rate, fines in the hundreds of thousands of crowns, and in extreme cases, criminal liability. Inspections by collective management organizations are regular and thorough.

5. Complexity of Tariffs: The amount of fees is variable and depends on many factors that require careful analysis.

Recommendations for Entrepreneurs:

• Proactive Legal Compliance: Do not wait for an inspection or a lawsuit. Timely and proper settlement of copyrights is fundamental to minimizing legal risks.

• Expert Legal Consultation: Given the complexity of copyright law, the ambiguity of some definitions, and the continuous development of case law, it is essential to seek expert legal assistance in case of any doubt. A lawyer specializing in copyright law will help you correctly assess your specific situation, interpret tariffs and license conditions, and thus minimize the risk of penalties and legal disputes.

• Thorough Analysis of License Conditions: Even when using the simplified online process, it is crucial to carefully study and understand all license conditions, especially for 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 it legally verified that such a solution truly covers all your obligations and that you will avoid future disputes.

• Maintain Precise Documentation: Keep all license agreements, proofs of payment, and relevant communication to be able to prove compliance with all obligations in the event of an inspection or dispute.

By adhering to these principles, entrepreneurs can ensure compliance with the Copyright Act, avoid serious legal and financial consequences, and at the same time fully leverage the potential of music for the development of their business. In the complex world of copyright law, legal certainty is invaluable.