Music on Hold Licensing: What You Need to Know to Avoid Fines
When you play music for customers waiting on the line, you’re not just making their wait more pleasant—you’re music on hold licensing, a legal requirement for playing copyrighted audio in a business setting. Also known as public performance rights, it’s not optional if you’re using a VoIP system, landline, or cloud phone service. Many small businesses think playing Spotify or YouTube in the background is fine, but that’s a common and costly mistake.
Music on hold licensing relates directly to copyright law, the legal framework that protects artists, composers, and record labels from unauthorized use of their work. If you play a song—even for 10 seconds—on hold, you’re publicly performing it. That’s why organizations like ASCAP, BMI, and SESAC exist: they collect fees from businesses that use music in public spaces, including phone systems. You don’t need to be a big company to get targeted. Small businesses with even one phone line have been fined $1,500 per song for unlicensed use. And yes, that applies to holiday tunes, background playlists, and even free streaming services.
It’s not just about avoiding fines. Many VoIP providers offer built-in music on hold features, but they won’t tell you if the audio they provide is licensed. You’re still responsible. Some providers include licensing in their plans, others don’t. If you’re using a custom MP3 or streaming from your computer, you’re on your own. You also need to consider business phone systems, the infrastructure that connects your calls and handles audio routing, including on-hold playback. Even if your system is cloud-based, the legal responsibility doesn’t disappear.
There are simple, affordable ways to comply. Services like Music on Hold Pro, Copyright Clearance Center, or even licensed royalty-free music libraries offer annual subscriptions for under $100. These give you legal access to thousands of tracks without worrying about royalties. Some even let you customize the message before the music plays—"Your call is important to us"—which improves customer experience while keeping you safe.
Don’t wait for a letter from a music licensing agency. If you’re using any kind of music on hold in your business, you’re already using it without permission unless you’ve paid for the right. The good news? Fixing this is cheap and quick. The bad news? Ignoring it could cost you more than your phone bill.
Below, you’ll find real-world guides on how to set up compliant music on hold, avoid hidden legal traps in your VoIP system, and choose the right audio sources without overspending.
