Performance Royalties for Australia

If your business plays music in the background, hosts live entertainment, runs events, produces content, or publishes creative works, you’ve probably come across the idea of performance royalties.

For many small businesses, performance royalties sit in a frustrating grey area: you know there are rules, you want to do the right thing, but it’s not always obvious when a payment is required, who needs to pay it, or what paperwork you should have in place.

This guide breaks down performance royalties in plain English, with a practical focus on what Australian businesses and creators need to know to manage risk and keep your commercial arrangements clear. (It’s general information only and isn’t legal advice - licensing obligations can vary a lot depending on the exact use.)

What Are Performance Royalties (And Why Do They Matter For Your Business)?

Performance royalties are payments made to rights holders (often songwriters, composers, and music publishers) when a piece of music is performed publicly or communicated to the public.

In business terms, “performed” doesn’t just mean a band on a stage. It can include music being played:

in a venue (café, bar, gym, retail store)
at an event (ticketed or not)
in a waiting room or office reception
through a livestream or digital broadcast (depending on how it’s delivered and what licences are in place)
as part of marketing content shared online (where the relevant rights have been licensed - often through a combination of platform terms and/or direct licences)

These royalties exist because music is protected by copyright. If your business uses music as part of how you attract customers, set ambience, or create content, you’re often benefiting commercially from someone else’s intellectual property (IP) - and you need to make sure the relevant permissions are actually in place.

Performance Royalties Vs Other Music Royalties

It helps to separate performance royalties from other common royalty categories you might hear about:

Performance royalties: paid when music is played or performed publicly (and for certain “communication to the public” uses).
Mechanical royalties: generally linked to reproducing music (for example, manufacturing CDs, or some digital reproductions depending on the arrangement).
Synchronisation (sync) fees: usually paid when you pair music with video (ads, films, social media content) - this is a separate permission from performance royalties and is often the main “music clearance” issue for video.

In real life, a single project can trigger more than one kind of permission or payment. For example, using a commercial track in a promotional video may require sync permission for the underlying composition and a separate licence for the sound recording - and then, depending on where and how the video is shown (and what licences are already in place via a platform or a venue), there may also be public performance/communication licensing considerations.

When Do Performance Royalties Apply In Day-To-Day Business Use?

If you’re a small business owner, your first question is usually simple: “Do I actually need to pay performance royalties?”

There isn’t a one-size-fits-all answer, but there are common scenarios where Australian businesses should consider whether public performance and communication licences are needed.

1) Playing Music In Your Physical Premises

Many businesses play music to improve customer experience - but playing music “in public” is different to playing music at home. In Australia, the key question is usually whether the use is domestic/private or public (for example, music played to customers, members, visitors, or staff in a commercial setting is commonly treated as “public”).

Performance royalties commonly come up for:

cafés, bars, restaurants and takeaway venues
retail stores and shopping spaces
gyms, fitness studios and dance schools
salons, clinics and waiting rooms

Even if the music is simply “in the background”, it may still be considered a public performance or communication.

2) Live Events And Entertainment

If your business hosts live music (or hires DJs), public performance licensing can apply because the music is being performed to an audience in a commercial setting.

This can include:

ticketed gigs
private functions at your venue (weddings, corporate events)
public festivals or community events

A key practical point is this: even if a performer is “responsible for their own music”, the venue or organiser may still have obligations. Your contracts and event documentation matter here, because they allocate responsibility and reduce disputes later.

3) Online Content, Livestreams, And Digital Marketing

Music licensing online can be confusing. Using music in online content may involve “communication to the public”, but whether you need additional licences (and who needs them) depends heavily on the platform, the type of account you’re using, the content format, and what rights are already covered under platform agreements.

Common business examples include:

social media videos using commercial music (which may be limited to certain uses under the platform’s music tools and terms - and may not cover all business or advertising use cases)
recorded webinars or online courses with background music (often requires careful licensing, particularly if the music isn’t specifically licensed for that use)
livestream events featuring music (licensing can differ from on-demand uploads)
podcasts with music segments or intro/outro tracks (often requires specific permissions because podcast distribution isn’t automatically covered by general “social” platform licences)

This is where many businesses get caught out: just because music is easy to add to a video doesn’t mean the legal rights are automatically cleared for your particular business use (especially for paid ads, sponsored content, or off-platform distribution).

4) Using Music In Client Deliverables

If you create content for clients (for example, marketing agencies, videographers, or web designers), music rights (including sync and recording permissions, and sometimes public performance/communication considerations) can become part of your project risk profile.

You’ll want to be clear on questions like:

Who supplies the music - you or the client?
Who is responsible for ensuring the music is licensed properly for the intended channels (paid ads, websites, in-store screens, events, TV, etc)?
What happens if there’s a claim later?

These issues are much easier to manage if your contracts clearly address IP, licensing responsibilities, and limitations on use.

Who Pays Performance Royalties, And Who Gets Paid?

In most commercial settings, the party who “uses” the music publicly is the one who needs to ensure the relevant permissions and licensing are dealt with. That might be:

the venue owner or operator
an event organiser or promoter
a business playing music in its premises
a broadcaster or certain digital services (depending on the setup)

In Australia, music licensing is often handled through collecting societies and licensing bodies. As a general guide:

APRA AMCOS commonly licenses public performance and communication of musical works (songs/compositions) and distributes royalties to songwriters, composers and publishers.
PPCA commonly licenses public performance and communication of sound recordings (recorded music) and distributes to recording copyright owners and performers.

Which licences you need (APRA AMCOS, PPCA, both, or something else) depends on how the music is used and what’s already covered by existing arrangements.

Why Contract Clarity Is So Important

Music licensing issues often become a dispute when everyone assumes someone else is handling it.

For example:

A venue assumes the band is covering all music permissions.
The band assumes the venue already has the right blanket licences.
A marketing agency assumes the client will clear music rights for ads and distribution.
The client assumes the agency is delivering a “fully cleared” video for all channels.

Clear agreements help you avoid expensive misunderstandings and protect your reputation with clients and partners.

How To Manage Performance Royalties In A Practical, Low-Stress Way

When you’re juggling staff, customers, suppliers and cashflow, you don’t want music licensing to become another open loop. Here’s a practical approach to managing performance royalties and related rights.

Step 1: Map Out How Your Business Uses Music

Start with an honest list of where music appears in your business operations. For example:

Background music in-store
Live performances (regular or occasional)
Fitness classes and choreographed routines
Online content (ads, reels, YouTube videos, podcasts)
Client deliverables (video, brand content, apps)

This helps you identify where public performance/communication licensing could apply, and where you may need additional permissions (like sync permission for video, and licences for sound recordings).

Step 2: Check Your Suppliers’ Claims Carefully

It’s common to rely on third-party music sources (streaming apps, playlists, “royalty-free” libraries, DJ services, or AV suppliers).

The main trap is assuming:

“Royalty-free” means “free for all uses”, or
A personal subscription is okay for commercial premises, or
A contractor’s setup automatically covers your business and your specific venue/event use.

In practice, “royalty-free” usually means you pay a licence fee once (or via subscription) and don’t pay ongoing royalties to that library for that use - but it doesn’t always cover every scenario, every territory, every platform, paid advertising, or every type of public communication. And even where a supplier provides a licence, you should still confirm whether additional public performance licences (for example, APRA AMCOS and/or PPCA) are required for how you use music in your premises or events.

Step 3: Put The Right Terms In Your Customer-Facing Documents

If you run events, memberships, classes, or content services, your customer-facing documentation can do a lot of heavy lifting.

Depending on your model, you might need:

Website Terms and Conditions that deal with acceptable use, IP, and content restrictions
E-commerce Terms and Conditions (if you sell subscriptions, tickets, or digital products)
Event terms that explain recording rules, livestreaming, and how content can be reused

These documents won’t “solve” licensing by themselves, but they can reduce confusion about what people can and can’t do with your content and brand assets (and help you set expectations around recordings and redistribution).

Step 4: Use Proper Agreements With Contractors And Collaborators

If your business works with creatives (musicians, producers, videographers, editors, DJs, sound engineers, influencers), your contracts should spell out who owns what and who is responsible for clearing third-party rights.

Depending on what you’re doing, consider whether you need:

Publishing Agreement terms (if you’re involved in publishing or monetising compositions)
Music Distribution Agreement terms (if you distribute recordings or content at scale)
Producer Agreement terms (if you commission or create recorded works)

Even if you’re not a “music business”, these agreements (or clauses drawn from them) can be very relevant if you use music as part of your commercial output.

Step 5: Keep A Simple Compliance Paper Trail

You don’t need to turn your business into a filing cabinet, but you do want to be able to show you took reasonable steps.

A practical “paper trail” might include:

invoices and receipts for music licences and subscriptions
contracts with performers/DJs/production teams
records of what music libraries you used for which projects (and the licence terms)
internal notes on how you assessed whether a use was public or private, and what licences you relied on

If an issue comes up later, having this information ready can save you serious time (and stress).

Common Mistakes Small Businesses Make With Performance Royalties

Most problems happen because music feels “incidental” - until it isn’t. Here are some common pitfalls we see small businesses run into.

Assuming A Personal Streaming Account Covers Commercial Use

Many personal music subscriptions are designed for private, domestic listening, not commercial premises. If you play music in a shop, studio, or venue, you’ll want to make sure your setup is approved for business use and that any required public performance licences are in place.

Not Separating “Sound Recording” Rights From “Composition” Rights

Music rights can involve more than one layer of copyright. A licence that covers the recording may not automatically cover the underlying musical work (and vice versa). This is especially important for video, advertising content, podcasts, and other recorded content.

Not Addressing Music Licensing In Event And Venue Contracts

If you host events (or rent out your space), your agreements should clearly set expectations around music usage and who is responsible for permissions and licences (including APRA AMCOS/PPCA licensing where relevant).

This is one of those areas where a short clause now can prevent a major dispute later.

Overpromising “Cleared” Content To Clients

If you deliver marketing videos or branded content to clients, be careful with how you describe the deliverable.

If the client assumes all music rights are cleared for all channels (including paid ads and off-platform use), but the music was only suitable for limited use (for example, under a platform tool or a restricted library licence), that can quickly become a contractual dispute (and damage your client relationship).

What Legal Documents Help You Stay Protected When Music Is Part Of Your Business?

Performance royalties are part of a broader picture: how your business uses and commercialises IP. The right legal documents won’t just help you manage licensing - they also help you manage ownership, usage rights, and risk if someone challenges how you used content.

Here are the legal documents we commonly see as useful when music is involved in business operations.

Service Agreement: sets out the scope of work, payment terms, IP ownership, and who is responsible for third-party licences (like music) when you deliver creative services.
Content Production Agreement: useful when you commission audio/video work, clarifying who owns the final deliverables and what permissions are included.
Distribution or Publishing Agreements: important if you distribute, monetise, or manage creative works at scale, including royalties and reporting.
Website Terms and Conditions: helps set rules around content use, takedowns, and user behaviour (particularly helpful if users can upload or share content).
E-commerce Terms and Conditions: helpful if you sell tickets, memberships, subscriptions, courses, or digital products where content access is part of the value.
Employment and Contractor Agreements: essential if staff or contractors create content for your business - you want clarity on IP ownership and confidentiality.

If you’re building a content-driven brand (for example, an agency, studio, venue group, creator-led product business, or events company), tightening up these documents early is one of the best ways to reduce the chance of IP and licensing issues later.

It’s also worth remembering: if your brand itself is a key asset, protecting the name and identity matters too. Many businesses address this as part of a broader IP strategy alongside music and content rights.

Key Takeaways

Performance royalties are commonly triggered when music is performed publicly or communicated to the public, including in many business settings.
Australian small businesses often encounter public performance licensing through in-venue music, live entertainment, and events - and music rights issues can also arise in online content depending on platforms and intended use.
Problems usually arise when responsibility is unclear - strong contracts with performers, contractors, and clients help prevent disputes.
“Royalty-free” and subscription music can still come with restrictions, so it’s important to confirm what your licence actually covers (and whether additional licences are needed).
Having the right documents (like website terms, e-commerce terms, and properly drafted production/distribution agreements) helps you manage IP and reduce legal risk.

If you’d like help setting up contracts and legal documents for a business where music and content are central (including managing performance royalty and licensing risk), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

Performance Royalties: How They Work In Australia