According to federal copyright law, you must obtain permission for the right to play copyrighted music. This applies to businesses which use live music, as well as those that use recorded music played over a radio, television, tape deck, compact disk player or other equipment.
There are some important exceptions, however. No license is needed from ASCAP or BMI, the licensing agencies for the vast majority of published songs, if an establishment plays music from radio or television over a limited number of speakers. Generally retailers with less than 2,000 gross square feet of space who play broadcast music are also exempt.
A third key exception applies to any retailer who plays music on an “audiovisual or other device” for the sole purpose of selling the device — for example, in a musical instrument or consumer electronics store. A similar exemption applies to those who sell recorded music.
The licensing agencies have been aggressive in enforcing the law. It’s always a good idea to check with an attorney familiar with this aspect of copyright law, because penalties for violations range upwards of $500 per piece of music.