Every year, ASCAP, BMI, and SESAC send thousands of demand letters to small businesses. Many of those businesses do not actually owe anything — they are covered by the homestyle exemption, a federal law that most business owners have never heard of. This page is a complete, plain-English breakdown of how it works.

The homestyle exemption lives in 17 USC 110(5) and has two separate prongs. Understanding which one applies to your business is the key to knowing whether you need music licenses.

Last updated April 2026

The short answer

The homestyle exemption is a federal carve-out that lets certain small businesses play music publicly without paying ASCAP, BMI, or SESAC. It has two parts. Prong A (the original homestyle exemption) covers any business using a single home-type radio or TV — no size limit. Prong B (the business exemption, added in 1998) covers small businesses up to specific square footage limits that use broadcast music with a limited number of speakers. If your business qualifies under either prong, you are exempt from PRO licensing for that music.

The two prongs

Prong A — the original homestyle exemption

This is the older, simpler version. It comes from the original 1976 Copyright Act and was based on a Supreme Court case (Twentieth Century Music Corp. v. Aiken, 1975). Prong A says:

You are exempt if:

  • You use a single receiving apparatus of a kind commonly used in private homes (a regular radio, a standard TV, a basic stereo)
  • You do not charge a fee to see or hear the transmission
  • You do not retransmit the signal to the public

There is no square footage limit under Prong A. A 10,000 sq ft warehouse with a single clock radio on the wall qualifies. The test is about the equipment, not the space. But the equipment must be genuinely "homestyle" — a single consumer-grade device, not a professional sound system.

Prong A covers: a single radio on the counter, a single TV in the waiting room, a basic home stereo playing broadcast radio. Prong A does not cover: multiple speakers wired to an amplifier, a professional PA system, or any streaming service (Spotify, Apple Music, etc.).

Prong B — the business exemption (Fairness in Music Licensing Act, 1998)

Congress added Prong B in 1998 because many small businesses had outgrown the "single radio" test but were still too small to justify paying thousands per year in PRO licensing. Prong B is more generous on equipment but adds square footage and source restrictions.

Prong B has different thresholds depending on whether your business is a food-service/drinking establishment or any other type:

Requirement Food & drink All other businesses
Max square footage 2,000 sq ft 3,750 sq ft
Max speakers 6 total, 4 per room 6 total, 4 per room
Max TVs 4 total (55" max), 1 per room 4 total (55" max), 1 per room
Music source Broadcast only Broadcast only
Cover charge Not allowed Not allowed
Retransmission Not allowed Not allowed

"Broadcast only" means over-the-air radio, broadcast television, or basic cable/satellite. Consumer streaming services like Spotify, Apple Music, Pandora, and YouTube are not broadcasts. They are on-demand digital audio streams and are not covered by either prong of the homestyle exemption.

"Square footage" means gross square feet excluding space used exclusively for customer parking. It includes every room in the business: sales floor, kitchen, storage, restrooms, offices, hallways.

Which prong should I use?

You can qualify under either prong — they are not mutually exclusive. In practice:

The math

If exempt under either prong: $0 per year in licensing. You are protected by federal statute.

PRO licenses (ASCAP + BMI + SESAC): Roughly $400–$800 per year per PRO. All three together: approximately $1,100–$2,200/year for a small business.

Commercial background music service: $200–$600 per year. One subscription bundles all PRO licensing. No separate ASCAP, BMI, or SESAC paperwork.

Risk of being wrong: $750–$150,000 per song in statutory damages (17 USC 504(c)). A typical PRO settlement demand is $3,000–$10,000.

Common mistakes

  1. "I pay for Spotify Premium, so I'm licensed." No. Spotify Premium is a personal-use license. It does not cover public performance in a business. The homestyle exemption does not apply to streaming at all.
  2. "My business is small, so I must be exempt." Size helps, but it is not the only factor. You also need to be playing broadcast music (not streaming) and meet the speaker limits.
  3. "I only play music quietly." Volume does not matter. The statute does not mention volume. Any audible music in a space open to the public is a public performance.
  4. "Nobody has ever come to check." PROs employ field representatives who visit businesses. They also use services like Shazam-style audio monitoring. When they catch you, the statutory damages start at $750 per song.

What to do next

  1. Run the free self-check to apply the homestyle exemption to your specific business. It walks through square footage, speakers, music source, and establishment type.
  2. Document your setup. If you rely on the exemption, keep a written record of your square footage, equipment, and music source. Photos help. This is your evidence if a PRO challenges you.
  3. If you are not exempt, the simplest fix is a commercial background music service for $200–$600/year. It bundles all three PRO licenses into one subscription.
  4. If you have a demand letter, the Music Licensing Audit Kit includes response templates for ASCAP and BMI demand letters.

Run the full self-check

The free self-check tool applies both prongs of the homestyle exemption to your business. Answer 7 questions and get a clear answer about whether you are exempt, need a license, or fall in a gray area.

Start the Free Music Licensing Self-Check 7 questions, ~3 minutes, no signup Get the Response Template Bundle — $19 Speaker worksheet + demand letter templates + statute reference

Source text

17 USC 110(5)(A) — the original homestyle exemption:

"...communication of a transmission embodying a performance or display of a work by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes, unless— (i) a direct charge is made to see or hear the transmission; or (ii) the transmission thus received is further transmitted to the public..."

17 USC 110(5)(B) — the business exemption (Fairness in Music Licensing Act, 1998):

"...a communication of a transmission embodying a performance or display of a nondramatic musical work... by an establishment other than a food service or drinking establishment, if— (I) the establishment in which the communication occurs has less than 2,000 gross square feet of space... or (II) the establishment in which the communication occurs has 2,000 gross square feet of space or more and— the performance or display is communicated by means of a total of not more than 6 loudspeakers, of which not more than 4 loudspeakers are located in any 1 room or adjoining outdoor space; and a total of not more than 4 audiovisual devices, of which not more than 1 audiovisual device is located in any 1 room, and no such audiovisual device has a diagonal screen size greater than 55 inches..."

Full statute: 17 USC 110 at Cornell LII

Not legal advice. This page applies the publicly available text of 17 USC 110(5) to common small-business scenarios. It does not substitute for a licensed attorney or compliance professional. Before acting, confirm with the relevant PRO or a licensed professional in your jurisdiction. Laws change — this page reflects rules as of April 2026. The site author is not responsible for decisions made based on this content.
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