Stay out of Jail!
Let’s cut to the quick. Music on Hold and Background Music played through your telephone system must be licensed. You may be using a radio station or playing songs you purchased on a CD/MP3 player. It’s still illegal. Radio stations have the right to broadcast music but not the re-broadcast rights. When you purchased a CD or MP3 file, you own the medium but not the rights to the music on it. If you get caught and there are people who get paid to look for criminals like you, expect to pay $1,500 to “settle out of court.” This is coincidentally the amount you would need to fight it in court. The settlement has a 100% certainty that they’ll go away while the litigation route can not guarantee success.
Music on hold is a necessary business tool. The industry average is that over 50% of callers to your company will be put on hold. Those callers need to hear something lest they think that they have been disconnected while they were waiting. There are solutions.
The classy route is to have a professional company record messages on hold for you. Their set up includes hardware, licensed music of your choice and customized messages which are updated, usually quarterly.
Another solution would be to contract with a subscription music source such a Muzak. If you have cable TV service at your company contact them. They may be able to offer you Music Choice or a similar service. These are the music channels you see on cable TV but branded specifically for re-broadcast.
The least expensive way is to record your own on hold message or purchase royalty free music. You can get this on-line, at Best Buy or most office supply stores. The music may be a bit humdrum but it’s a one time cost. Load your music or record a personalized message on a computer, copy the file and drag both files to an inexpensive MP3 player. Make sure the MP3 player has a power cord or AC adaptor. Put the player on shuffle and you got an endless loop of elevator music or you badgering people not to hang up. You may need to go to The Shack (formerly Radio Shack) and get an adaptor which connects to the MP3 player at one end (the head set input) and your telephone system’s music on hold input source (usually a RCA jack).
If any of these solutions sound appealing but you’d like some more information, leave a comment and I’ll do my best to help. Remember that the airwaves may be free but getting yourself out of a copyright lawsuit is not.
Select Telecom 
Helpful information! Thanks for posting.
Great post Mike!
Great Post! It caused our group to check what each one of our facilities does for on hold music and we found one that was out of compliance. It definitely could have saved us some issues down the road!