Image: Soundtrack
US Music Industry Loses $1.4 Billion Annually to Unlicensed Commercial Streaming
A study by the B2B streaming service found that 79% of US businesses play music in-store without proper licenses
Soundtrack, a streaming service targeted at businesses, has released a report detailing that the US industry is losing $1.4 billion in royalties every year from improper streaming by commercial establishments. According to the study, 97% of US businesses play music in-store, and 79% of them use consumer streaming services that are not licensed for commercial use.
How it works:
Subscriptions for Spotify and Apple Music are not cleared for personal listening.
In order to stream music commercially, businesses must use a commercially licensed service like Soundtrack or acquire public performance licenses from performing rights organizations (PROs) such as ASCAP, BMI, GMR, and SESAC.
Such licenses do not clear personal streaming accounts for commercial use.
The numbers:
The study surveyed 1,525 individuals who represent close to 15,000 US businesses.
19% of businesses are following commercial guidelines for playing music.
5% have licenses from all four major PROs.
78% of respondents believe they are operating within the law. 58% believe streaming their personal accounts in their businesses is allowed.
What’s next:
Soundtrack has announced a new partnership with SESAC to expand its licensed catalog for businesses.
Soundtrack already has deals with ASCAP, BMI, and GMR.
What they said:
Ola Sars, CEO and Founder of Soundtrack: The disproportionate complexity of sourcing music correctly for US businesses has led to $1.4 billion in potential revenue being lost every year for the US music industry. For business owners, it is almost impossible to understand and comply with existing requirements, and our research confirms that lack of awareness and understanding, not ill intent, is the main cause of this widespread compliance issue. Our new deal with SESAC ensures that Soundtrack can provide a unique one-stop-shop, so that US business owners can feel safe playing music to customers, and music creators and rights-holders are fairly compensated when their music is used to grow these businesses. Ultimately, our aim is to create a healthy ecosystem for the background music industry by growing the ‘pie’ for music creators and rights-holders, while not breaking the bank for hard-working businesses.”
👋 Disclosures & Transparency Block
This article was written with information sourced from Music Week.
We covered it because the study represents a significant oversight in royalty collection.
