Music may not be the first thing shoppers notice when they walk into a store, but when it’s not there, it’s painfully obvious. For small businesses, picking the right background soundtrack may have more to do with the tastes of the owner than any corporate branding strategy, and as such, many don’t give the streaming services they use a second thought.
According to a new study conducted by Nielsen Music, 83 percent of small businesses that play background music use personal streaming services rather than business licenses, despite the fact that the latter are required when music is being used for commercial benefit. The study, which included roughly 5,000 small-business owners across seven countries, was funded by Soundtrack Your Brand, a company that offers music streaming to businesses for $26.99 per month. The higher price tag gives artists more compensation than personal services like Spotify and Apple Music, which are intended only for individual use and which are often criticized by stars like Beyoncé and Taylor Swift for offering what they consider paltry pay-per-stream rates to artists.
Ultimately, Nielsen calculated, the lost revenues for the music industry amount to $2.65 billion annually, based on an estimated 21.3 million businesses around the world using personal streaming services. The researchers estimated that copyright holders lose an average of $11.96 per month for every business that uses a free music service and $8.33 per month on every business that uses a paid personal music service.
Of course, small-business owners have plenty on their plate already, and in most cases, Nielsen found, they weren’t aware that they even needed a business license. Globally, more than half believed they could use their personal account at work, and in the U.S., that number rose to 71 percent. Ignorance isn’t a legal defense, however, and businesses including local bars and clothing stores have been threatened with fines and even sued by music labels.
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