Soundtrack, a music streaming service built for business, estimates the US music industry is currently missing out on $1.4 billion in revenue every year.
A new study has found that four out of five American businesses play music from an unlicensed service on their premises, equating to approximately three million venues.
The independent study commissioned by Soundtrack surveyed 1,525 decision-makers representing almost 15,000 US business locations. It found that while 97% of US businesses play music, 79% of US businesses illicitly use consumer streaming services to play music in-store, despite those services being only licensed for personal, non-commercial listening.
Only 19% of US businesses playing music are fully compliant with commercial music requirements, according to the study.
Separately, just 5% report having licenses from all four major performing rights organisations ASCAP, BMI, GMR and SESAC.
The findings highlight the complexity of the public music licensing landscape, with 78% of respondents believing they are compliant, and 58% believing it is legal to stream personal music accounts in their businesses.
To address the issue, Soundtrack has announced a new partnership with performing rights organisation SESAC, complementing its existing licensing deals with ASCAP, BMI and GMR.
SESAC licenses the public performance of more than 1.5 million songs on behalf of its 15,000-plus affiliated songwriters, composers and music publishers, which include Bob Dylan, Neil Diamond, Adele and Ariana Grande.
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
Ola Sars
To be legally compliant, businesses playing music to customers must use a commercially-licensed music source and hold the necessary public performance licenses. Businesses can arrange public performance licenses directly with respective PROs, or find a commercially licensed music-for-business service that also includes the public performance licences for its catalogue.
Purchasing PRO licences does not make a consumer streaming service eligible for commercial playback.
“These services do not compensate rights-holders and musicians appropriately, and their misuse exposes a business to potential steep statutory damages,” said Soundtrack in a statement.
Ola Sars, CEO and founder of Soundtrack, said: “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.”
FOLLOW 
