You Wouldn’t Download a Latte, Would You?
What’s an independent coffee shop without a hip soundtrack? Like steamed milk and espresso, or a beanie on a barista’s head, good tunes and cafes are just meant to be together. The only problem? Most of that music is streamed illegally. According to a 2018 report by Nielsen, unlicensed plays in small businesses cost the music industry $2.65 billion a year.[1] Despite the report’s accusatory tone, it’s hard to fault the businesses themselves. Many owners have no clue that they need a license to play copyrighted music in a public place of business, and often rely on employees to deejay off their personal devices and streaming subscriptions.[2].
BMI, ASCAP, and SESAC, the performers rights organizations (PROs) responsible for collecting licensing fees and distributing them to artists, have long taken an aggressive role against businesses like coffee shops.[3] After making a clandestine visit to determine that at least one of their artists’ songs has been played, a PRO will send a letter demanding that the business purchase a license. To follow-up, the PRO will then make phone calls and send representatives to the store.[4] Each organization files several hundred infringement suits a year, but with penalties running up to $30,000 per song, most businesses are willing to purchase a license.[5] PROs have limited investigation resources, but no business is too small to avoid scrutiny. A licensing executive at ASCAP told the Boston Globe, “Every now and then we run into people who say, ‘I’m just a small little bar; they’re not going to sue me,’ and that’s a mistake. Frankly, once you’re on our radar we can’t let you go.”[6]
Coffee shops have faced a difficult choice when it comes to music licensing: pay around $1500 a year for full coverage, play no music or only license-free music, or risk getting sued for every single unlicensed song played. Now they have a fourth option, a licensing app called Soundtrack Your Brand. For around $330 per year, businesses get access to millions of cleared songs.[7] Since launching in the U.S. in April, Soundtrack embarked on a major marketing push to alert small shops of the risks they face and pitch their product as a bargain alternative (part of this campaign included sponsoring the aforementioned Nielsen report).[8] The service promises to pay artists more per play than consumer streaming services, but with a price that’s only $20 more per month than consumer streaming — it’s hard to imagine a major windfall.[9]
Either way, there’s plenty of room for growth. The Nielsen report found that 90% of small store owners played copyrighted music in their stores, and 71% of them didn’t know they needed a license[10] Soundtrack founder Andreas Liffgarden’s goal is to educate. As he told Rolling Stone, “you instinctively know that you can’t use your Netflix account and open a cinema, but the same isn’t true for music.”[11] Liffgarden might not have the concept of background music completely nailed down, but his product could at last bridge the gap between business owners and the licensing industry.
Footnotes
