In previous posts, we’ve examined the impact of streaming, which over the past ten years has become the dominant medium for music consumption, on artists. Simply put, one can now stream billions of songs on any number of streaming services for just $9.99 a month — what consumers used to spend on one CD or album download. At those rates, a severe drop in revenue is inevitable for musical artists at any level. What has not been considered, however, until recently, is the negative impact of businesses turning to personal streaming accounts for their background music instead of paying commercial licensing fees.
A new study by Nielsen Music, commissioned by Soundtrack Your Brand, a company which provides specialized playlists for different types of businesses, does just that. Obviously, Soundtrack Your Brand has something to gain by publicizing this information, but it may prove helpful for artists and songwriters as well. Business streaming licenses, such as the ones provided by Soundtrack Your Brand, pay creators a much higher rate than personal streaming licenses, as the music is played in public places and heard by many more people. Nielsen’s study found that 83% of the 5,000 small business owners interviewed use their or an employee’s personal account for their music streaming, costing creators an estimated $2,650,000,000 annually. Though Spotify’s Terms & Conditions state it clearly, It seems that few of these businesses actually know that this is illegal — 71% of American businesses owners claimed they believed they only needed the personal account to play music in their store, and 86% worldwide state that they are willing to pay for music. With legal music streaming so affordable, illegal downloading is virtually obsolete. The problem, then is not the law, which already establishes the rate difference between commercial and personal use. The problem is awareness.
It’s fair to say that very few people actually read the Terms & Conditions of their Spotify or Apple Music accounts. Maybe it’s time to start looking a little closer. While the publication of this study is sure to bring some business to Soundtrack Your Brand, it will hopefully have a wider impact, and ultimately get a few more dollars into the hands of music creators everywhere.