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SOURCE: A screenshot of a café playlist on Spotify
SOURCE: A screenshot of a café playlist on Spotify

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Musicians are being ripped off by cafes streaming music illegally

You may not know it, but the cool or relaxing music you are listening to at most cafes is probably illegal.

And this is ripping off players in the music industry, big or small. The musicians are losing out on an estimated US$2.7 million every year because of that. This comes from a study by Nielsen Music that is commissioned by Soundtrack Your Brand, a background music company backed by music streaming service Spotify.

Music for retail businesses are supposed to be licensed separately from their employees’ personal accounts so as to ensure that artists, composers, songwriters, producers, and others are appropriately compensated. According to the survey, only 17% of the businesses had obtained that license.

Which means 83% of business owners in the US and parts of Europe in the survey do not pay for playing music in a commercial setting. They are most likely using a personal music streaming account like Spotify to play music in cafes, restaurants, bars, hotels, hair salons or retail outlets.

The study estimates with 21.3 million businesses using consumer services globally, music rights holders are standing to lose out on US$2.65 billion annually. A cafe or a shop would have to pay about US$35 a month for a commercial license, compared with about US$10 for a consumer service.

It also reveals that 71% of small business owners in the US incorrectly believe that they can legally use a personal account to play music service in a store.

The study was conducted among 5,000 small business owners in the US, UK, Sweden, Spain, Italy, Germany and France between May and July this year, with a follow-up sizing study performed between July and August.

Although the study was commissioned by a company that aims to become the Spotify for retail businesses and it seems like policing to make retail businesses pony up more cash to justify the music in their stores, this will also mean music makers will earn more when their songs are aired in restaurants, stores and other business venues, which in turn could help increase sales at the establishments. But how much more do the artists stand to earn?

Spotify, which controls most of the music streaming market with a 51.51% market share in the US, is known for not being a good paymaster as it pays just US$0.00397 per stream. Its closest competitor, Apple Music, has a 22.29% market share but pays a higher US$0.00783 per stream.

Earnings in the range of quarter or half cents means an artist must be really popular in order to make a living from streaming services. It is difficult, and hitting it big on streaming has been equated to winning the lottery. 

It does not help Creators to have their work ripped off by businesses which crime is ignorance. If small businesses could do their part and change to a business license for their establishment’s music, it will benefit musicians, be it in cents or dollars.

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Mark Laudi

Mark Laudi

Press contact Managing Partner (+65) 6223 2249

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