Report: Music Industry Losing Out On $2.65 Billion In Revenue From Improper Streaming In Businesses

Many businesses don't have the correct business licenses to play music in their establishments.
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If you go into your local coffee shop (not Starbucks), restaurant or bakery, chances are they will be playing music. If it is a national chain, they will likely be adhering to the rules from corporate, but otherwise, the smaller businesses will be playing music that may come from a personal Spotify, Apple Music, or Sirius XM account. Those business are likely doing so illegally, since they will need a business license to stream music since the songs are heard by more people than in theory a personal account would be heard by. According to a new report from Nielsen, the music industry is losing close to $2.7 billion as a result.

Artists make more per stream when restaurants, bars and other businesses play music. However, streaming services such as Apple Music, Amazon or Spotify are not designed for these purposes. There are other companies that are specifically created for this with business licenses.

“Personal music services are not designed for business use, which means music makers get less money than they should,” Nielsen said in the report, which was commissioned by Swedish Muzak streamer Soundtrack Your Brand AB.

The system can be murky and enforcement is nearly impossible for every business. The study estimates with 21.3 million businesses using consumer services globally, rights holders forfeit $2.65 billion annually.

The study came up the totals because 88 percent of small businesses reporting they play music daily or at least 4-5 days per week. However 83 percent (21.3 million) of small businesses who play background music use personal music services such as Spotify or Apple Music. Just 17 percent use services legal for business, according to Billboard.

A big issue is that many businesses don’t know what they are doing is illegal, with 51% of businesses saying they think they are right and then in the U.S. that number jumps to 71%. Licenses aren’t expensive, so there needs to be more awareness and better solutions for businesses to get better business licenses so musicians can make more money.

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