Forget stream-ripping – this is the new “stream rip off”. Maybe. A new study from Nielsen claims that small businesses like cafes and hairdressers are cheating record labels and artists out of $2.7bn a year by streaming music from services like Spotify and Apple Music in their business premises via personal accounts and not seeking commercial-use licences.
The research, it is important to note, was commissioned by Soundtrack Your Brand, which obviously has a vested interested in growing this part of the business. Soundtrack Your Brand raised $22m in funding last February and this followed a $10.9m funding round in 2015. It launched in the US in 2016, with McDonald’s as its first client and it was founded in Sweden in 2013 as a spin-off from Spotify, set up by Beats Music co-founder Ola Sars and former Spotify biz-dev boss Andreas Liffgarden.
The research was based on interviews with 5,000 small businesses in the US, UK, Sweden, Spain, Italy, Germany and France and it found that 83% of them were streaming music from personal accounts rather than business accounts. While this is presented as a worst-case scenario in terms of the $2.7bn number arrived at, it is a huge leap to suggest that this is all the money stakeholders here are missing out on. These are small businesses and it is unclear how many of them would upgrade to pay the business rate as opposed to just stopping playing music if it the cost was prohibitive for them. There are echoes here of the great P2P debates of the early 2000s where every illegal download was treated as a “lost” sale. Of course, it would be wonderful if all these small businesses could pay the correct business rates for music; but it does not follow that, given the choice of either paying the higher rate or switching the music off, all the businesses in question would take the former option and make the music industry $2.7bn better off.