By Dan Cherny, EO Australia-Victoria member and Managing Director at Marketing Melodies and storePlay.
Streaming music services, such as Spotify or Apple music, have reshaped the way we consume music. Never before could we carry millions of songs in our back pockets and match playlists to our mood, at any time we desire. This great experience in personal music consumption triggers an important misconception among entrepreneurs looking for instore music though: “If Spotify/Apple music works so well in my personal life, why not use it in my shop, bar, restaurant or other business venue?” In this article, we provide a number of reasons why you should not. Both from a legal and a marketing perspective.
Reason 1: It is illegal
Whenever a business distributes music, it is obligated to pay mechanical rights. These are fees due the rights holders, as compensation for the fact that their creations are duplicated. Before streaming, these were physical, mechanical copies. Hence the term mechanical rights. The fees are much lower when the copies are intended for personal use as opposed to public use, such as instore music. Spotify and Apple music only cover these rights for personal use, so the music is not suited for public use. Furthermore, article 4 of Spotify’s own user agreement clearly states that only personal use is permitted. The reason is that Spotify’s deal with the major labels does not include commercial use.