Soundtrack founder and head Ola Sars says the U.S. music industry is missing an estimated $1.4 billion in annual royalties because businesses play copyrighted music without the required commercial licenses. The figure comes from a study commissioned by Soundtrack, a commercial music streaming platform backed by Spotify.
The study surveyed around 1,500 representatives of approximately 15,000 U.S. business locations. It found that only 19% of businesses that play music are fully compliant with commercial music requirements. Nearly 80% use consumer streaming services, which are licensed for personal use, while just 5% said they held licenses from all four major performing rights organizations: ASCAP, BMI, GMR and SESAC.
Sars argues that businesses often do not realize personal streaming services cannot be used for commercial purposes. He says licensing rules are complicated, despite an established rate structure, and believes better compliance could create a significant new source of income for artists and rights-holders as growth from subscription and ad-supported streaming slows.
Soundtrack says it recently partnered with SESAC, adding to its coverage of the four major U.S. performing rights organizations. Its commercial service costs around $35 a month and includes a licensed music player, tools for customizing playlists across locations, and a catalog of more than 155 million tracks represented by ASCAP, BMI, GMR and SESAC.
The Sweden-based company says it serves 60,000 businesses in 75 countries. It generates roughly 60 million euros, or $67 million, in annual recurring revenue and is on track to reach $100 million by 2028.
Sources: Billboard.