We live in an incredibly digital world, where access to music has become nearly effortless. Today, about 67% of listeners globally use streaming services as their primary way to consume music. With just a phone and a speaker, anyone can instantly create a soundtrack for any environment.
For small and medium-sized businesses (SMBs), this convenience feels like a natural extension of everyday life. Business owners often rely on the same platforms they use at home, such as Spotify or Apple Music, to set the tone in their stores, restaurants, or bars. It is simple, inexpensive, and familiar. Plug in a device, connect to a speaker, and the job seems done.
However, what works seamlessly for personal use does not translate cleanly into a commercial setting.
Navigating Complex Compliance Issues
Many business owners are unknowingly operating in a gray area. A recent U.S. study found that 79% of businesses use consumer streaming services that aren’t licensed for commercial use. This is not typically due to carelessness. In most cases, it comes down to a lack of awareness and limited education around music licensing.
The rules are not intuitive. Streaming platforms are designed for individual listeners, and their terms of service explicitly prohibit commercial use. To further complicate the issue, information about proper licensing is often fragmented and difficult to navigate. Costs are not always transparent, and the process can feel overwhelming for business owners who are already managing tight margins and competing priorities.
The result is a widespread gap between what businesses think is acceptable and what is actually compliant.
Understanding the Real Requirements
Playing music in a business requires two key components.
First, a business must use a service that is licensed for commercial use.
Second, they must obtain public performance licenses, which allow copyrighted music to be played in a shared space.
These licenses are typically handled by performance rights organizations, including ASCAP, BMI, GMR, and SESAC. Each organization represents different catalogs of music, which means businesses often need multiple licenses to cover the range of songs they want to play.
As you can imagine, these costs can add up quickly. Based on publicly available rate cards, the minimum annual fees for organizations, such as ASCAP and BMI, start at approximately $324 and $311, respectively.
While these figures represent entry-level pricing, costs can increase as businesses adjust to their setup and layer in additional licenses from other organizations. For owners navigating music licensing on their own, the total expense can become significantly higher than expected.
The Challenge of Navigating Hidden Costs
For many SMBs, music licensing is a complicated and often unclear process. The presence of multiple Performing Rights Organizations, combined with overlapping fees and evolving rules, creates a difficult-to-navigate landscape.
Licensing fees, especially when multiplied across several organizations, can feel like an unexpected burden. As a result, many business owners operate without securing full public performance licenses.
While this may not be immediately visible, operating without these licenses can result in a business being labeled as non-compliant, which may lead to follow-up from licensing organizations and create unnecessary risk.
A Simpler Path to Compliance
Business owners deserve a clearer and more manageable way to get this right.
One of the most effective solutions is partnering with a company that offers a commercial streaming service. These providers are built specifically for business use and address both sides of the licensing equation.
- They offer music licensed for commercial environments to avoid using consumer services that are inadequate.
- In most cases, they include the necessary public performance rights licensing as part of their service.
This eliminates the need to negotiate with multiple organizations or keep track of separate agreements.
More importantly, it brings clarity and relief to business owners already stressed about their bottom line.
With a commercial provider, costs are predictable, lower, and compliance is built in. Business owners no longer need to second-guess whether they are operating within the rules. Instead, they can focus on running their business with confidence.
Beyond Compliance: Music as a Business Tool
While compliance is critical, it is only part of the story. Music also plays a powerful role in shaping the customer experience.
It influences how people feel when they enter a space, how long they stay, and how they perceive the brand. In fact, 86% of patrons say they are more likely to spend additional time or return to a store if the music resonates with them.
For small businesses, this creates an opportunity to be more intentional in building the customer experience.
With the right system in place, owners can tailor music to different times of day, customer demographics, or even specific areas within their space. A café might play upbeat pop during the morning rush and transition to softer tracks in the afternoon. A retail store could align playlists with seasonal promotions or create distinct zones with different moods.
This level of control allows businesses to create a more engaging and memorable environment. This type of control can only be achieved with a music streaming service built for business.
The Bottom Line
Music is not just background noise. It is part of how a business presents itself every day.
Getting it right requires clarity around compliance, awareness of costs, and a thoughtful approach to music selection. When these elements come together, businesses can reduce risk, control expenses, and create a better experience for their customers.
If you are interested in learning more about commercial music solutions, you can visit https://www.soundtrack.io/ or soundtrack.io/licensing to learn more about the complex legal requirements for using music in a business.
Ola Sars is a Stockholm-based serial music-tech entrepreneur and a 2024 Billboard International Power Player. He is the founder and CEO of Soundtrack Technologies, the leading music streaming service for businesses.
Originally founded as a joint effort with Spotify, Sars has transformed Soundtrack into the only global B2B streaming service of its kind, servicing over 80,000 businesses across 74 countries with a music catalog of more than 100 million tracks cleared for commercial use.
Sars is an established thought leader with international influence, including speaking at the Global Tech Conference and Djooky Music Investment Summit, and has been featured in top-tier business and music publications and podcasts, including Bloomberg, Music Business Worldwide, TechCrunch, Billboard, International Business Times, Forbes, and Business Insider, among others.
Photo courtesy Curated Lifestyle for Unsplash+