Photo: Courtesy of Soundtrack Your Brand
Bringing The Streaming Music Revolution To Small Businesses
Music adds so much to atmosphere, and commercial background-music services can help deliver competitive advantages to business customers
"Licensed soundtracks for small businesses offer a win-win musical opportunity" — Conversations In Advocacy #40
Innovation in U.S. compensation for music's creators took a huge step forward last week as the Music Modernization Act was signed into law, but this week it's worth looking ahead to what streaming can do for small businesses. Nielsen conducted two studies earlier this year, commissioned by Soundtrack Your Brand, that showed a multi-billion dollar opportunity for the streaming revolution to add value and proper licensing to global business environments.
"Music makers are being shortchanged without knowing it," said Soundtrack Your Brand Chairman/Co-founder Andreas Liffgarden. "Consumer streaming companies have millions of customers who are actually businesses, who may be unknowingly misusing their services and not paying music makers the money they are entitled to, which is potentially in the billions of dollars."
World-wide, background music in business settings was estimated as a $12.3 billion industry, in itself. But among small businesses with at most 10 employees, Nielsen estimated that 83 percent are using unlicensed music in the workplace. Liffgarden was an executive during the start-up days of Spotify and sees this market as a promising opportunity, bringing streaming services with business background-music licenses into professional settings bound to benefit. Large brands are more likely to know better and comply, but tens of millions of small businesses with music playing are likely to be using personal accounts with services only licensed for consumer listening — about 83 percent of businesses on average.
For example in the United States, 71 percent of small business owners are under the mistaken impression that using a personal, consumer service is all the licensing they need. In the UK the figure is 60 percent. For marketing experts, this is the difference between two acronyms — B2B for business-to-business licensing versus B2C for business-to-consumer licensing. A commercial B2B license is intended to serve a larger number of listeners, as major brands already realize. In the U.S. that gap has been valued at an estimated $888 million annually.
"We weren't surprised by the results per se, but the scale of it was a little bit daunting, to be honest," Liffgarden told Rolling Stone. "The music industry at large needs to do better to educate. You instinctively know that you can't use your Netflix account and open a cinema — you'd surely roll your eyes and say, 'of course I knew that' — but the same isn't true for music." The "educational journey" that he believes in should provide benefits for all stakeholders.
Digital music piracy by consumers was viewed 20 years ago as a problem caused by technology, but now digital music royalties amount to more than half of global music revenue — because the problem was solved by technology, working with stakeholders to build a complete ecosystem. In the U.S., the Music Modernization Act helps to complete this virtuous circle.
For Soundtrack Your Brand, the opportunity to offer digital music for business is clear and the challenge is to get more than 20 million global places-of-work on board by enticing them with great service. There are many costs on commercial ledger sheets, for example janitorial service or providing complimentary coffee. Music is more than just another cost and comparatively, it is not a large cost — especially if it can be made more convenient, like a 'no-brainer.' Music's creators would clearly benefit from being rewarded with the money they don't receive from small businesses. But these businesses are also missing out by believing consumer services meet their commercial music needs.
"There's no doubt the overwhelming majority of small business owners are willing to pay to use music in their business," says Jody McKinley, North America Managing Director for Soundtrack Your Brand. "After all, it makes their business environment better. It helps create an experience for their customers or helps motivate their staff. Business owners understand that music adds value. What they don't understand is how to ethically source the music they are using in their business. We want to help fix that."
It will most likely be the benefits for small businesses that will help drive them along the educational journey. Creating an atmosphere that is good for business productivity distinguishes competitors, as shops and restaurants know. Aside from the legal liability of misusing B2C services in B2B settings, business owners are missing out by taking a passive approach to background music. Over time, digital playlists in various commercial environments should benefit from the same types of practical analysis that goes into choosing wall colors or determining how many tables or countertops are ideal. There is tremendous growth space for business creativity, backed up by data science and analytics.
Nielsen's "largest-ever international study into background music" supplies the vision and promising data to embark on a new streaming revolution — to mobilize consumers to get out of the house and go somewhere that offers a wonderful atmosphere. It's not just a matter of getting some owners to pay more for the right licenses. By helping brands stand out, music can drive customers and employees to want to spend time in their place. It's clear why that journey is a billion-dollar proposition that will help internet traffic become foot-traffic.
"Conversations in Advocacy" is your weekend digital tip sheet on music advocacy and the policies that affect music makers and their craft. New installments post every Friday.
Photo: Rob Kim/Getty Images for The Recording Academy
How District Advocate Day 2023 Uplifted Music People And Expanded With Its First Ever GRAMMY Advocacy Conference
The first-ever GRAMMY Advocacy Conference — just in time for District Advocate Day 2023 — was an effective and inspiring digest of the most pressing issues facing the music community.
Year round, the Recording Academy works tirelessly to advocate for all music people — but one day is especially important. That's District Advocate Day, whose 2023 iteration rolled around on Oct. 5. Held annually in the fall, this is the largest grassroots advocacy movement for music and its makers.
As with every year, Recording Academy members from across the country visited the local district offices of their elected representatives in Congress to discuss issues affecting the livelihoods of songwriters, performers, and studio professionals.
The key issues for District Advocate Day 2023 were AI (artificial intelligence), protecting free expression, protecting the live music experience for artists and fans, incentivizing new music via tax fairness, and providing a solution for artists' rights on radio.
These were front of mind across nearly 100 meetings throughout the U.S. — from Long Beach, California to Coral Springs, Florida; from Omaha to San Antonio; from Philadelphia to Tupelo. And that just scratches the surface of how the Academy sprung into action nationwide for all music people.
At the Recording Academy's New York Chapter Office in the Murray Hill neighborhood of Manhattan, District Advocate Day kicked off much as it did in 2022. Congressman Jerry Nadler (D-N.Y.), Ranking Member of the House Judiciary Committee, swung by said office to meet up with the New York Chapter.
In the boardroom, Academy members — in a mix of formal and casual getup — got down to brass tacks, and made heartfelt expressions before Nadler.
The discussion of free expression was framed by the Academy-endorsed Restoring Artistic Protection (RAP) Act. As for ticketing, bots were evoked as a major concern.
And regarding AI, guarding name, image, likeness, and intellectual property was of paramount concern. Nadler was receptive to these concerns from the New York Chapter, and offered co-signage to Academy-sponsored bills.
After an all-smiles group photo session in front of the New York Chapter Office — which sported some nifty new Academy-logoed flags — a group reconvened in the boardroom to watch the first-ever GRAMMY Advocacy Conference. This was just one of many such gatherings across the country. As uncertainty in Washington prevented many congressional offices from scheduling meetings, the virtual conference provided another opportunity for Academy members to connect with each other and engage with the issues no matter where they live.
Across the following hour, viewers heard directly from policymakers, industry stakeholders and fellow Academy members about the organization's crucial work in Washington.
The video included a conversation about AI between Todd Dupler, the Chief Advocacy & Public Policy Officer at the Recording Academy, and Mitch Glazier, the CEO of the Recording Industry Association of America.
After a message from U.S. Senator John Cornyn (R-Texas) about the need to overhaul the current ticketing system, Shay M. Lawson, Governor of the Atlanta Chapter of the Recording Academy, introduced U.S. Representative Sydney Kamlager-Dove (Calif.-37) and Torae, the President of the New York Chapter of the Recording Academy.
The three had a frank discussion about the need to safeguard free expression through the Restoring Artistic Protection Act, and Rep. Kamlager-Dove's historic resolution commemorating the 50th anniversary of hip-hop.
On screen, what followed was a conversation between Dupler and Nicole Elkon, the Deputy Assistant Secretary of the U.S. Department of State. This interchange had to do with music diplomacy, a crucial tool in the department's arsenal, and came fresh off the State Department's launch of the Global Music Diplomacy Initiative that the Recording Academy played an instrumental role in developing.
The final major portion of GRAMMY Advocacy Conference 2023 reflected the Academy's hardworking Songwriters & Composers Wing. The Wing's very own Sr. Managing Director, Susan Stewart, led a conversation with singer-songwriter Alex Hall, and Evan Bogart, the Chair of the S&C Wing.
After a pragmatic and necessary talk about the importance of fair compensation in the streaming age — and navigating the labyrinth of an increasingly complex music landscape — it was clear to all involved that we do this because we love the music, first and foremost. And with that, members of the New York Chapter filed out into the autumn air, ready to put that shared love into action.
Photos: Leigh Vogel/Getty Images for The Recording Academy
The Recording Academy Partners With U.S. Secretary Of State Antony J. Blinken To Launch The Global Music Diplomacy Initiative; Quincy Jones Awarded Inaugural Peace Through Music Award
The global initiative will promote diplomacy through music worldwide and will also feature the American Music Mentorship Program, which will see Recording Academy professionals and members provide mentorship opportunities to international participants.
Continuing its mission to ensure that music remains an indelible part of our culture around the world, the Recording Academy has partnered with the U.S. Department of State and Secretary of State Antony J. Blinken to help launch the Global Music Diplomacy Initiative, an international initiative that will promote peace, diplomacy and democracy through music worldwide. Using music as a diplomatic tool globally, the initiative will leverage public-private partnerships to create a music ecosystem that expands economic equity and elevates the creative economy, ensures societal opportunity and inclusion, and increases access to education. The Global Music Diplomacy Initiative will also build on existing public diplomacy music programs to create partnerships with American companies and nonprofits to convey American leadership globally and create connections with people worldwide.
The Global Music Diplomacy Initiative also includes the American Music Mentorship Program, a partnership between the State Department and the Recording Academy, which will bring international mid-career music industry professionals and musical artists to the United States for mentorship and networking opportunities. The program will invite Recording Academy professionals and members to provide international participants with mentorship opportunities and professional development.
See a full outline of the Global Music Diplomacy Initiative below.
Secretary Blinken announced the Global Music Diplomacy Initiative Sept. 27 during a lively celebration at the U.S. Department of State in Washington, D.C. He signaled the start of the inaugural event by highlighting its attendees. "We have a few dignitaries come through this building, but it is a special treat to have so many members of music royalty here tonight," he said excitedly.
The evening engendered a melodic blend of music, peace and policy. The private event featured breathtaking performances from Dave Grohl, Herbie Hancock, Mickey Guyton, Armani White, and many other leading American and international artists. U2's Bono shared a special video message from Las Vegas as well.
Singer/songwriter Aimee Mann performed her 1999 song "Save Me" with the admission that she was "deeply honored but also a bit freaked out to be here."
Perhaps less nervous, Secretary Blinken added that he couldn't "pass up" the one-in-a-lifetime chance to "combine music and diplomacy," as he performed Muddy Water's 1954 classic, "Hoochie Coochie Man."
"If this doesn't clear the house, I don't know what will," Blinken said playfully ahead of his performance.
A collaboration between the Department and the Recording Academy, the award recognizes and honors an American music industry professional, artist, or group that has played an invaluable role in cross-cultural exchanges and whose music work advances peace and mutual understanding globally.
"His work, his actions continue to advance peace through music, and I am sure they will for generations to come," Mason jr. said. "It's my true honor to recognize my friend and mentor, Mr. Quincy Jones, as the first-ever recipient of what will now and into the future be known as the Quincy Jones Peace Through Music Award."
The Global Music Diplomacy Initiative was developed pursuant to the bipartisan Promoting Peace, Education, And Cultural Exchange (PEACE) Through Music Diplomacy Act, which was championed by the Recording Academy and its members in 2022 at GRAMMYs On The Hill and during the annual grassroots District Advocate Day. The legislation, introduced by House Foreign Affairs Committee Chairman Michael McCaul (R-Tex.), was passed by Congress and signed into law by President Biden in December 2022.
Here's a complete breakdown of the Global Music Diplomacy Initiative:
- American Music Mentorship Program
The American Music Mentorship Program, a partnership between the U.S. Department of State and the Recording Academy, will bring international mid-career music industry professionals, which may include musical artists, to the United States for mentorship and networking opportunities, with an aim to cultivate a professional music industry ecosystem locally and globally, to support creative talent, and to strengthen the creative economy globally. It will leverage the networks and experience of Recording Academy professionals and members to provide international participants mentorship opportunities, boost their technical skills, and build the foundation for professional networks. The first American Music Mentorship Program will be held in the fall of 2024.
- Fulbright-Kennedy Center Visiting Scholar Award in Arts and Science
The Fulbright Program, the United States' flagship international academic exchange program, will collaborate with the John F. Kennedy Center for the Performing Arts to create a new fellowship opportunity for foreign scholars. The new Fulbright-Kennedy Center Visiting Scholar Award in Arts and Science will focus on the intersections of the arts (music, dance, theater, etc.) and science, including how the arts can contribute to individual and global health and well-being, and the environment. An award competition will be announced in fall 2023, and the Kennedy Center will host the first scholar in academic year 2024-25.
- Boosting English-Language Learning Through Music
Recognizing the strategic importance of English-language learning overseas, especially for youth and underserved communities, the Department will incorporate music into its existing $40 million investment in English-language learning worldwide, including through exchanges, curriculum, and scholarships to provide access to English-learning classes for promising students between the ages of 13 and 20.
The Department will augment broader global English-language learning by supporting Sing Out Loud, a program that provides resources for teaching English through music in collaboration with American Music Abroad (AMA), bringing music and lyrics into classrooms across the world.
In addition to the Secretary's announcements, the Global Music Diplomacy Initiative will include vast programming around the world, including:
- Arts Envoys to Travel to the Middle East, People's Republic of China
Herbie Hancock, along with Dee Dee Bridgewater and the Herbie Hancock Institute of Jazz Ensemble at the University of California – Los Angeles (UCLA), will be performing in Jordan in October to celebrate the 60th anniversary of the 1963 Jazz Ambassador tour of the Duke Ellington Orchestra.
The Herbie Hancock tour will then travel to Saudi Arabia for a four-day Arts Envoy program – the first of its kind between the United States and Saudi Arabia.
From November 9-18, 2023, The Philadelphia Orchestra is slated to commemorate the 50th anniversary of its historic 1973 tour of the People's Republic of China (PRC) with Ensemble Performances and Residency Activities in multiple cities in the PRC.
- Ten American Bands to Travel to 30 Countries Starting in October Through American Music Abroad; AMA Academy Cleveland to Host Young Professional Musicians from Ukrainian Diaspora
Beginning in October 2023 and representing multiple genres, Birckhead, The Beatbox House, The Invisibles, Marielle Kraft, Matthew Whitaker, Pipeline Vocal Project, Raining Jane, Sihasin, Sub-Radio, and Tap Music Project will travel to 30 countries from October 2023 through June 2024.
In November 2023, the 2023 American Music Abroad Academy Cleveland will bring together young professional musicians from the Ukrainian diaspora and around the world for collaboration and mentorship opportunities from American instructors with a focus on cultural preservation through music. Learn more about AMA here.
- Next Level to Use Hip Hop in Nigeria, Bring International Artists to the U.S. to Focus on Conflict Transformation
In September 2023, four U.S. hip hop artists focusing on conflict transformation will travel to Lagos for a two-week Next Level Academy. In addition, 10 international participants will travel to Washington, D.C. and New York, New York for a two-week professional development program on conflict transformation through hip hop. Learn more about Next Level here.
- Scaling Social Entrepreneurship Projects, Strengthening Creative Economy Through OneBeat
From November 6-20, 2023, musicians from Ghana and Nigeria will come together to collaboratively create and discuss how music can bring people together through social entrepreneurship projects, as part of the OneBeat program. Learn more about OneBeat here.
- Harmundi International Music Summit to Welcome Students from Every Continent in November 2023
Virtually connecting more than 60 international students from every continent through music, the Harmundi Summit will provide intense music training, cross-cultural collaboration, studio recording, and live performances under the mentorship of world-class musicians and producers. The Summit, which will take place November 3-5, 2023, will be led by alumni of the Department's exchanges, and is part of the Department's Citizen Diplomacy Action Fund. This fund provides grants of up to $10,000 for public service projects that utilize the skills, knowledge, and networks exchange alumni gained through their exchange experiences.
Learn more about the Global Music Diplomacy Initiative.
Photo: LEON BENNETT/GETTY IMAGES FOR THE RECORDING ACADEMY
The Copyright Royalty Board Has Published Their Determination On Phonorecords III — Here’s What That Means For Songwriters
This determination means songwriters will start to receive back pay on royalties they were owed from 2018-2022.
After a yearslong process, the Copyright Royalty Board (CRB) has officially published their determination on Phonorecords III — meaning songwriters will start to receive back pay on royalties they were owed from 2018-2022.
As the Recording Academy covered earlier this year, the CRB announced a confirmation of the mechanical royalty rate increase from 10.5% to 15.1% for the Phonorecords III period (that covers 2018-2022). Despite that ruling occurring earlier this year, the process was not officially complete until the determination was published this month.
This is a monumental win for songwriters and composers, who will soon begin to receive the additional owed royalties. To help break down some common questions, the Recording Academy put together a brief FAQ on what this means for songwriters:
How much will songwriters receive?
While the final calculation is not publicly known, some reports estimate that digital streaming services will owe as much as $200 million to songwriters and publishers from Phonorecords III.
When will songwriters begin to receive the backpay?
Songwriters can expect to begin to receive their share of the owed royalties no later than February 2024 — streaming services have six months from August 10 to make arrangements and payments for the mechanical royalty rates they owe songwriters from 2018 to 2022.
How will songwriters collect the backpay?
The Mechanical Licensing Collective is expected to pay any owed royalties that were incurred in 2021 or 2022, which is when it was operational following the passage of the Music Modernization Act.
For royalties owed from 2018 to 2020, the digital platforms will be responsible for making proper payments and may contract with a third-party vendor for processing.
Will there be any oversight to this process?
The U.S. Copyright Office and Congress are monitoring this important process. In addition, stakeholders including the Recording Academy and its Songwriters & Composers Wing will work to ensure that payments are paid properly and timely.
The Recording Academy has been vocal in advocating for songwriters and composers throughout this entire process and has continually pushed for these artists to receive a fairer royalty rate for their works.
Now that the determination has been publicly released, payments to songwriters and composers must be done in an efficient and accurate manner.
The Academy intends to continue following the process and advocating for these artists to receive the payments they have earned.
Image courtesy of the Recording Academy
District Advocate Day Is Back On Oct. 5: How The Annual Advocacy Day Will Benefit Music People Worldwide
Year over year, District Advocate Day has directly led to positive change for the music community. Here’s how to get involved on Oct. 5.
The Recording Academy's District Advocate Day is returning on Thursday, October 5th.
District Advocate Day, the largest grassroots advocacy movement for music and its makers, gives Recording Academy members an opportunity to visit the local district offices of their elected members of Congress and discuss the pressing issues facing the music community.
Last year, almost 2,000 Recording Academy members participated in District Advocate Day — making it one of the largest District Advocate Days to date. Over the course of the activation, Academy members reached 75 percent of Congress by meeting with nearly 200 congressional offices across 45 states.
Year over year, District Advocate Day has directly led to positive change for the music community. In 2022, Recording Academy members advocated for the passage of the PEACE Through Music Diplomacy Act, a bill designed to use music and music-related global exchange programs as a tool to build cross-cultural understanding and advance peace abroad. Just two months later, Congress passed the PEACE Through Music Diplomacy Act as part of the National Defense Authorization Act (NDAA) of 2023.
In 2020, Recording Academy members successfully urged Congress to provide billions in COVID relief for music makers and music small businesses when they needed it the most. And in 2019, the House of Representatives passed the CASE (Copyright Alternative in Small Claims Enforcement) Act just weeks after we advocated for it during District Advocate.
This bill, which passed the House of Representatives 410-6 before getting signed into law, created a small claims court for copyright cases — a huge win for artists who otherwise did not have the means to protect their work from infringement or theft.
This October, Recording Academy members will continue these efforts as they advocate for key issues facing the music community such as artificial intelligence and decriminalizing artistic expression.
Registration is open now until September 8th for all active members of the Recording Academy including Voting, Professional, and Student members. Members interested in and registering, or to learn more, can click here.
Even if you are not a member of the Recording Academy, you can still fight for creator’s rights by contacting lawmakers in support of music makers. We also encourage you to continue checking out our Advocacy page for additional ways to stay involved!