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Offline fraud

It's a little like comparing airwaves to tapes. Let us explain.




Store music offline but only have a non-interactive license.

Many of the national CMO/PRO blanket licenses which are available and being used by in-store music providers are based on a radio paradigm that allows for streaming only. (It's a little like comparing airwaves to tapes). This type of license is often referred to as a "non-interactive license" and was created to allow radio stations to broadcast simultaneously over both Internet and radio spectrum (FM). The main concern has been to make sure that the offerings do not substitute or cannibalize CD, download or paid-for streaming sales.

Two fundamentals with this type of license are that the music cannot be interactive in terms of freely selecting tracks, skipping and looking ahead in the playlist. The usage should be "like radio." The other difference is that the music cannot be stored offline on a device (since radio cannot be stored either).

The prime example is Sound Exchange in the US. This non-interactive license does not allow for storing music offline on the player or device. It’s a simple rule. Music can only be streamed, not stored.

Now, if you want to select tracks on-demand and you want to store music you need a full interactive license. The caveat is of course that the full interactive license is more expensive since it allows for more functionality.
But we see a lot of in-store music providers using a non-interactive license, but then selling a product that would require a full interactive license.

The most common feature is the offline mode. Commercial environments like stores, bars and gyms are usually busy, with a lot of online devices in a small area - connectivity is often restricted or reserved for credit card payments and POS-systems (Point of Sales). This means the music service used must have an offline possibility in order to play uninterrupted. If there was a pure streaming music service only, chances are that it would be unstable and a very poor user experience, with skipping and lagging music. That is why we see most tenders and Request For Proposals (RFPs) stating offline as a technical requirement.

In plain language, our competitors use cheaper, non-interactive licenses but then build a product that requires a more expensive full-interactive license. This is wrong on multiple levels. It's poor ethics and in breach of most CSR policies in existence. It's also a legal infringement of copyright and a violation of music licenses.

Finally, it's intentionally misleading stores and brands who cannot see the nuances of how a functioning industry should work.

How is Soundtrack Your Brand any different?

We have direct agreements with record labels and publishers. In these licenses, we are paying a premium (and happily doing so) for the offline rights we need and use.