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Swings & Carousels

Many in-store music providers will give stores a cheap music subscription and only share the revenue from the music subscription with music creators.

Let us explain.




Sell hardware expensive and music cheap

Unlike consumer services like Spotify and Apple Music, that only sell one thing (a subscription), in-store music providers sell a whole suite of products, such as in-store music subscriptions, speakers, amplifiers, players, installation, project management, curation, and so on. This means that revenues come from multiple products that in turn have different vendors. It also introduces an arbitrage on margins. Some products are better margin than other products and that creates an incentive for B2B providers to favor some products over others.

Music licenses often have a revenue-share component based on a percentage of the in-store music revenue. In any revenue-share construction, the definition of "revenue" is important. If you exclude certain revenues, your actual payout gets lower since the portion of money to be shared is smaller.

The most common trick here is to lower the price of the music component since that’s the revenue base from which there is a revenue share due to rights holders. Many in-store music providers will give stores a cheap music subscription and only share the revenue from the music subscription with music creators.

Then, in parallel, they also sell hardware, project management or curation services. The revenues for these services are not shared with the music industry. Basically, "what I lose on the swings I get back on the carousels."

The net result is that creators are not getting paid for the value that music creates.

To obfuscate even further, the non-music revenue can come from a separate legal entity altogether so that it’s even harder for rights holders to audit and get transparency. But even if services and goods are provided by different business entities, they are owned and controlled by the same ownership in the top so revenues get consolidated.

The competitor proposals that we’ve seen speak a clear language. Creators are losing out and in-store music providers are using this trick to increase their profits.

How is Soundtrack Your Brand any different?

For one, our moral compass. For us, this is just common sense and decency.

Also, we are a music company. We don’t sell hardware, speakers or amplifiers. This means that music is what we do and what we make money from. This puts us in the same boat as music creators.