A key challenge facing Soundtrack has been a reluctance among business owners to move away from private accounts to a licensed music service that is about three times more expensive.
Sars hopes that industry organizations will now try to regulate the market in a similar way that sports broadcasters such as Sky Sports have done with pubs and bars showing Premier League soccer games in the U.K.
“Now that we have an offering that is on par with consumer services, there is no reason to use those illegaly,” Sars said. “We have shown that there are some 20 million businesses that are using consumer accounts. That’s about $2.7 billion in royalties that labels and publishers miss out every year.”
Sars admits getting licensing agreements in place has taken longer than he thought, and meanwhile, Soundtrack has been forced to cut jobs and shift its sales setup amid mounting losses. The company introduced a function to pause subscriptions for a limited period of time after the coronavirus pandemic impacted its end markets.
“We’ve had small business owners calling us, crying,” Sars said. “80% of clients that had to shut down paused their subscriptions instead of canceling. Those who canceled were probably hit so bad that they weren’t going to make it through.”
Source: To read full article Bloomberg