You’re not alone if you use Spotify or any other music service in your business, but is it legal? We see a lot of conflicting information out there and created this blog post to clear up the confusion.
The first element of confusion is whether Spotify Business or Spotify For Business even exists. It did for a short period in Scandinavia, but in 2013, Spotify eventually co-founded a startup called Soundtrack Your Brand to target the business market and its particular needs and ceased Spotify Business. Why did Spotify not pursue this lucrative business market?
If they wanted to stay ahead in the competitive consumer market, they needed to stay focused on that core consumer market— the B2B space comes with its complications and licensing restrictions that could have served as a possible distraction for the company.
Let’s have a closer look at licensing restrictions and complications. Item 3 in Spotify’s terms and conditions states: “we grant to you limited, non-exclusive, revocable permission to make personal, non-commercial use of the Spotify Service”. Non-commercial use means you cannot play Spotify publicly in a business or commercial setting such as in a restaurant or retail location. The service is meant for personal use only. Royalty rates for music used in public spaces are 3 to 4 times more than that for personal use. The logic being you are using the music to enhance your business operation and music owners and artists should be compensated fairly for it.
Spotify would need to obtain and maintain special commercial licensing deals with record labels, publishers and artists to offer a Spotify Business tier. Taking into consideration all the different regions of the world, licensing procurement can get very complicated.
It is the opinion of the author of this post, that there is possibly another reason why Spotify no longer offers a business tier under its own name. Licensors, record labels, publishers et al, wanted clarity between business and personal use when it comes to music. Customers who pay for a Spotify subscription might believe that because they are paying a monthly subscription, they are getting a business license. To avoid confusion, I’m suggesting Spotify was encouraged to not pursue ‘Spotify Business’ by licensors to avoid blurring the lines between personal and commercial use. Instead, Spotify chose to cofound an offshoot with a different name to have a clear demarcation between the two. Hence obtaining higher rates for music used in commercial settings.
If a company uses Spotify without having a proper commercial license from the rights holders, they are technically breaking the law. By doing this, they are putting their business at risk of costly lawsuits and fines. The fact is most small business owners are not aware of copyright laws for business use and more needs to be done to educate the market.
Licensing aside, when it comes to music for business, special software tools are required. Things like music scheduling, filters to block explicit lyrics, and central control for several locations are instrumental in enhancing a business’ brand experience and simplify operations. These are features that do not exist on the Spotify platform.
Spotify Business becomes Soundtrack Your Brand
In 2013, Ola Sars and Andreas Liffgarden, music streaming business veterans, and Spotify had the vision of creating Soundtrack Your Brand. The aim was to create a streaming service dedicated solely to helping businesses with their music. Over the ensuing years Soundtrack Your Brand expanded its music licensing deals and enhanced the platform’s software features to be one of the world’s premier services. Based in Sweden, the service is available in over 70 countries. If you want an overview of all of the features I invite you to head over to our Soundtrack page here.