Music forms a key part of a store’s brand and image, enhancing the in-store environment and keeping customers in-store longer and spending more. How can you ensure the brand’s beat is in tune with the law?
According to research completed in the UK by music licensing group, PPL, 51 percent of customers surveyed said they would spend more time browsing in a store that’s playing music, while 76 percent agreed they feel more relaxed in retail stores that play music.
But how much of what we hear through speakers as we walk into a store is being played legally?
It’s easy for businesses to create a series of playlists on popular music platforms like iTunes and Spotify, and stream this for customers’ listening pleasure. It’s just as easy for business owners to play music from their iPod or even a legitimately purchased CD. However, it’s important to understand that these methods are illegal in a commercial environment.
Australia has very strict regulations when it comes to publically broadcasting music. Businesses that play music in their premises are required to pay royalty fees to the Australasian Performing Right Association Limited (APRA), as well as the Phonographic Performance Company of Australia (PPCA).
I’m often surprised when speaking with owners and managers of franchise businesses, that many operators are not meeting these requirements, usually due to a lack of knowledge in this area.
However, no matter the reason, if your business is found to have unlawfully authorised copyright infringement by publically playing music for which you have not paid royalties to use, you could potentially be exposed to fines of up to $60,500 and up to five years’ imprisonment. Authorities also have the power to issue fines of up to $1,320 for infringing copyright by unlawfully playing music, as well as to confiscate the device on which it’s played.
WHO IS LIABLE?
Understanding the law when it comes to royalties and copyright infringement of music is especially important for franchisees operating a multitude of sites. That’s because the greater the number of venues that are proven to be broadcasting music illegally, the more serious the penalties.
If a franchisee plays music in-store that’s been supplied by the franchisor yet the relevant royalty payments and licensing required have not been put in place, the franchisor is liable for this. However, if a franchisee disregards the music supplied by the franchisor and plays his own music in-store, without completing the relevant legal requirements, the franchisee is at fault.
A music solution in the form of an app is particularly ideal for franchise businesses. Franchisors can choose the playlists that best reflects their brand, yet franchisees have the ability to customise the music at a store level. Often, the music that works well in a downtown location is slightly different to the music required for a suburban store. For example, a coffee outlet in the heart of the city will experience its peak traffic prior to 9am, yet a shopping centre site might not open until after 9am. Franchisees require the flexibility to select what music they play and when, yet within parameters set by the franchisor.
While its most convenient from some franchise businesses to have access to several ‘off-the-shelf’ playlists that will suit most businesses, it’s important larger businesses have access to bespoke monthly playlists that are perfectly reflective of the brand’s unique identity, specifically customised by its in-store music service.
Music has a profound effect in a retail environment – it helps keep staff motivated throughout the day and provides businesses with a means to emotionally connect with customers. Music enhances the in-store experience and research shows that it increases sales.
Just be sure to play music legally – otherwise it will cost you money, instead of making you money.
Dean Cherny is the founder of StorePlay