What is in-store radio and how does it work?

Retailers usually play music in their stores to create a
pleasant atmosphere for customers, so that they enjoy shopping – and buy more!
Often this just means using a playlist or putting on a CD, but most store
chains and well-known brands have their own radio stations which provide
specialist music for retail. What does this mean for artists, record labels and
publishers?

What is in-store radio and why do businesses use it instead
of FM radio?

Businesses use closed circuit radio instead of FM radio. This is so that they
can play music that suits their marketing targets and avoid broadcasting
advertising from their competitors. These closed circuits are managed by
“in-store radio” companies. In-store radio is a very effective way of getting
their message across to their customers, as well as creating the right kind of
atmosphere for their business. In-store radio companies create playlists tailor
made for a certain brand, store or public place to give a certain atmosphere.
They might enhance this by making advertisements that can be added between
songs, or by including information about store opening times or news about
special offers or discounts.

How can I get my music on in-store radio?

Artists tend not to know much about in-store radio, even
though they often hear it, and even publishers and record labels are often
unfamilliar with it. It has traditionally been completely separate to the
mainstream music industry, with many in-store radio companies sourcing music by
using their own music libraries, or by looking at the most popular tracks on
iTunes. This makes it very difficult for artists to pitch their music to
in-store radio producers, even with record label and publisher support.

In-store radio broadcasters choose music for businesses
based on several factors: they need music that is consistently high quality,
that is suitable for background use and that will create the right atmosphere
in the store. Soundreef is a popular choice for in-store radio companies: since
all our music is hand picked by human music supervisors, we can guarantee the
consistently high quality that in-store radio producers need, so our artists
get plenty of airtime!

How can I get paid when my music is used on in-store radio?

When an in-store radio producer uses your song, you need to
be paid. To get paid, you need to be registered with a collecting society (for
more about collecting societies, see our previous post). The store
broadcasting the station usually buys a ‘blanket licence’ from the collecting
society, which means they pay an annual fee for all the music they use. The
collecting society then divides this fee between their members.

However, since the collecting societies often don’t ask to
the in-store radio companies which music they are using, and how often they are
using it, they can’t divide the royalties according to which songs are played.
This means that they have to find a way of estimating this so that they can
divide royalties among artists, record labels and publishers. These estimates
often result in artists being paid an unfair rate, with many not being paid at
all! For more information on how this works, see our previous blog post.

How can I make sure I get paid when my songs are used as
in-store music?

When store chains use in-store radio, they have to pay
collecting societies for the music that is used. Soundreef’s artists get paid
every time their music is played on radio in store. This is because in-store
radio companies who use Soundreef instead of their national collecting society
submit their logs – lists of every track they’ve played – to us, so that we can
use it to split the license fee they pay fairly among our artists. Our
high-tech, transparent royalty collection and payment system allows artists to
see when their tracks have been used and where, even when this is on in-store
radio.

Collecting societies could also use these logs,
but don’t seem to do this. Why? Perhaps they should tell us! Collecting
societies should be paying fairer music royalties to artists when their songs
are used on in-store radio. They need to take advantage of new technology that
allows them to work out which music is being played, and how much artists
should be paid. To make the most of your music, and get the royalties you
deserve when your music is used by businesses, register with Soundreef at http://registration.soundreef.com/,
or find out more at http://www.soundreef.com/en/faq.