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How to Help Small Businesses Navigate Copyright Law

Andrew Martins
Andrew Martins

Copyright law makes it tricky for business owners to broadcast music at their stores. Find out how Feed.fm helps SMBs pump out the tunes without landing in hot water.

Music is so important to us that it can be found everywhere. Watching a movie? There's a soundtrack. Playing a game? Here's a sweeping orchestral score. Shopping? Take in some smooth jazz as you browse the aisles. Music is big business.

Studies have shown that a good shopping soundtrack can get a person in the mood to buy, so it only makes sense that so many businesses play music at their locations. While Spotify, Pandora and Apple all have their own business-facing music streaming services, many small businesses unknowingly break the law by playing unlicensed music, sometimes leading to expensive court battles and steep penalties. It's a situation that has played out a lot in recent years – one that Feed.fm's plucky company of 12 employees is offering to help small businesses avoid.

“It should come as no surprise that using music is an important part of any consumer engagement strategy," said Feed.fm CEO and co-founder Jeff Yasuda. "However, licensing, curating and integrating music in a digital format is highly complex from a legal standpoint – and expensive. We created Feed.fm to make it easy for businesses to use music legally and remove the difficulty around licensing."

For Yasuda, his company's mission of making sure both sides of the music industry fairly get theirs is a personal calling. Though his early career saw him working a relatively stable job on Wall Street and in a venture capital firm, the love of writing and playing music that he developed in his early teens has stayed with him.

Having experience both as an artist and as the owner of a record label and management company, Yasuda understood the needs of businesses and artists as they pertained to music licensing. When he got a chance to dive into the "wild and crazy world of digital music" following a musically tinged sabbatical that took him around the world, he eagerly took that opportunity.

"During my travels, particularly in South America, I took a music lesson in every city that I visited," he said. "Music became the mode of communication. I grew a deep appreciation for these musicians and how hard it is to make a living creating what I believe to be the most powerful art form."

After learning that "life is too short not to pursue what you love to do," Yasuda returned to the U.S. and, along with the company's other founders, created Feed.fm.

Finding their own tempo in an established industry

The world of music licensing is a tricky one, with legal agreements that often have specific conditions for when you can and cannot play an artist's music. Without the right agreement in place, lawsuits can emerge, or entire products can come off the shelves. In the early years of digital music and the accompanying world of digital music licensing, Yasuda said, things were more like the Wild West.

"There was an old saying with the early music entrepreneurs about music licensing: 'Infringe, get big, and then ask for forgiveness.' This generally has resulted in shambles," he said. "The graveyard is long, deep and wide with the corpses of music startups that ran into problems around licensing."

When Feed.fm was first created, Yasuda said the San Francisco-based software-as-a-service company focused more on aspiring music companies that needed help navigating the licensing process. Over time, that thought process changed.

"We later realized that there was a much broader opportunity with brands that believe in the power of music to build consumer engagement, but these brands are already in the process of running their own businesses and did not have the time or resources to spend time on understanding licensing. Whether it's selling clothing like American Eagle Outfitters or coming up with innovative fitness routines like Tonal or Mirror, these brands need to focus on what they are best at doing. Licensing music is not one of their core competencies."

With the small company's team of "legal eagles and DJ musicology fanatics," Feed.fm has found itself in the middle of a digital music industry that continues to grow each year, with Americans expected to spend upward of $42 billion in streaming music services this year alone.

While any talented group of lawyers and music industry insiders with the right knowledge and connections could probably offer similar services, Yasuda said Feed.fm sets itself apart by "providing a top-tier experience" in three specific ways. First, the company handles all the "brain damage around music licensing and creation," letting businesses focus on their strengths. Secondly, it strives to "make it easy for our partners to integrate music into their products" through software development tools. Finally, Feed.fm draws from its clientele's demand that the company proves the licensing it provides boosts key performance indicators.

"We need to provide the relevant data and actionable ways to use our service to boost customer retention," Yasuda said.

Since the industry is dominated by the Spotifys, Pandoras and Tidals of the world, Feed.fm serves as a sort of middleman between those services and businesses. Yasuda said the company not only works with rights holders who work on behalf of the artists, but also those big companies to ensure licensing efforts run smoothly for everyone involved. Though Feed.fm is a small team, he believes the bigger players in the digital music industry see the company as partners, since "we both try to innovate."

"Keep in mind, while [Spotify and Pandora] are huge companies, their area focus is on providing an awesome consumer experience for music listeners. They currently do not have the necessary infrastructure, tools and support to help businesses that are trying to use music in the digital realm. We are always looking for ways to partner with companies that believe in the power of music to build engagement."

In recent months, most retail locations have had to close their doors to help fight the ongoing coronavirus pandemic. While many of its clients are based in physical spaces, a major part of Feed.fm's business is for things like fitness and workout apps. Since most people are stuck indoors, many have turned to such apps to get their workouts in, leading to a surge in new customers for many of Feed.fm's clients.

"Given that Feed.fm is the leader in providing music solutions to fitness apps, we are seeing a dramatic increase in music streaming and activity," Yasuda said. "Thus, our business has actually improved during this challenging time. We are working diligently with the fitness community to help provide music solutions at a low cost in their time of need."

Learning the score as a small business

Having created small businesses before, Yasuda has applied that knowledge to help Feed.fm better serve the business community as well as artists. One of the main practices that drives the company forward, he said, is something that every small business could benefit from – introspectively looking at what keeps the business running.

"Like any startup, every day we think about what drives our business and how we can continue to succeed. The lifeblood of our business is our customers, and we are constantly talking to them to learn about where they are going and how we can continue to support them."

Understanding the needs of its clients and the rights holders helps Feed.fm focus on its mission and discuss "how to innovate in the music industry." That kind of clear vision on a mission statement can serve any small business or entrepreneur.

Having gone through the first internet boom and bust of the late '90s and early 2000s, Yasuda said Feed.fm remains a small company because it doesn't want to fall into the trap of "growth at all costs" like so many tech startups do.

"It's important for companies to focus on building a viable business that can exist in the long term regardless of capital. It's interesting to note that many CEOs of companies that were able to raise large rounds often discuss success in terms of the number of employees they recently hired as opposed to business-based metrics such as revenues or profitability. This has been an unfortunate consequence of a friendly capital-raising environment."

While Yasuda anticipates that fundraising for small businesses will be difficult in the coming quarters, he thinks that may be a good thing, since it will give startups a chance to "focus on long-term business fundamentals and non-dilutive financing."

Still, as the CEO of a small business, Yasuda said he still "loses sleep" over two metrics: revenues and cash flow. As they are for many small business owners and entrepreneurs, those two figures are always at the top of his mind.  

"The absence of revenues is often an indication of a lack of product-market fit. The lack of cash flow and a dwindling runway is a sign that your business is about to shut down. Funding can help extend that runway, but it's certainly not a sign that your business is viable."

Considering how often startups fail, Yasuda said it's important for entrepreneurs to "enjoy the process and learnings that come with starting your own business. It takes tremendous skill to take an idea and execute and build it into a viable product or service that a customer will actually buy. It's even harder to take that initial product and scale it into a long-term and healthy business.

"I've learned a lot about myself, my challenges and my own abilities, and [I] do my best to make decisions based on partial information. While creating a startup has been the hardest thing I've ever done personally and professionally, it has also been the most rewarding, and I wouldn't trade it for anything."

Andrew Martins
Andrew Martins,
business.com Writer
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I am a former newspaper editor who has transitioned to strictly cover the business world for business.com and Business News Daily. I am a four-time New Jersey Press Award winner and prior to joining my current team, I was the editor of six weekly newspapers that covered multiple counties in the state.