How to Choose the Right Music Technology

INTRODUCTION
HOW MUSIC GETS INTO STORES
	Home Grown Solutions
	Music Services
HOW TO CHOOSE
	What drives the price
MIXED PLATFORMS
OTHER CONSIDERATIONS
	Licensing
	Multi-Zone
	Impact to store personnel
	Professional sound system
IMPLEMENTATION
	Planning
	Rollout
	Ongoing Support
SUMMARY
ABOUT THE AUTHOR

Introduction
So you have this amazing custom music channel with powerful promotional and brand messaging! Congratulations!

Now, how do you get it to your chain of stores or restaurants and, ultimately, to the ears of your customers?

The answer depends on some key factors:

	•	Existing IT infrastructure
	•	Location specific constraints
	•	Number of locations
	•	Audio quality requirements
	•	How your chain is organized
	•	Need for different messaging or music for each location
	•	Distribution costs

For your chain, there might be more than one answer.

	•	Some locations have broadband, some don't even have dial-up
	•	Locations might be in strip malls, inside of arenas, malls, or casinos
	•	Some locations need special messaging, while others don’t

There is no single right answer for all locations or all chains. Fortunately, there are options to meet just about any unique set of needs.

This paper will explore the various ways music is distributed and played in stores with specific emphasis on solutions appropriate for multi-location chains.

How Music Gets Into Stores
Small retailers and individual location owners play background music in their retail or restaurant locations via:

Home Grown Solutions

Pros

Cons

Considerations

AM/FM Local Radio - Local Terrestrial Radio broadcasts using a tuner at the location.

•	Nearly free

•	Competitor ads can run in your store!
•	Music may not be appropriate
•	Staff controls music selection
•	Poor audio quality

•	Could be in violation of license agreements, depends on size of location and how many in chain

CDs, Tapes - CDs delivered to a location, loaded by the staff, and played (randomly or in sequence).

•	One time investment, no ongoing costs

•	Music may not be appropriate
•	Staff can control music selection
•	Staff often fails to properly load even a well-thought-out program
•	Dilution of the music—deep tracks in CD are usually not well known

•	Could be in violation of license agreements, depends on size of location and how many in chain
•	This is required in some locations because of existing, dated playback equipment

iPod or MP3 player - iPod hooked up directly to the sound system.

•	You choose music
•	You can randomize or create playlists

•	Audio Quality only as good as original source
•	Staff controls music selection. (skipping, etc.)

•	In violation of license agreements
•	$12,000 per violation (how many songs on your iPod?)

Most chain stores and restaurants contract with a music service to provide:

•	Music distribution	•	Music programming
•	Location licensing	•	Messaging production / coordination

Music Services

Pros

Cons

Considerations

Satellite – Digital music is broadcast via Satellite to a specialized dish and receiver in the store.

•	High Audio Quality
•	Relatively low monthly costs
•	Requires no Internet connection, but may require a dialup phone connection

•	Not custom music—limited to pre-made playlists of content (channels)
•	Most services allow staff to select channel
•	Minimal messaging options
•	Satellite reception not available in all retail locations
•	High installation costs—dish, cabling, etc.
•	High player costs

Generally useful if you:
•	Do not need custom music
•	Do not need brand-imaging messaging
•	Do not need location-specific messaging
•	Have many, many locations

You will need to consider whether you have roof rights to mount a dish.

Streaming (Internet / intranet) – Digital music is streamed via IP connection to a streaming appliance or PC / Mac with appropriate software in the store. For Intranet implementations, the music source is often hosted at the company headquarters. For direct streams, it is an Internet-based source.

•	Medium Audio Quality
•	Time-synchronized playback (nearly synchronous music and messaging playback across all locations)
•	In store equipment minimal and low cost
•	Custom Music and Messaging available
•	Low installation costs

•	Requires broadband Internet connection in every location
•	No Dialup available
•	Music quality is affected by available bandwidth
•	Bandwidth costs
•	Playback interruptions based upon connectivity
•	Store-specific messaging can dramatically increase the number of streams required

Things to consider:
•	Do you need store-specific messaging?
•	Do all of your locations have reliable broadband Internet/intranet connections?

Store and Forward (Internet / intranet) – Digital music is downloaded at night to a playback device in the store. This is usually an appliance or PC / Mac with appropriate software, which caches the music files locally and plays back during business hours based upon playlists.

•	High audio quality
•	Relatively low monthly costs
•	Maximum flexibility in messaging
•	Low Installation costs
•	Versatile from 5 stores to 5,000
•	Some services offer a dialup option
•	Can be updated daily

•	Medium player costs
•	Internet connection required (dialup sometimes available)

This option is very flexible and has reasonable cost factors.

Most digital signage providers use some version of this technology.

Time-Shifted Playback (Internet / intranet) – Digital music is partially downloaded at night to a playback device in the store. This is usually an appliance or PC / Mac with appropriate software, which caches partial music files locally. Playlists are streamed to the device along with the remainder of each song during business hours for playback.

•	High audio quality
•	Relatively low monthly costs
•	Maximum flexibility in messaging
•	Low Installation costs
•	Versatile from 5 stores to 5,000
•	Less connectivity required than streaming
•	Can be updated hourly

•	Medium player costs
•	Internet connection required
•	No dialup option

This option is very flexible and has reasonable cost factors.

It does require sophisticated software to drive it, but the service providers will generally have made that investment.

Media Exchange – Digital music is distributed on replaceable media (memory cards, tapes, DVD, hard drives, etc.) This is usually implemented as a media exchange program where media is mailed back and forth on a periodic basis.

•	Low initial cost
•	Requires NO connectivity or reception

•	Mailing costs
•	Media costs
•	Labor costs
•	Staff often fails to properly load even a well-thought-out program

This is best suited to locations with no connectivity options.

How To Choose
The chart below summarizes the relative strengths and weaknesses of each delivery method. A quality selection process would follow these general steps:

1.	Inventory your locations:
	•	Existing equipment (sound system, music source, etc.)
	•	Available connectivity and its location in the store
	•	Note any constraints
2.	Document your goals related to a music service
3.	Document your goals related to messaging
4.	Consolidate your goals and inventory into a short-form RFP (Request for Proposal)
5.	Gather a short list of vendors that can meet your basic requirements (see chart below)
6.	Send the RFP to your short list of vendors, ask for an “all-in proposal” so you can see all pricing at once and compare apples to apples
7.	Evaluate the responses carefully
8.	Select a Music Service vendor and work with them to:
	•	Determine your licensing obligations
	•	Develop a project plan for implementation
	•	Create an agreement or a term sheet for final pricing, terms

How To Budget
In addition to the delivery mechanism, there are several other factors that drive the “total solution price” for a music service:

	•	Number of Locations
	•	Licensing costs
	•	Equipment costs
	•	Bandwidth costs
	•	Update frequency (for music and messaging)
	•	Installation Costs

Mixed Platforms In addition to the delivery mechanism, there are several other factors that drive the “total solution price” for a music service: An example:
	A chain of hamburger restaurants wants music in 15 broadband corporate stores inside of casinos, 75 dialup franchise stores in malls, and wants the same program available for listening on their website. Lastly, they want the program to play at their lone Paris, France location, which is freestanding.
	a.	The website will require a streaming player.
	b.	The dialup locations will require a store-and-forward or media-exchange solution. Satellite might be an option; it depends on roof rights and reception in the mall locations.
	c.	The corporate stores could technically use a variety of options, but the casino may not want ANY connectivity or may not give roof rights or have reception for a satellite receiver. So this could be almost any option depending upon the location constraints.
	d.	Paris is freestanding, with no restrictions, but outside of the broadcast range of most North American satellites. Any other option would probably work here.
NOTE: the licensing requirements for each of these options would each be different. The bottom line is, expect to have a variety of delivery mechanisms and plan for each accordingly.

Other Considerations
Licensing
Your choice of delivery method will have licensing implications for both public-performance obligations and music licenses required. It is a good idea to determine your licensing requirements before you initiate a dialogue with a music service.

Licensing is relatively complicated, and a music service can help you navigate the licenses required. In many cases, all applicable licensing can be rolled into the music service’s monthly fee. For reference, here are links to some of the important licensing companies in the U.S.

	BMI	http://www.bmi.com/licensing/
	ASCAP	http://www.ascap.com/licensing/
	SoundExchange	http://www.soundexchange.com/licensing101.html
	SESAC	http://www.sesac.com/licensing/learn_more.aspx
	HFA	http://www.harryfox.com/public/licenseHome.jsp

Multi-Zone
If your location has distinct zones with different music needs, you will need a separate music program for each zone and a distribution technology that supports concurrent playback of several concurrent channels. A hotel may have 10 distinct music zones, for example: the lobby, the spa, the bar, the fitness area, the pool, etc. Even a quick-service restaurant may have multiple zones—e.g. a zone for the dining area (customer), and one for the food preparation area (crew).

Impact to Store Personnel
Ideally, a music solution will not require any effort on the part of the location manager or employees.

To promote brand consistency, it is usually not desirable to allow any selectivity at the playback location. In other words, the manager or employee should not be able to skip a song, change the channel, etc. just because it doesn’t suit their tastes.

Repetition should be minimized in the music programming so that the staff is not listening to a constant loop of the same 100 songs in the same order resulting in staff music burnout.

Professional Sound System
Critical to having an excellent music program is to having the right sound system, properly installed, and tuned to your environment. It is not complicated, or relatively expensive, but it is important to plan ahead and get the wiring done right the first time! There is likely no shortage of low-voltage wiring contractors, professional sound system installers, etc. in any locale. There are some advantages to using a national chain with a local dealer, especially when it comes to pricing for speakers, amplifiers, etc.

Implementation
As you plan your implementation, the following key factors need to be included:

Planning

	Location analysis – what are the restrictions that apply to each location?
	Infrastructure analysis – what back office infrastructure will be required?
	Budget – how much do you have to spend overall? Per location?
	Approvals – who in your organization will develop or approve messaging programs or music?
	Project management – who will own the project, who is on the hook to coordinate the music source, sound contractors, personnel at each location, etc.

Rollout

	Resources – who will actually install/replace the music service or sound systems?
	Mass rollout or staggered – does it make sense to roll out all locations at once or stagger them over time? What will it take to support your existing service and the new one at the same time?

Ongoing Support

	Support / help desk – who does a store manager call if the music isn’t playing properly?
	Backup plan – what is the plan for times when the music service reception is poor or connectivity not available? How is this communicated to the location manager?

Summary
The good news is: there are options that suit every location’s needs. The bad news is: sorting through those will take some time and energy. Do your homework, don’t believe any one vendor’s claims, do competitive analysis, and above all—know what you want.

Many vendors in the space have a distribution technology solution that is a golden hammer. The idea—and their belief—is that it hits the nail on the head every time. The problem with having a golden hammer is—everything starts to look like a nail.

Make sure your vendor is listening to what you want and what you need. Make sure they have solutions for every location, and not just the ones that match their business model and technology.

Lastly, make sure you understand what you are getting in terms of hardware, licensing, support, services, and the like. After the contract is signed is a bad time to realize that you owe ASCAP or BMI additional money every month.

About The Author

Hal Stiles has over 20 years’ experience in IT management, media distribution, and business management. He was most recently with Ascertane, a premier media consulting group, where he was responsible for a series of successful systems initiatives in IPTV and media distribution, including completing the Private Label Radio strategic systems plan. Before joining Ascertane, Hal was a vice president at Warner Bros. working with International Television, Home Video, and Consumer Products divisions and responsible for large systems implementations. Hal also has an extensive retail background, having started his career in POS systems and franchised retail operations with Merle Norman Cosmetics.

He is available for questions / comments at hal@privatelabelradio.com.