2012 Brown University graduate Stephen Hebson and his co-founder and fellow Brown graduate Parker Wells have developed a new startup called Overhead.fm. The company has decided to tackle a market that hasn’t had much disruption in a number of years. That market, is over head music at venues like restaurants, coffee shops and some retail outlets.
While many may think that business owners just hook up a sirius satellite radio, mp3 player or cd player, there can be serious ramifications to that. While they don’t wear uniforms or carry badges, “inspectors” for lack of a better word, from ASCAP and BMI are constantly visiting businesses to see what type of music they are playing overhead. If a business owner isn’t paying for licensing of music being played for the “public” they can find themselves staring down the barrel of a business life threatening lawsuit.
Muzak, one of the world’s leaders in overhead music charges establishments by their capacity and traffic. Restaurants and businesses can pay anywhere between $30 a month to nearly $200 to play music overhead. While it may seem logical to just not play music, music keeps patrons in their businesses longer and spending more money.
According to Mainebiz, Hebson had received some insider knowledge on the ins and outs of overhead music by first working at a coffee shop and then holding an internship at ATO Records in New York. After learning how high the fees were for licensing music he thought there had to be a better way, thus overhead.fm was born.
Hebson and Wells are building up a great library of music that is heavily weighted by more successful local acts in Portland and Providence. The company is offering the bands a great value proposition by allowing them access to analytics for plays, locations, frequency and more in exchange for licensing their music. The band wins by getting access to the proprietary information that overhead.fm collects. Overhead.fm wins by not having to payout actual fees.
Overhead.fm is going to start curating more “paid” for music shortly. They recently won the student track in the 2012 Rhode Island Business Plan Competition. With that honor came a prize package of $40,000 including some seed capital and legal services to the tune of $10,000.
Hebson told Mainebiz that they plan on using some of those legal services to construct a contract for licensing music to the company.
Hebson feels that businesses will enjoy overhead.fm because of it’s eclectic library featuring local artists. Right now in their test phase, the service starts off as a 30 day free trial and then goes to a $25 per month subscription model. Now remember that may be a little heavy for a streaming service on a personal side but it’s quite affordable when it comes to music being used for overhead systems in businesses.
We are treating [Providence and Portland] as test markets. We know these cities have pretty big independent music and retailer cultures and are small enough that we can get a lot of saturation pretty quickly and use that data” to build out the model, says Hebson said to MaineBiz. “We’ve already had a lot of success at businesses that are already playing off the independent or local vibe already,” he says.
Find out more about overhead.fm here
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