The Challenge of Licensing the Long Tail

For a collective management organization, the large users of the repertoire are relatively easy to identify. TV channels, radio stations, cable operators, hotel chains. They are few, visible, and usually have legal departments that understand what a license is.

The problem is at the other end. Thousands of bars, hair salons, gyms, clinics, small shops, and lodgings that play music or keep a television on all day. Each one represents a small amount. Together they represent a huge share of the actual use of the repertoire and, in many territories, a minimal share of what is actually collected.

That is the long tail of licensing. And it is probably the hardest operational challenge for any CMO to solve.

Why self-licensing alone is not enough

Digitization solved an important part of the problem. Today an establishment can calculate its rate, get its license, and pay for it in minutes, with no visits or paperwork. That removes the friction for anyone who has already decided to get licensed.

But friction was never the only barrier. Most small establishments do not know they need a license. Others know and do not see it as a priority. Others see the payment as one more tax, with nothing clear in return.

A well-designed self-licensing portal turns intent into payment very efficiently. What it cannot do is generate that intent. Among small licensees, spontaneous intent is scarce, and voluntary conversion rates across the whole universe of establishments tend to be very low, even where the digital experience is excellent.

The unit economics of the small licensee

The annual license for a bar with a couple of televisions can be a very small amount. When you subtract from that income the cost of identifying the venue, contacting it, convincing it, collecting from it, and renewing it year after year, the margin can turn negative.

This leads to a reasonable temptation. Concentrate resources on large accounts. A handful of hotels or cable operators can equal, in revenue, thousands of small businesses, with a fraction of the effort.

The argument is commercially sound, but it leaves two problems open. The first is fairness. The rightsholders whose works play in those thousands of venues receive nothing for that use. The second is legitimacy. A CMO that only collects from the big players weakens the principle that every public use of the repertoire requires authorization, and over time that also affects its position with the large accounts.

So the goal should be to lower the cost of serving each small licensee until the equation works.

Paths being explored

No single strategy solves the problem. But several lines, combined, change the equation.

• Active detection and automated outreach. Identify establishments from public sources, such as maps, business registries, or reviews, and contact them with automated agents that answer questions and guide them to the license. The cost per contact approaches zero.
• Integration with regulatory procedures. If the license is part of a process the business already has to complete, such as a municipal permit, the decision to get licensed stops being a separate step.
• Bundling with purchases the business already makes. Television or music services for businesses, point-of-sale systems, or equipment suppliers can include the license in their offer.
• Institutional networks. Chambers of commerce, restaurant associations, and franchises make it possible to reach hundreds of venues with a single agreement and a collective rate.
• Regularization campaigns. For a limited time, unlicensed establishments can catch up with benefits, for example without paying past-due periods or with discounts. Once that window closes, the CMO moves forward with formal notices, claims, and inspections. Knowing that consequences follow is what motivates many to regularize on time.

Redefining what success means

If digital licensing is measured only by direct revenue, in the small-establishment segment it will almost always look insufficient. There is another way to read it. Every mass campaign works as a census. The establishments that respond, inquire, or get licensed reveal where the real opportunities are.

That information has value of its own. It shows which segments convert, in which areas, and with which messages. It also helps decide where to concentrate in-person enforcement, which is expensive and has to be used with precision.

Also, the long tail is not homogeneous. Small hotels, lodgings, gyms, or health centers tend to have higher rates and require less pre-qualification work than a bar with a single television. Segmenting well is often the difference between an operation that loses money and one that scales.

A long tail that can be served

This challenge will not be solved with a single tool or a single campaign. It requires steadily lowering the cost of serving each small user and using the data from every contact to decide where to invest the next effort.

The CMOs that manage this will collect more. They will also distribute more fairly and more strongly uphold the principle that justifies their existence. At global.esur we have worked for more than fifteen years with collective management organizations around the world, and this is one of the problems we are putting the most energy into.