May 22, 2017:Epidemic Sound talks YouTube: ‘We’re a music company that really understands the platform’

In recent years, most of the discussion around YouTube and music has focused on rightsholders’ desire for greater royalties and less safe-harbour protection for Google’s video service.

YouTube’s potential as a sync platform, with hundreds of thousands of creators from vloggers to gamers in need of soundtracks for their videos, has got less publicity save for when it intersects with that copyright debate.

That state of affairs is changing though. Music rightsholders have a better understanding of the sheer scale of the online-video world – many more music execs know who PewDiePie is now than even a year ago, and not just because of his current controversy.

Many also know the backstory to Norwegian artist Alan Walker’s track ‘Faded’, which started life on YouTube channel No Copyright Sounds, under its model of making music available royalty-free for other YouTubers to use in their videos. That model was the launchpad for a global hit.

The knowledge that a YouTube video can raise a song to prominence just like a traditional TV, film or game sync is leading more labels to wonder how they can get their tracks into those videos. Yet as they enter this world, they’re meeting established competitors.

No Copyright Sounds is one of them, while others are production-music libraries. We recently interviewed Audio Network about its efforts to win YouTubers as customers, but perhaps the most well-known name in the space is Swedish firm Epidemic Sound.

It was founded in 2009 by a group of TV producers and musicians, who had been making online video content and trying to clear music rights for it.

“It was tough for those early online producers when it came to finding music. They would ask the traditional players for music, and be asked what country it was going to ‘air’ in. Well, the internet country!” Epidemic Sound’s Edward Höglund tells Music Ally.

The founders decided to start a company that would commission original music, and pay the composers upfront for full rights to it, so that it could be licensed out to creators.

“It was about offering music composers a different way of making a living. The old royalties way works for some, but for others it’s tough,” says Höglund. “And for anyone doing video, we set out to be the best music service: there is only one stakeholder between the composer and the finished product.”

Eddie Epidemic Sound

In April 2017, the company announced a new strategic investment from Kichi Invest that values its business at $45m – up from $20m in 2014. Epidemic Sound also said that it’s growing 90% year-on-year, with its annual revenues passing the $6m mark in 2016.

Epidemic Sound now adds around 200 tracks a month to its library, putting quarterly briefs out to its roster of composers to tell them what it needs.

“The ones we work with that month get the brief, send in their rough drafts, and get feedback from our music department – who are composers themselves, so it’s very specific feedback,” says Höglund.

“Some composers think it’s fascinating to work that way, getting proper feedback all the time. Others want to work more freely. But what we’ve shown is that production music doesn’t necessarily have to sound dull or be dull. Some of our tracks are just as up-to-par as many other tracks that go big today.”

Epidemic Sound’s basic model is licences that start at £0.79 per second of music used, although YouTube channel owners can sign up for a subscription starting at £10 a month for unlimited access to its catalogue – the company has several hundred thousand YouTubers signed up to that, many through its deals with MCNs like Maker Studios and BroadbandTV.

Epidemic Sound started working with MCNs about five years ago: Höglund actually joined the company from Swedish MCN United Screens – who Music Ally interviewed in May 2016 – so knows the market.

We’re a music company that really understands the platform and how it’s used. We still have never dealt out a copyright strike, and when you think that we have so many music pieces being synced to video every day, it’s quite unique,” he says.

Epidemic Sound has a good relationship with YouTube too: Music Ally first encountered the company during YouTube’s NextUp bootcamp in 2016, when Höglund was invited in to talk to the group of emerging YouTubers about music licensing.

“We’re trying our best to educate. It’s super-tricky for a very experienced editor at ITN who’s been commissioning TV for years! So no wonder a 14-year old gamer has trouble understanding what music they can use on which platforms,” says Höglund.

“We try our best to help. We are invited by YouTube from time to time to educate the community, and we do our best to do it ourselves. It’s a tricky subject: it’s an inspiring and emotional and cool, fun industry, but there’s a lot of stuff going on. We want to try to explain it to people.”

He adds that YouTube has been a supportive partner. “It’s important for them to have players like us to supply great production music for the creators,” he says.

“We haven’t seen great progress from their own audio library, although they want it to be there. Maybe we’ll see a bit more in the future, but it’s such a huge platform, their library wouldn’t be enough anyway.”

Epidemic Sound appears well positioned to capitalise on an explosion in online video beyond YouTube, with Facebook looming large in particular – and not just for YouTuber-style creators.

Every marketing department in every company makes video for the internet, for social networks… and everyone needs music and a reliable music source where you know you won’t get into trouble for using the music,” says Höglund.

He thinks Facebook is “right to double down on video”, and also praises Amazon-owned Twitch, which he thinks is still underestimated outside its core population of live-streaming gamers.

“There were a lot of articles and journalists flocking around Twitch when they got acquired, but not much since. It’s still a huge platform, and thriving,” he says.

A lot of people producing content can learn a lot from Twitch. They have such a user and streamer-centric way of doing it, with features that the other traditional guys haven’t really implemented yet.”

But back to Facebook. Höglund is also fascinated by the oncoming battle between Facebook and YouTube around video, including how Facebook will roll out its equivalent to YouTube’s Content ID for copyright tracking and monetisation.

“It’s about how they’ll be able to be a sound and great partner for everyone doing music, be it us or traditional music companies,” he says. “It will be fascinating how they tackle that, and they will need to tackle it somehow.”

When Music Ally interviewed Audio Network recently, the company talked about how it’s starting to put out some of its music on streaming services like Spotify. It’s a new frontier for a production-music library, and one that Epidemic Sound has also dabbled in.

“We’ve done it once, with one track, and it got quite good streams on Spotify. But that was more of an experiment,” says Höglund, who notes that sharing a home city – Stockholm – with Spotify has its advantages.

“Having Spotify in the same city, and also being able to talk to the Swedish SoundCloud guys, it’s a fascinating city to be in,” he says. “But our focus is really still on providing the best music service for anyone doing video, from movies or TV to online.”

That said, Epidemic Sound has been exploring its own direct-to-consumer presence on another streaming service: YouTube.

Last summer we just started building our own YouTube channel, as a way of finding our music mainly. Putting some of our tracks on our YouTube channel was one way,” says Höglund. One of those videos, ‘Faster Car’ by Loving Caliber feat. Anders Lystell and Michael Stenmark, has generated 2.7m views since being uploaded in June 2016.

It’s fair to say Epidemic Sound has been seen as controversial by some people within the music industry. Some labels include it in their wider grumbles about ‘soundalike’ royalty-free music, while others specifically worry that its pricing model will drive down the value of their music if they ever make a serious move into its market.

Höglund thinks these kinds of arguments have died down. “Nowadays, people understand why a service like us is needed, and what we can do with composers that don’t find a place in the music industry as it looks today,” he says.

I’d say that the cross people you have found are getting more and more rare. It was a new idea, we’d done something no one else had done, and when you do that people are often not really sure what’s happening.”

Höglund recently took part in a roundtable discussion at the Slush Music conference in Helsinki, and was pleased to see representatives from a major label attending to find out more.

“We’re all in this cool music industry, I think we should definitely learn more from each other,” he says.

Stuart Dredge
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