Swedish music company Epidemic Sound is launching a new program called Break.Through, which it claims will empower independent musicians in new ways.
It’s a claim certain to raise eyebrows in some parts of the music industry, since Epidemic Sound’s status as a production-music company, and its involvement in the ‘fake artists’ controversy last year, have ruffled feathers among some rightsholders and collecting societies.
However, Break.Through is part of a longer development arc for the Stockholm-headquartered company, which was founded in 2009 as a production-music library.
In recent times, it has broken a number of tracks via streaming services, splitting the revenues with its musicians on a 50/50 basis. It says that more than 200 tracks that it has released in this way have surpassed the 1m streams milestone.
Break.Through is positioned as the next stage in its evolution, moving from breaking tracks to breaking artists.
Epidemic Sound says this came about following requests from the musicians it works with, who wanted to build a following after their tracks connected at scale with streaming audiences.
Break.Through will be based on career-focused workshops, data sharing and network connections to help musicians kickstart or progress their career. The company has been privately testing it with a small number of artists, and is now opening it up to all.
“As the company has grown and progressed, we have seen a pull towards other things. We started out as a B2B company servicing production companies and doing television,” CEO Oscar Hoglund told Music Ally.
“Once that scaled and became a big business in its own right, we shifted gears and started approaching the online video environment – addressing platforms like YouTube, Facebook and Twitch. As we did that, our product became exposed to not just B2B customers but also to the prosumers who are the online creators. That widened our approach from being niche to being something for everyone.”
Production music doesn’t always have a good reputation within the wider music industry: written off by some as functional-but-bland confections used as aural placeholders on TV shows, films, ads, games and YouTube videos when budgets don’t allow sync deals for ‘proper’ music.
For their part, the top production-music firms push back on this, and Hoglund says that there is a proven appetite for some of the music coming out of Epidemic’s roster.
“What has happened with streaming is that people are more diverse in their music consumption than ever,” he suggests – the subtext being that Epidemic, and companies like it, have helped shift consumer behaviour forward and open up new opportunities for new creators.
“We are seeing listening habits that were previously tied to top-tier artists going down. So the long tail is not only getting longer: it is getting thicker. Streaming services are helping discovery by launching new products and encouraging more music to be both heard and produced. Streaming is making music more diverse and we are listening to more kinds of music as opposed to it all being about focusing on playlists.”
He accepts that the top 1% of acts – Ed Sheeran, Drake, Justin Bieber, Chainsmokers, The Weeknd – have done incredibly well from streaming, mopping up much of the money. But where Hoglund sees Epidemic fitting in is in being “able to start to identify and harness the middle ground, which has been incredibly underserved in the past 10 years”.
This diversification of what Epidemic is about – going from working individual tracks to trying to break artists – could be seen as the company pivoting into becoming a label by stealth. If not in name, then certainly in intent. Hoglund argues that it’s not that reductive.
“On the one hand there is the experience and the knowledge needed to be accomplished within this – and that is something we are learning as we grow and building our team. We have been running since 2009, so we have been doing this for a long time. We have had music people at the centre of our business for almost a decade. So it is not new from that perspective,” he says.
“But it is definitely an area where we are constantly looking to increase our knowledge in. It is also wise to acknowledge that the market has changed. The skill sets that were invaluable a couple of years ago [like knowing people at radio] is maybe less important than having the right APIs.”
For him, a careful playlisting strategy has been the motor that Epidemic has run on in recent years. He believes that third-party companies can still create a space for themselves on Spotify despite the streaming service’s prioritisation of its own playlist brands over and above those of external brands.
The trick, he feels, is to net users outside of the Spotify ecosystem and push them towards your own playlist brands.
“My take is this: once a listener is already on a music streaming platform, it is very much up to the platform in question to determine what they are going to listen to. I think they’re going to push more and more of their own playlists,” he says.
“Most of them are going to optimise for the actual user experience – but it is going to be their decision and their call. The way we started to think about that a couple of years ago was around how we could find the listener before they got to the streaming platforms and how we can make sure we sent them to the destination, the playlist, the tracks or the albums that we feel are the place they should be. The answer is online video.”
Expanding on this, he says, “We are now in the process of taking viewers and sending them to our playlists and tracks before they come to the music streaming platforms.”
As Epidemic sits outside of the ‘traditional’ label and PRO structure of the music business, Hoglund believes this gives it an advantage over legacy labels.
“A traditional label doesn’t have that [same data as we have] as they are not soundtracking YouTube and they are not soundtracking Facebook – they are all fighting about the splits not making sense,” he argues.
“We dropped that discussion a long time ago and we focused on the strategic and important thing here which is to make sure that our music gets played for the right viewer so we can turn that viewer into a listener.”
“There is a value gap discussion to be had [and discussions] about different pay-out levels […] but five years ago we made an active decision to acknowledge them but also choose not to focus on them,” he continues.
“We chose instead to focus on how we can use this incredible opportunity in front of us to our advantage. How can we use this tremendous muscle of distribution to help build our artists and turn that into something that is truly unique and that works in their best interest?”
But back to that ‘fake artists’ controversy from the summer of 2017. It revolved around analysis showing that unheard-of artists – who turned out to be musicians working for Epidemic Sound – were bagging lots of slots on some of Spotify’s prominent mood playlists.
The charge was that there must be some kind of deal between Spotify and Epidemic Sound, which was diverting royalties away from ‘real’ musicians – something denied explicitly by Hoglund when Music Ally last interviewed him in November 2017.
Now, he suggests that this was actually the first step in Epidemic’s move to help unknown studio musicians – the bread and butter of library music – into fully-fledged artists.
“To some extent it has been good. What happened a year and a half ago was that we started to experiment with some of our tracks as we had been very active in a B2B environment with musicians,” he says.
“We had a massive footprint in the online video world, but we hadn’t moved out to the pure music world. So we decided to start to test that and to move from being musicians to launching artists. The results were incredible. The music and the tracks were really popular and did really well.”
“What really made people confused and why that term [‘fake artists’] was coined was because they couldn’t find the artists online – because at that point they were musicians and they hadn’t been interested in building their online repertoire and story. They had been very much heads down and making music with us for almost a decade,” he continues.
“What we have done in the last year is sit down with other artists and tell them what is happening and [explaining] that there is this great new opportunity. It is up to them to determine if they want that kind of exposure and distribution and if they want to get access to our insights and tools. It also covers if they want to start touring and making that part of their day-to-day lives.”
Hence the Break.Through program, which could see some of those previously studio-focused musicians building followings and even heading out on tour. Which sparks another question: will Epidemic be going down the 360-contract route and sharing in their live income?
“In everything that we have ever done the key word for us has always been ‘incremental’ – it has not been ‘exclusive’,” says Hoglund. “We started off doing one thing and, as we showed that we could master an adjacent discipline and we could add value, we added that part to our business. We have never been inclined to ask for exclusives or want to own everything. You will see us experiment for the rest of our lives as we are trying new things all the time.”
Does that mean Epidemic will or won’t take a cut of its musicians’ live income, if they venture down that route? “If we can add value to the live revenue scene that could definitely be something we look at,” he says. Hoglund stops short of saying Epidemic would go as far as offering acts tour support, but is not ruling it out either.
This scaling up of Epidemic and its diversification into different parts of the music business all begs the question: if it is offering expertise that labels do not, is the end goal to be acquired by a major or large indie? Hoglund is adamant that is not the exit strategy for Epidemic.
“If you look at our last six months I think the answer is quite plain. In late 2017, we took on new financing and we sold part of our business [40% to Swedish private equity firm EQT]. The reason we did that is because we are long-term and we made a commitment that we really want to help transform the music industry,” he says.
“We want to do it from our own platform with our own values at heart. We have our own specific goals. We are going to stay the course. We have no interest in selling. We have already made that very clear. We are in this for the long run.”