- Startup: Lick’d | lickd.co
- Category: Sync/Licensing
- Headquarters: London
- Management Team: Paul Sampson – CEO, Simon Davis – Director
- Funding so far: £9.4m
- Lickd is currently seeking to develop relationships with: creator economy companies and venture capital
- Contact details: lickd@fiveinaboat.co
What does Lickd do?
Lickd aims to make it easier for YouTubers and other online creators to license commercial music for use in their videos. The kernel of the idea that grew into Lickd arrived a few years ago when a YouTuber contacted Paul Sampson and, much to his confusion, asked if they could license some music. It turned out a colleague had previously struck a quick, cheap license deal to, “get the YouTuber off her back! And I thought, ‘Wow, how would you get the rights as a YouTuber?’” He started looking into how music could be licensed by YouTubers and spotted an opportunity.
Sampson – now Lickd’s founder and CEO – realised that an unintended consequence of YouTube’s Content ID system was that it stopped YouTubers from working with famous music. “The commercial sector had precluded itself from being part of that by way of insisting on Content ID. Stock music companies had filled that hole.”
But creators on YouTube want to use whatever music they like, not sound-alikes or from a limited catalogue of cleared music. Lickd’s solution is to pre-clear as much desirable commercial music as possible, and then let creators license it affordably – returning lots of small license fees to rights holders.
Lickd’s goal, says Sampson, is to “build Spotify for creators, or a mecca for micro-licensing.”
The simplicity of stock music with the appeal of commercial music
Sampson started his career at a stock music company in New York before moving into sync. But he remembered the simplicity of stock music’s licensing system: “I saw the power of a one-stop shop for all rights… and the power of very commercial-sounding stock music, and what that did for me in terms of winning market share.”
Sampson returned to the UK and used his connections from working in stock music to open up this new opportunity. But he encountered the restrictions that accompany the Content ID approach: “Content ID presumes, at all times, an infringement. And it can presume that, because there’s no way to get the rights. Around the same time, an IFPI report came out saying that Sync revenue had grown to 2% of global recorded music revenue. I was like, ‘2%? Is that it?’”
Back then, one million channels were part of YouTube’s partner programme, where they can start earning money. Sampson thought: “if those one million channels make five videos a month, 12 months a year – then there were 60 million licensing opportunities every year.”
Sampson figured he could pitch the commercial music sector with the possibility of 60 million briefs that brought in small sync fees individually, but a big fee en masse. So he and a colleague developed software to enable this, and demoed it to all the major labels and big indies, “to show them the revenue they were missing out on.” It was so compelling, he says, it was, “almost negligent to ignore it.”
However, adopting innovation quickly is not necessarily something the music industry has historically fallen over itself to do – or as Sampson puts it, “the music industry’s only ever been slightly ahead of the Amish” when embracing new technology. But this joke is only partly true, Sampson says: “there are real innovators at the labels who understand our frustrations at how slow it is to work with these big moving companies, and that understand the change and want to be part of it. It’s just the nature of the beast: they’re oil tankers.”
And this change is now happening: today, Lickd has 8,000 labels and publishers signed up on a pre-cleared basis, with over 600,000 commercial songs available. That number, he says, will pass 1 million by the end of 2021 “and a further five million scheduled to be delivered in the next 12 months.”
Since then, five million channels are part of YouTube’s partner programme, “and is set to become eight million within two years”, Sampson says.
How does Lickd work – and how does it stop endless Content ID takedowns?
Sampson says that Lickd creates new money streams by unlocking many small license fees at scale. But to do that in a way that’s profitable, labels have to pre-clear music so that the job can be automated. He puts it like this: “let’s generate tens of millions of pounds for artists over here, whilst also providing you a route to market for new music, and the most marketable and engaged audience you can.”
Lickd built proprietary software called Vouch which stops Content ID from asserting a copyright claim on music from catalogues that integrates Lickd’s system. “That means every time Content ID finds that song, it inadvertently notifies our software. And as it proceeds to attempt to assert a copyright claim, the software interjects and says, ‘Hang on a minute, this song is legally available – give me the name of the channel you found it on and the name of the song, and I’ll tell you if it’s a Lickd user that paid for the legal rights. And if they have, you don’t get to claim this video. And if it’s not one of ours, go ahead and claim it.’”
Vouch allows rightsholders to preclude malicious content, branded content or brand-sponsored content from the license available on Lickd. “That’s up to the label at rightsholder level… we just review the copyright claims. The label, or the Content ID administrator, still maintains full control of their CMS, and at any point in time, can remove a single track, or block or monetize or take down a video that it finds to be a misuse.”
Lickd charges a sliding pricing scale – the kind of fee structure that fits the necessarily-automated, pre-cleared approach. The cost to license a song is based on the average views a Lickd user’s 50 most recent YouTube uploads have received – which is calculated when a user connects their YouTuibe account to Lickd.
For instance: a user with an average of 50 thousand views per video could expect to pay a one-off price of $8 per song, which covers the lifetime of the video. A user with a 1m view average would pay $230 per song. If the videos are branded content, then the price is higher: $80 for a 50 thousand view average, and $1013 for 1m.
Who is using Lickd already, and what does the future hold in terms of platforms?
It’s not just labels and publishers using Lickd – there are over 25 distributors signed up, delivering content at scale. “Distributors for the independent sector, largely, control so much of the YouTube CMS… for us to offer the song claims free, whoever controls the CMS has to have integrated our software. So, distributors are a route to market for us.”
More platforms will soon integrate Vouch into their back-end to enable licensing for more independent producers and artists. But the big opportunity, Sampson says, is at scale. “It’s not for a limited catalogue. And the business model is totally different… the industry isn’t ready to accept this business model yet.”
This step of confidence in Lickd’s system may be getting closer. Lickd recently raised £5.1m of funding from investors including Warner Music Group, the investment firm of Pink Floyd’s Nick Mason, and Fortnite publisher Epic Games. Gaming is a big use-case that Sampson hadn’t really planned for. “We partnered with Fortnite, because during the pandemic, the Metaverse became a live music venue. Suddenly everyone is sharing content that’s music-centric.” Lickd is aiming to help the gaming world navigate the copyright claims that come with that sharing.
The emergence of TikTok – a viral, addictive, music-based video platform – has come at the right time too, and, Sampson says, validates his basic premise that the biggest opportunity in Sync is in user-generated content. He mentions the story of an artist friend who had an 18-month-old song which blew up on TikTok: “over 100 million plays – the most uploaded song to TikTok for three consecutive weeks in the U.S… it was insane. And now he’s signed a major deal as a result of this.”
But it also quickly became one of the most licensed songs on Lickd as well, which, Sampson says, drove more views to the video, and thus more revenue. “Being able to move quickly and take advantage of trends on multiple platforms rather than just one, and seeing what other ways can we engender the market share of the songs and generate revenues for them – it’s a no-brainer. I think the biggest threat to our growth will be the speed of adoption.”
What about that other highly-influential – and complex, in terms of music licensing – platform, Twitch? Sampson offers some approval for Twitch’s work on their Soundtrack feature, which allows streamers to use a catalogue of cleared music for use in their livestreams.
Much of that music, he says, is also available on Lickd, but he thinks there are tweaks to be made in terms of the musical options available to users: “I’m not saying it’s not quality music, but [the variety of music] is not what you might hope it to be if you were a Twitch streamer.”
Sampson feels like there is also a little way to go before an agreement is reached between Twitch and the industry at large in terms of how a stream of music on Twitch should be considered in terms of the license it requires.
In general, his view of the future is one of growth and market-building. He compares Lickd today to Spotify in 2009: still proving the market, increasing revenue month by month, and nudging the big rightsholders to give them access to the full catalogue. “Every day we send them another dollar, more music appears on the platform… they are aware of what stock and royalty-free stock music did to their market share in traditional media – and that they’re already one step behind in social – and that they need to plug that hole as quickly as possible.”
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