With a catalog of over 35,000 tracks in their audio library, Epidemic Sound has become one of the more prominent successes stories in the Swedish music scene. They’ve seen significant growth in the last decade and currently sit at a valuation of over $1 billion. I recently had a chance to stop by their offices to chat with their Chief Of Music, Niklas Brantberg, and was able to ask him questions about the company’s progress and history, as well as how they work with artists to build up their library.
– Hi Niklas. Thanks for having me over to chat. Prior to Epidemic Sound, you used to work at Norfoods and Boston Consulting Group. How did you go from food and consulting companies to being in the music business?
“Norfoods” was my father’s old company, so I haven’t heard that name in a while (laughs). I worked there whilst studying business at the Stockholm School of Economics. Once my studies ended, I moved on to Boston Consulting Group, which is a management consultancy firm. I spent some years there but always had a passion for music; I’d played in a bunch of bands during university and felt it would be cool to move more toward that world. The CEO of Epidemic Sound, Oscar Höglund, also has a background with Boston Consulting Group and he founded Epidemic in 2009, along with a YouTube multi-channel network called United Screens. I connected with him in 2013 and got the chance to start working here the following year.
– Can you talk about the roles you’ve had thus far at Epidemic Sound and what your position at the company is today?
Sure. My first role was in International Sales, with a focus on selling our music in other countries. I later became VP of Global Sales and eventually SVP of Global Sales and Streaming Partnerships, where I was responsible for our deals with streaming platforms. I became Chief of Music in 2019 and was put in charge of the music team, who’s job is to analyzing user needs, determining what gaps to fill in our catalog and scouting for new composers.
– What does the typical day-to-day routine look like for you as Chief of Music, and who do you answer to?
I answer to the COO. My team consists of about 50 people and my day-to-day involves a lot of management work to make sure they know what they’re doing and have the support to overcome challenges. I also have to figure out the long-term strategy of how the music team can support the company’s overall goals.
– If I’m not mistaken, Epidemic Sound started off by providing production music for broadcast companies, correct?
That’s right. The company was founded in 2009 by two groups of people. One group was two music producers that saw a difficulty for musicians to make a living; either you landed a big hit and did well, or you had to supplement your income by having side jobs. So they wanted to find a more stable revenue stream. The other two founders were in the TV business, specifically at a company called Zodiak Media, and they noticed how difficult it was to license music for their video content. It was tricky to know what the costs would be, plus there could be multiple rights-holders to get full clearance from, etc. So they wanted to facilitate the licensing process and came up with the model used at Epidemic Sound.
As you mentioned, the initial focus was on broadcasting clients since TV was a big medium back then, but those companies would experience issues when moving their content online. Their programs suddenly went from a local medium to a global one, and things like the duration of their music license would become an issue. So Epidemic Sound quickly moved into the online space to provide a solution. This was also when YouTube multi-channel networks were popping up around 2012, so we made deals with them and that served as an important client base also. We now work with a wide range of users, from big international broadcasters to bedroom video producers.
– I’ve read that Epidemic Sound is the largest owner of non-collection society affiliated music. Can you explain what that entails?
Sure. If you’re a member of a collection society like STIM, SAMI, PRS, BMI or ASCAP, you typically have an exclusivity agreement that states you can’t sell your rights to another organization. Due to that, Epidemic Sound can’t work with creators who are part of those societies. So we’re the biggest in that space, having built our catalog for over 10 years and getting close to 40,000 tracks that we’re the only stakeholder for.
– I once heard an interview that your CEO, Oscar Höglund, did in 2014, where he said Epidemic Sound’s catalog was at 25,000 – 30,000 tracks. You just said it’s getting close to 40,000. So you’ve added less music in recent years than you did at the start. Is there a reason for that?
In the beginning there was a focus on quantity in order to reach a critical volume. After achieving that, we became more picky about the quality of our music in order to procure what our users really need. Our early days were more about finding music that was popular, like EDM, pop, hip-hop and orchestral film music. We still buy in those genres but the focus is now on covering the different niches like K-pop and Latin music. For example, in Sweden we’ve worked with a lot with immigrants from Africa and the Middle East that make music indigenous to those regions, and we hope to do more of that as we add hundreds of new tracks each month.
– In 2014, Oscar also said that Epidemic Sound was serving about 20% of all YouTube multi-channel networks in the world, such as Maker Studios at the time. Do you know what that number is now?
It’s probably high, though I don’t know the exact number. But keep in mind that the multi-channel network space has changed since 2014. They were quite powerful back then and were focused on signing an increased number of creators. Nowadays they’re more focused on specific parts of the online content industry. So it’s less about signing as many creators as possible and more about working with a lower volume of creators through in-depth partnerships. We’ve made a similar adjustment and prefer to work directly with creators rather than the networks who sign them.
– Another one of your customers is the in-store radio stations. How has that relationship developed over the years?
Although our catalog is suited for a variety of clients, our main focus is working with storytellers that are video creators, so we don’t have a full offering for things like in-store radio stations because it has to be combined with speaker solutions or other hardware/software solutions. So we’ve only remained a regular supplier there.
– Epidemic Sound also started working with Fortune 500 companies in the mid-2010s. What has that entailed?
We mainly supply music for their media since larger companies are now producing greater amounts of content for marketing and social media. They’re also developing an increased amount of in-house content for things like internal communications, so we have more and more needs to fill in that sector.
– I’m assuming all your clients don’t pay the same rate. Can you tell me about Epidemic’s subscription model?
Currently we have two offerings: one is the personal subscription which caters to single online accounts on YouTube, Facebook or Instagram, for which you pay $15 a month. The commercial plan is $50 a month and is for companies that want to use our music across all their channels.
When servicing a bigger company that needs multiple accounts for different team members or wants to do additional licensing for things like feature films, we offer custom plans. Our plans also depend on how much support a client needs, as it’s common for bigger companies to need more service, which would be baked into the final price.
– Within the Swedish music tech space, Spotify remains the most prominent player. Have you attempted any partnerships with them to grow your business?
All the music we purchase is released on streaming platforms, so we work with Spotify like any other record label would by uploading to their platform and pitching to get onto playlists.
– Can you talk about how Epidemic Sound sources artists?
Sure. We get a lot of submissions, in the several hundreds per week, so we review all of them and pick out the artists we think are talented. Because we get submissions of all types of quality, we need to make sure it’s above a certain threshold by having our music scouts listen first, after which an A&R that specializes in the genre will give it a listen. They’ll score the music based on its technical characteristics, distinctiveness and how well it fits our user needs.
Our A&Rs try to work their connections to find new artists, as well as searching for them online. We also have a network of scouts who aren’t formally employed but recommend us new material, and we’re also talking at different music schools in Sweden about what we do, which serves as an inlet for new talent.
– How does the process of commissioning music from your artists look like?
The composers get a brief on what we’re looking for and produce a demo for their assigned A&R who follows up with feedback. The music then goes through some rounds of improvement before it’s considered finished.
– Do all of your artists get assigned an A&R?
If they’re actively working, then yes. Every A&R has multiple assigned artists and we have a few hundred artists on our roster, located in both the US and Sweden.
– You seem to only operate in the US and Sweden. Why is that?
We have sales and marketing teams in a few other places like Korea, Holland and Germany, but music-wise we’re solely in the US and Sweden, although we’re looking into other markets. The reason is partly because we want to have close contact with our artists, so it’s natural to focus on the territories that have our biggest offices. Moving into a new country also implies we’ll be purchasing music rights, so we need to make sure the legal process functions similar to how our model works in Sweden and the US.
– Speaking of your model, can you explain how it works when you purchase music from your artists?
We pay our artists an upfront fee for the financial rights to their music, which means the creator receives a stable income regardless whether the music gets licensed or not. Since we’re the sole stakeholder, it also makes it easier for us to create the right type of license for our different users.
We also do a 50-50 split of our streaming revenues with the artist after platforms like Spotify have taken their share. For platforms where we don’t have direct deals, we may have to go through distributors that charge a fee or require a different split, but we always do it 50-50 where possible.
Additionally, we have a Soundtrack Bonus that’s paid out quarterly based on how popular certain music is in our website audio player. Even though it’s possible to get one-off licenses, we’re mainly a subscription-based model, so the player is the best way to determine how popular a track is. Last year’s bonus pool was capped at $1 million, but this year’s pot will be much larger and will increase as we move forward.
Finally, we also offer the option for musicians to invest their earnings in Epidemic Sound if they’d like to do that.
– My understanding is that you don’t do any splits on the licensing income when your clients use your music. Is that right?
That’s right. Any audiovisual use is covered by the upfront payment and Soundtrack Bonus.
– I read that you pay $1000 – $5000 per track. What determines the final number?
A couple of factors, but one of them is the type of track – if it’s an instrumental, the payout will be less. Vocals command a higher number because more people need to be involved for the production and recording process. Another factor is experience – people who are earlier into their career typically need more review hours and coaching versus someone who’s self-sufficient, so the latter commands a higher number.
– I’ve also read that the average artist income at Epidemic Sound is $35,000 a year? How much music does one have to submit to reach that number?
I think the last number we communicated was $40,000, but I don’t have the current figure because it’s on the increase. But that only pertains to artists that are actively making music with us.
The number of tracks is tricky to work out because some people do all their music themselves, and others have multiple people involved. But a couple of tracks per month is typical.
– And your highest earners make around $200,000 a year? How do they get to that?
If you’re in that range you probably make a lot of tracks, but they still need to pass a high quality bar, so it’s not an insane amount. Getting to those numbers is a combination of the quantity of submissions and streaming performance. A track could do really well on streaming and in our audio player, which means it’s a favorite among users and earns you a greater Soundtrack Bonus.
– Do you only sign one track at a time or do you offer album deals too?
Typically we do one track at a time and we pay once the track is finished and accepted. Sometimes we plan for an EP or album, though we don’t commonly pay for the whole project upfront.
– Does Epidemic Sound do exclusive artist agreements or can your artists sell their music elsewhere?
Since we own the rights, the music we acquire isn’t usable elsewhere. Having said that, the artist agreements aren’t exclusive, so they can still make music for other labels.
– Can Epidemic’s artists leave whenever they want?
We usually do three-month terms to keep things non-exclusive, and they can leave anytime after that, yes.
– Does the music you purchase belong to Epidemic forever?
Yes, it’s ours in perpetuity. But we pay out royalties and Soundtrack Bonuses in perpetuity also, even after an artist has left Epidemic Sound’s roster.
– What are some of your bigger success stories with artists?
It depends on how you define “success”. Some composers have done really well among our video clients and others have done better at streaming. Others have seen video popularity feed into their streaming numbers, and some artists have used their time with us as a springboard into other career moves within the music industry.
– Has any artist made $1 million working with you?
I think so. I don’t have those details off the top of my head but I wouldn’t be surprised.
– What are Epidemic Sound’s thoughts on accommodating music trends versus taking a stand on the kind of music to release? Is there any conversation at the company about what kind of music to avoid versus what should be emphasized?
It’s an interesting question. I don’t believe in sitting on a high horse and saying what good music is. We believe in listening to our users, so if there’s people who want to license certain types of music, then we should cater to them. Epidemic Sound can’t be overly niche if we want to soundtrack the world, so we need all styles of music. I remember when we got feedback a few years ago about users wanting more music that sounded “corporate” – maybe they had in mind something typical to American pharma ads or company presentations. So we had to pursue that genre as well, though it didn’t have to sound stereotypical. They just needed music for a certain use case and we experimented with that to present something that worked. But the topic of what constitutes “good” or “bad” music has always been an ongoing conversation for music professionals.
– Thanks for talking to me Niklas. This was a great conversation. What do the horizons for Epidemic Sound look like now?
There’s a lot of focus on growth, as well as on geographical expansion – we want to make our catalog more accessible to more markets. Whether we do that by marketing in different local languages or by making music in local genres remains to be seen. We also want to find new ways of expanding our network when it comes to music and video creators.
(Below: Niklas Brantberg)