MBW’s World Leaders is an everyday sequence during which we highlight among the most influential trade figures overseeing key worldwide markets. On this characteristic, we converse to Oscar Höglund, CEO of Epidemic Sound. World Leaders is supported by SoundExchange.
Epidemic Sound reaches audiences at a scale that many conventional music firms may solely dream of.
In response to its just-released Annual Report, the Stockholm-headquartered music manufacturing firm achieved a 29% YoY leap in revenues to SEK 1.921 billion ($181.62 million) in 2024, whereas its adjusted EBITDA soared 150% to SEK 147 million ($13.9 million).
However some of the eye-catching figures is Epidemic’s estimated on-line attain. Movies that includes Epidemic’s music now generate 3 billion views every day throughout YouTube and TikTok alone – up 500 million from the earlier yr.
“We’re at a scale now the place we get roughly 3 billion every day views on content material the place our music is soundtracking – that’s the equal of roughly 20 Tremendous Bowls per day,” Epidemic CEO, Oscar Höglund, tells MBW.
“We get 3 billion items of sign each single day telling us what the web feels like.”
As Höglund tells us in our wide-ranging and unique interview beneath, his firm’s enterprise mannequin – which has courted controversy up to now over (a) its affiliation almost a decade in the past with the notion of ‘faux artists’ on streaming companies and (b) its buyout agreements – has developed right into a four-pillar remuneration system for artists.
That system contains: fastened payment funds to acts starting from $1,775 to $8,000 per monitor; a share in Epidemic’s annual “Soundtrack Bonus” pool, value $3.5 million in 2025; a 50/50 royalty break up from streaming payouts; and fairness alternatives for long-term contributors.
“The typical artist immediately makes between $60,000-$80,000 per yr with Epidemic, with outliers making north of $200,000 per yr,” Höglund reveals.
Following its acquisition of Norway-headquartered sound results firm Soundly, Epidemic’s catalog now encompasses 250,000 items of content material (together with over 50,000 tracks, plus 200,000 sound results).
However, as with all so-called ‘manufacturing music’ firms, Epidemic wants to think twice about how AI will affect, and enhance, its enterprise mannequin.
“We expect AI is unbelievable, however as a instrument to serve human creativity, by no means to exchange it,” explains Höglund.
Past the corporate’s spectacular monetary and utilization metrics, Epidemic has just lately secured high-profile partnerships with musicians together with Johnny Marr, Richie Hawtin, and Jordin Sparks.
Right here, Höglund discusses Epidemic Sound’s 2024 monetary outcomes, the corporate’s AI technique, IPO rumors, and his ambitions for the long run…
What would you say are the first drivers behind Epidemic Sound’s efficiency, with 29% internet gross sales progress and 150% adjusted EBITDA progress final yr?
For the longest time, essentially the most coveted job for youths rising up within the US was to be an astronaut. That’s held true for many years, after which a number of years in the past it shifted. The primary coveted line of labor now could be to be a creator.
“For the longest time, essentially the most coveted job for youths rising up within the US was to be an astronaut. Now it’s to be a creator.”
Epidemic Sound lives within the consideration financial system, in the midst of the creator financial system.
It’s tremendous clear that content material creation is right here to remain, and that the demand for our product is tremendous sturdy and retains on compounding.
On-line video is a big factor in brief type, medium type, lengthy type, stay type. The enterprise of syncing music to content material is extra related than it’s ever been.
Underpinning our success is our dedication to audio. We’ve stayed targeted on our core and being one of the best soundtracking platform on the planet.
IN THE annual REPORT, YOU SHARE SOME EXTRAORDINARY METRICS BEYOND FINANCIAL outcomes. WHAT TRENDS IN MUSIC CONSUMPTION HAVE YOU WITNESSED OVER THE PAST YEAR THAT HAVE SURPRISED YOU MOST AND INFLUENCED YOUR STRATEGY?
We’re on the scale now the place we get roughly 3 billion every day views on content material that our music soundtracks. That’s the equal of roughly 20 Tremendous Bowls per day.
The overwhelming majority of that’s YouTube, and the second half is TikTok. So it’s each very quick type and in addition lengthy type.
We energy roughly 75% of the world’s 200 largest YouTubers who come to the Epidemic Sound platform to get the music they need.
That is all a consequence of us diligently working with essentially the most prolific storytellers of our time.
Typically, we’re seeing that there’s extra music getting used throughout the board, extra distribution occurring, and it’s traversing totally different platforms – going from video into streaming after which again once more.
Let’s discuss AI. THE NOTION OF ‘FAKE ARTISTS’ HAS TAKEN ON A COMPLETELY DIFFERENT MEANING WITH THE PROLIFERATION OF AI GENERATORS. HOW DO YOU SEE AI-GENERATED MUSIC AFFECTING THE MUSIC BUSINESS TODAY AND EPIDEMIC SOUND’S BUSINESS SPECIFICALLY?
We expect AI is unbelievable, however we expect that AI is a instrument to assist serve human creativity, by no means to exchange it.
In the whole lot we do, we make sure that AI contributes to human expression and the artistic expertise.
We expect it’s extremely vital that [companies like Epidemic] are the proprietary homeowners of the underlying dataset that you simply practice on. Accessing totally different [AI] fashions is much less related as they’re turning into extra of a commodity.
The third vital element is attain and distribution; we’d like reinforcement studying loops, such that, whenever you do put out AI powered merchandise and instruments, you want suggestions as rapidly as attainable.
That is the place our large footprint is available in. With 3 billion items of sign each day, we will instantly decide what parts are resonating with both artists or with video creators and throughout totally different platforms. We will mixture all that sign after which we will pipe that sign again to the underlying information set.
“We expect it’s extremely vital that you’re the proprietary proprietor of the underlying dataset that you simply practice on.”
Then we will iterate and iterate and create one thing new out of that. In order that’s manifested itself into three totally different merchandise:
- First, we assist content material creators clear up the ‘chilly begin’ downside by utilizing AI to establish what music is related for what sorts of video content material. For instance, if I have been to add footage of Las Vegas, we’d run our AI on that piece of footage. We’ll then have the ability to see all the opposite items of content material that we’ve soundtracked which have related backdrops, related footage, what music has traditionally been used, and the way it carried out.
- Instance quantity two: Let’s say that you simply discovered a selected monitor that we have been capable of suggest. We now have the chance to do totally different variations of tracks when it comes to [adapting] the size. Traditionally, you’d discover a monitor and it’s perhaps three minutes lengthy, however the video you’re seeking to edit is perhaps 15 to twenty seconds-long. We will 1745556091 adapt and alter [the length of the track using AI] and [create] totally different variations at 18 seconds, 15 seconds or 12 seconds with computerized edits. We’ve gone from a world the place the video producer needed to be a sound engineer and take a look at reduce these tracks, which you and I each know is time-consuming and fairly troublesome. So AI has made life a lot simpler for stated particular person.
- The third level is one thing that we’ve launched fairly just lately, however to nice avail, which underpins our whole strategy to AI on the generative facet. We’ve simply launched one thing referred to as Human Voices. We’ve gone to skilled voice actors, and we’ve commissioned them, and so we’ve paid them upfront to coach on their voice. We then put aside a definite royalty pool for them, much like the Soundtrack bonus that we’ve got now, which encompasses thousands and thousands of {dollars}. Such that when storytellers use these fashions and use these voices, not solely have the actors been paid up entrance to coach on their voices, it’s going to generate royalties which we pay out to those actors going ahead. And this can be a royalty that didn’t exist earlier than. Out of the blue we’re pumping cash into the creator ecosystem, versus utilizing AI to only extract worth.
It is a essential level, as a result of I believe there lacks a imaginative and prescient for hope because it pertains to AI. Content material creators see AI as one thing that’s coming after them. We’re very clearly positioning this as the other.
YOU MENTIONED EPIDEMIC SOUND ARTISTS ARE UNDER NON-EXCLUSIVE AGREEMENTS. HOW DO YOU SEE EPIDEMIC SOUND POSITIONED IN THE GLOBAL MUSIC BUSINESS TODAY IN TERMS OF OPPORTUNITIES FOR ARTISTS?
We strongly imagine in incomes the belief of our artists. Our agreements are non-exclusive; we wish to present unbelievable alternatives, and we imagine that so long as we preserve specializing in that, and offering nice alternatives, individuals will reward our efforts by sticking round. On the identical time, we’re adamant about not being unique. We would like extra alternative for artists, not much less.
“We run a restricted market the place lower than 0.3% of all of the individuals who attain out really get accepted.”
On the identical time, we’re not an open market [like] many different DSPs. We run a restricted market. We get tens of hundreds of artists who yearly attain out and apply to work for Epidemic due to the distribution, the monetization, due to the information we offer, and due to the camaraderie that we’ve been capable of arrange, and the model that we’ve constructed for ourselves.
Lower than 0.3% of all of the individuals who attain out really get accepted. So 16 years in, it’s very troublesome to turn into an artist that will get to ship music to Epidemic. Most of the time, that you must be an Grammy Award-winner, or at the very least nominee, as a way to have the chance to take part and contribute.
So it’s in that approach that we’re totally different from many different platforms on the market. We’re not open to everybody. We attempt to be very bespoke, excessive profile, and [set] a high-quality bar.
REUTERS just lately REPORTED THAT EPIDEMIC SOUND WAS EXPLORING STRATEGIC OPTIONS, INCLUDING A POTENTIAL IPO. CAN YOU CONFIRM OR DENY THAT?
For the 16 years I’ve been operating Epidemic, there’s been a endless, fixed flurry of rumors about soon-to-happen IPOs or different monetary occasions. I can report that no, we’ve got no such intention proper now.
2024 was a yr characterised by a number of learnings. The Creator financial system remains to be in its infancy. I’m solely targeted on constructing a world-class enterprise whereas experimenting, understanding new alternatives, understanding our new instruments, and constructing out the providing for artists and content material creators.
I’ve no real interest in exploring some other setups or choices. We’re tremendous well-positioned proper now. We’ve got an distinctive cap desk of householders who’re very enthusiastic about the place we’re and what we’re constructing. We’re totally targeted on that.
WHAT DO YOU SEE AS THE MOST UNDERVALUED OR OVERLOOKED OPPORTUNITY FOR EPIDEMIC SOUND’S BUSINESS THAT THE WIDER TRADITIONAL MUSIC BUSINESS MIGHT NOT FULLY APPRECIATE?
Distribution is extremely vital – reaching an enormous quantity of individuals. If artists have a spectacular voice, they wish to attain as many individuals as attainable and maintain themselves by means of their abilities. Making an attempt to serve that higher than anybody is a big alternative. In order that comes right down to The “Epidemic Impact”.
In 2024 we did a number of experimentation round understanding how tracks journey throughout social media and social video platforms onto streaming platforms. What are the conditions, and what are the alerts of success? Understanding how that performs out is tremendous attention-grabbing. The distribution element, the advertising element, the breaking of recent artists – these have been challenges for the longest time.
We’re additionally educating a complete technology in a brand new approach to pay for music utilization. Our subscription is now used the world over round by storytellers, and we’ve educated them that you simply pay for music up entrance. Sure, we’ve got a distinct mannequin and we’ve made it tremendous easy, however we’re ensuring that everybody is paying for music. These are two vital components of worth that we carry to the desk.
WHAT ARE YOUR AMBITIONS FOR 2025 INTO 2026 FOR YOUR FINANCIAL METRICS, CONSUMPTION METRICS, AND EPIDEMIC SOUND’S POSITIONING IN THE GLOBAL MUSIC BUSINESS?
For positioning, it’s not misplaced on me that Epidemic has held a really low profile for a few years. Now we’re being more and more extra open, extra vocal and really clear concerning the high quality of our roster and the extent of artistry. Showcasing the attractive artistry and the unbelievable expertise we work with is entrance and heart as a result of it’s in our artists’ pursuits, in our clients’ curiosity, and within the trade’s curiosity to see what we’re reaching.
Quantity two is the underlying metrics for a way the enterprise is performing. We’re very targeted on persevering with to be the soundtracking platform of selection for content material creators. There’s the musical element to that and there’s a technical element we haven’t spoken about a lot – launching extra plugins into enhancing suites, writing extra AI instruments to hack away on the friction that’s sync, that’s soundtracking. Democratizing entry, and making it simpler for individuals to precise themselves creatively utilizing audio.
Financially, I don’t wish to decide to something going ahead. We’re nonetheless on the early phases of the Creator financial system, so we’re investing rather a lot in operational effectivity, understanding our processes, ensuring that it’s the appropriate particular person on the proper time, doing the appropriate factor in the appropriate a part of the world. And so a part of it’s rising up and coaching that muscle such that we will carry on compounding and exhibiting that that is, over time, a really profitable enterprise.
However in parallel, we’re committing to not giving any forward-looking numbers, as a result of we wish to proceed to run a ton of experiments. There’s a lot occurring in our house proper now and arguably on the planet normally, that we wish to make it tremendous clear that we’re nonetheless in constructing mode.
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