The popularity of video and other streamed content like podcasts is continuing to grow at a breakneck speed, and today a startup called Epidemic Sound, a marketplace to source the background music for that media, is announcing a huge round of funding to scale along with it. The Stockholm-based startup has raised $450 million from Blackstone Group and EQT Growth, an equity round that values Epidemic Sound at $1.4 billion.
Epidemic currently features some 32,000 music tracks and 60,000 sound effects, and the plan will be to continue building out the technology on its platform to provide better tools to creators for matching music to media, to expand that catalogue, to grow its customer base, and to take the service global with more localized offerings.
$450 million may sound like a lot of money for a company that — if you’ll excuse the pun — hasn’t made a lot of noise up to now. But the funding is underpinned with some big ambitions and significant metrics.
“It ties into the size of the vision,” co-founder and CEO Oscar Höglund said in an interview. “We are trying to soundtrack the internet. That’s what it comes down to.”
For an idea of how the startup is growing, when we last covered funding for Epidemic Sound in 2019 (a more modest $20 million at a $370 million valuation), it saw its tracks playing for an average of 250 million hours each month on YouTube alone.
Since then, that figure has grown by more than 400% and is now well over 1 billion hours each month. Höglund says that in terms of streams, YouTube videos using music from Epidemic Sound artists are played 1.5 billion times each day. And that’s before you consider the traffic for Epidemic music used across TikTok, Facebook and Instagram, Snapchat and other platforms.
“The macro trend is exploding,” Höglund said. Counting composers and other creators, there are over 5 million people using its platform today.
But considering that there are around 37 million YouTube channels, and that’s not counting the many other places like Twitch, TikTok, Instagram, Snapchat and elsewhere that you might find people, there is a lot of room to grow.
“We look for huge open-ended markets, and [in this market] Epidemic is growing into an industry leader,” Jon Korngold, the global head of Blackstone Growth who led on its investment, said in an interview.
Epidemic Sound, positions itself as a commercial center, where performers can transfer their recorded tracks, and the individuals who need to utilize them can accompany a few thoughts as a main priority of what they’d prefer to discover — music is accessible by classification, temperament, instruments, beat, track length and fame — and afterward buy them with evaluating dependent on where they will be utilized, not how frequently they will be heard.
It additionally offers memberships for limitless utilize dependent on close to home use ($15/month) or business use ($49/month) for limitless admittance to everything, which is the thing that most of individuals use. It’s a recipe that helped the startup tip into benefit, despite the fact that right now it’s centered more around development and is back in red.
Established back in 2009, Epidemic was begun by Höglund and Jan Zachrisson to address a particular hole on the lookout: their point was to make it simpler, and less lawfully hazardous, to add music to advanced media. It’s amusing to consider it, however 11 years prior, the advanced music market was still generally about downloads, and the greater part of them (95%) were unlawful. This report from the IFPI at the time didn’t appear to specify gushing as an idea.
What’s more, to Epidemic’s chance, there were likewise no reasonable, simple to utilize commercial centers in presence to make music accessible, and to get it under simple authorizing terms.
“At the center, Epidemic was and is about the limitation free insight for makers,” said Victor Englesson, an accomplice and speculation guide at EQT Partners. “That was one of the enormous problem areas for client created content, and that has been valid since its beginning. Plague Sound controls 100% of the rights in its library.”
Quick forward to now, and the chance is less about offering simple authorizing, which currently is by all accounts table stakes, however more straightforwardly tending to a gigantic interest.
In reality as we know it where video has demonstrated to be a massively well known with customers — Cisco recently assessed that video represented some 80% of all web traffic in 2020, yet with those numbers dating from pre-pandemic, I wouldn’t be shocked in the event that it was more — it has additionally multiplied as a vehicle for makers. Obviously, a great deal of organizations have arisen to give apparatuses to makers to create and convey their video content, and that has included furnishing them with music.
That has prompted a beautiful swarmed market for soundtracking stages. Others in a similar region incorporate any semblance of Artlist (which additionally gives an inventory of stills and video; it likewise fund-raised a year ago), Upbeat, Comma and Shutterstock, among others.
Stages themselves additionally give music devices to makers, easygoing and something else, and that has reached out a long ways past YouTube.
On TikTok, tracks themselves circulate around the web and become earworms overnight. Also, it’s intriguing that Snap a year ago took an action that focuses to how it may use a part for itself in the music creation and scattering commercial center. A year ago, it unobtrusively procured an application called Voisy, which allows individuals to overlay and alter their own tunes and vocals over a determination of beats, and afterward share those manifestations.
Inside all that, Epidemic is something other than a basic stage for trade, nonetheless.
As well as working its own foundation, Epidemic likewise joins forces with different stages where individuals are making content, like Adobe, Canva, Getty and Lightricks, which offer Epidemic’s music streams as a component of their all inclusive resources.
Furthermore, there is likewise the “mind” behind what Epidemic has assembled. It tracks which music is utilized the most, and afterward how that music plays with crowds, it has been building a steady image of the music tastes of the worldwide market — a music diagram, so to speak — data that it thus uses to help sort music, match it up better with those searching for it, and to help urge authors to make further tracks to fulfill need.
“Since we gather information and on the grounds that music leaves an impression, we can see when there is an immense request metal children’s songs, for instance,” said Höglund. “We would then be able to commission a greater amount of that sort of track, and it will get gotten.”
The development of Spotify, and the monstrous ventures made by Apple, Google, Facebook and others into music streaming, recounts an account of how the actual music business has declined yet music listening particularly has not, a pattern just emphasizd somewhat recently, where shows were dropped and virtual streaming had their spot.
Epidemic is a fascinating contrast to these, zeroing in not on manages marks and the Billie’s and Beyonce’s of the world, however an exceptionally long tail of makers who may have no arrangements of the sort in their sights.
While organizations like Spotify have directed their concentration toward working out brands as adaptation stages for specialists, that was a piece of the condition for the beginning for Epidemic.
Music creatives get a forthright installment for each track Epidemic purchases, with installment shifting relying upon the track. It likewise parts the income from streaming stages where the music may later get played.
The organization says that on normal artists can make a huge number of dollars year, with a limited handful making countless dollars each year. “It’s gigantic conveyance and reach,” he said.
Also, some fill by their own doing, not similarly as unknown accomplices to video makers. Ooyy, Cospe and Loving Caliber are three that have gotten over into their own fame, so the hole between how Epidemic Sound is doing performers and what a stage like, say, Spotify or YouTube probably won’t be pretty much as wide as you would might suspect. (That likewise additionally focuses to some exceptionally self-evident and impressive contenders — or acquirers or accomplices — down the line.)
Joined with its size and development, it’s this motor that has assisted Epidemic Sound with developing what has become a beautiful swarmed market.
“This is, toward the day’s end, an information business,” said Korngold at Blackstone Growth.