Epidemic Sound, backed by Spotify’s investors, is one of a new wave of music companies expanding rapidly on the back of demand for easy access to original music from commercial users, especially YouTubers.
The global market for digital content creation, a rapidly expanding part of the entertainment industry and the quickest growing part of Epidemic’s business, is valued at nearly $11 billion and is expected to grow around 17% a year until 2025, according to market research firm Kenneth Research.
Sweden’s Epidemic managed to double its revenue last year to 234 million Swedish crowns ($24 million), as it muscles into the same market as traditional record labels, such as Universal, which hold copyrights and charges royalties, while also competing with tech giants like Apple which recently launched a music for business service.
Epidemic has a royalty free business model, making up-front payments for each track bought from musicians. It splits all music streaming revenue from a track 50/50 with composers and retains the exclusive rights to the songs in its library.
Its main competitors include production music company Audio Network, owned by Canada’s Entertainment One, whose subscribers get access to over 150,000 wholly-owned tracks for videos, TV and radio productions, and Music Bed, which licenses music to video creators.