Business News Labels & Publishers

Epidemic Sound business model back in the spotlight after new statement from musician and songwriter groups

By | Published on Thursday 24 September 2020

Epidemic Sound

Two organisations representing musicians and performers yesterday joined forces with pan-European songwriter grouping ECSA to issue a statement criticising Swedish production music company Epidemic Sound, and in particular, hitting out at its recent partnership with software maker Adobe.

Unlike more traditional production music companies, Epidemic Sound operates entirely outside the collective licensing system. This means it doesn’t have to operate according to rules put in place by the music industry’s collecting societies regarding its relationship with the musicians and composers it works with, the ownership of the rights in the music they create, and how it issues licences to video-makers who want to use that music in their audio-visual productions.

As a result, Epidemic Sound can acquire all the rights in the music it commissions, whereas traditionally at least the performing rights in the song would be excluded from any deal, with the songwriter’s collecting society representing that element of the song copyright.

That in turns means Epidemic Sound can provide its customers with one-stop licences, meaning said customers don’t need to get additional licences from or pay additional royalties to a collecting society. But, the societies argue, that stops the musicians and songwriters from getting future royalties when videos containing their music are broadcast or streamed.

The songwriter-repping European Composer And Songwriter Alliance has hit out at the Epidemic Sound model before, as have the Ivors Academy and Musicians’ Union in the UK. Yesterday the International Federation Of Musicians and the Association Of European Performers’ Organisations put their name to the latest statement criticising Epidemic.

They said: “Over recent years, the Swedish company Epidemic Sound has grown extensively by selling ‘royalty-free music’ to various commercial companies, like video-on-demand platforms and TV stations. It uses 100% buy-out contracts – whereby music authors and performers sell their rights for the full term of protection in exchange for a lump sum payment – depriving them from payment of royalties and equitable remuneration, which are essential to their livelihoods”.

Focusing on the recent Adobe deal, the statement went on: “While our organisations regularly receive complaints from music creators about these malpractices, the tech company Adobe has recently partnered with Epidemic Sound … to launch a library of ‘royalty-free’ music. This partnership further hinders the music creators’ ability to earn a living from the exploitation of their works and performances”.

Noting the impact of COVID-19 on the music community, they added: “The expansion of Epidemic Sound represents yet another threat to the fair remuneration of authors and performers in the music sector and their ability to develop sustainable careers. We therefore firmly condemn this partnership, which relies on the expropriation of music authors and performers from their rights and legitimate revenues”.

When previously criticised over its model, Epidemic Sound has countered that its critics have never sought to directly discuss its approach either with the company itself or the musicians it works with.

CEO Oscar Hoglund basically said that again yesterday in response to the new statement, telling CMU: “Yet again, ECSA has publicly condemned Epidemic Sound without checking the facts with us. Our door is always open if any organisations want to engage and hear from us – or the musicians we work with – about how we support them creatively and financially through our upfront payments and 50/50 royalty splits”.

Although Hoglund didn’t go into any detail in responding to the latest criticism from ECSA et al, one of the musicians who works for the company, Pär Hagström, did join a debate on Facebook that was instigated by yesterday’s statement.

He argued that while the company’s model means he doesn’t get additional royalties from all future uses of his music via the collective licensing system, the upfront fees he receives have provided him with a degree of financial security that allows him to pursue other much less lucrative music projects.

“Working for Epidemic Sound”, Hagström wrote, “has given me, for the first time, a relatively stable income that comes directly from my creative work. I deliver music to Epidemic Sound on a monthly basis and get a basic income that allows me to invest my other time in projects that are worse paid, or often even unpaid”.

One Epidemic Sound critic also taking part in the Facebook debate pointed out that that financial security will only last for as long as Hagström is providing new music to the company, whereas under the traditional model if his music gets used in the long-term he’ll receive additional income in the future.

Hagström conceded that was true, but argued that getting paid a decent fee for work done now rather than relying on future income relating to past work is actually the way things operate in most industries, and that it’s the traditional production music business that is unusual.

Although, he stressed, he wasn’t criticising musicians and songwriters who prefer the traditional approach. However, he feels music-makers should be able to choose between models.

He also noted that the collecting societies don’t currently offer that choice because, to work with Epidemic Sound, you can’t be a society member, because most societies’ rules basically ban members from signing an Epidemic Sound-style deal.

Of course, Epidemic’s critics might argue that – while choice is a good thing – the success of companies like Epidemic Sound is hitting more traditional production music libraries and the musicians who work with them. And they might also argue that that’s because the nature of Epidemic’s deals with its musicians allows it to compete on price.

Although there’s also an argument that a key reason for Epidemic’s success is that its model allows it to offer the kind of licences an increasingly online and increasingly global media industry needs, cut free from the complexities of legacy systems and collective licensing.

So a question also worth asking is how the traditional production music library business can adapt to those media industry trends. And so the debate continues!