Starting Epidemic Sound During the 2008 Crash with Oscar Höglund

0:00I came to understand the importance of music in telling a story. It's the equivalent of taste to food, right? So food without taste is not memorable, doesn't make an impression. And content without music is just the same. You need the music to really make it stick and make it memorable. Go from somebody liking something to somebody actually loving it. But it was broken. Oscar Hogland, co-founder and CEO of Epidemic Sound. People who want to tell compelling stories. The mechanism of adding music was broken. You didn't know who to pay, who to report, how to use. the culture of adding music was broken because music didn't blend well with other pieces of content.

0:36Welcome to this special bite-sized episode of Screw It Just Do It from our back catalogue of over 550 past episodes. If you like what you hear, don't forget to follow the show and grab your free two-day pass to the Festival of Entrepreneurs this October. Just head to festivalofentrepreneurs.co.uk to claim yours and don't forget to dive into the back catalogue. Now open for this year's Festival of Entrepreneurs. Join us at the NEC in Birmingham on October the 8th and 9th for two game-changing days with 200 plus speakers and thousands of ambitious founders. Get your free limited two-day pass at festivalofentrepreneurs.co.uk or click my personal link in the show notes.

1:12I would love to kind of dive back into, I think our audience really appreciates finding out, you know, they've heard where you are at the moment, but finding where you've come from to get where you are because, you know, so much of what we see now is perpetrated to be an overnight success which you've probably been told you're you're also an overnight success but it's taken you some what 13 years I think was it you know right in the last financial crisis you know everything we read at the moment we're led to believe we're literally on the edge of another one but you started a business at that time you know what were you thinking well um i think that the way to explain epidemic and understand epidemic is maybe to see it from a bigger context so there are we're five co-founders and we come from very different walks of life uh two are music creators and music producers i am not i make a point i joke on my own expense that i'm potentially the least musical person at the office sang once to my wife and we looked at each other and she said never ever again and I just nodded and said I agree I play the guitar in self-defense so I'm not musically skilled and I don't put a huge premium on everyone working at Epidemic having to be that because I think it's wildly it reduces the talent pool available on planet earth because I think that people can have many different different interests that said though I'm deep into poetry and lyrics and I can basically hear a song once and I understand and I remember everything that's been sung in that song.

2:47So music has always been close to my heart, even though I've not had the skill set. But I was fortunate enough to meet a group of people early on who had different skills, different ideas, but we had a common understanding and a common belief. And to just briefly give you my background, I'm a numbers guy at heart. So I grew up in the UK, moved to Sweden, eventually did business school in Sweden, and then in the US, and then moved back to Sweden and became a so-called management consultant. So I worked for BCG, a big American company. And the job was to, quote unquote, try and be the smartest guy in the room, come in, solve problems, work a lot all the time, don't question, come up with a plan.

3:22But then when you get to actually implement and do the fun stuff, you wave and say, saranara, and it's off to the next. I got tired of that eventually. And I tried to find something which was more fun and honestly something that resonated more with myself. And so I was very fortunate to run into my co-founder called Zach, who's 15 years my senior, punk rocker from the north of Sweden. And he just happened to run one of the largest production companies in Northern Europe. And he was looking for somebody who could help him make coffee, but also acquire companies. Somebody who could help organize a budget, but also get us onto a stock listing.

4:01And I thought that that was very diverse, super interesting. And so I joined and I find myself in this context where I'm completely different for everyone else. But the bigger picture here was that I fell in love with storytelling. So I got to work with TV production, TV shows and content creation. And it was very clear to us early on because we were in that fortunate position that TV production was at a point where it had gone mainstream. It was very, very big. It wasn't necessarily rock and roll anymore. It was becoming more of an industry. But we were turning more and more towards the Internet back then.

4:33And the internet at that time, 2007, 2008, was very tech-centric. It was all about writing words and sharing those words. And we had this strong hypothesis that over time, the internet is going to be much more of a picture-centric medium. So this dates Instagram, obviously. But over time, we knew without a shadow of a doubt that the internet, as you and I are interacting now, is going to be this video-centric medium because video carries so much more information. It carries emotion. and so video is going to pay a huge part in the internet and we stumbled upon tv production like the role of music and or i stumbled upon obviously everyone in the industry already knew this well ahead of me but i came to understand the importance of music in telling a story it's the equivalent of taste to food right so food without taste is not memorable doesn't make an impression there's no wow and content without music is just the same like you need the music to really make it stick and make it memorable.

5:30Go from somebody liking something to somebody actually loving it. But it was broken. It was fundamentally incredibly difficult to find, license, report, use music. And so all of that was broken. So you had all these things going on at the same time. And so we saw on the supply side, we saw that production companies, people like yourself, like ourselves, people who want to tell compelling stories, the mechanism of adding music was broken. You didn't know who to pay, who to report, how to use. The culture of adding music was broken because music didn't blend well with other pieces of content. You had to fill out music cue sheet reports and you had to ask for permission in a way which portrayed music as a higher art and stories as a lower art.

6:14And there had to be monetary compensation because of the lack of parity. And it was just very, very broken. And the flip side was that the music creators were suffering as well, because there were only a few subset music creators who were able to support themselves. The vast majority, music as a model wasn't working because the royalties weren't flowing to everyone. There were intermediaries. It was just getting stuck. So we saw these two significant problems. We sincerely felt that the world that we want to live in, that we ought to live in a world where adding music to content is the most fun part.

6:47If you're enjoying this conversation and thinking, I need to be around more people like this, then I've got the perfect solution for you. The Festival of Entrepreneurs is where 5 ,000 to 10 ,000 ambitious entrepreneurs come together to learn from the people who've actually done it. It's on October the 8th and 9th at the NEC in Birmingham, and I'm giving my listeners free two-day passes. Real entrepreneurs, real stories, real strategies, exactly like what you're hearing right now, but live and in person. Go to festivalofentrepreneurs.co.uk and get your free two-day pass before they're gone. When you cross your T's, dot your I's, you bring your content to life.

7:24And we then passionately felt on the supply side that we feel that music creators need to be able to sustain themselves, to make a living through their craft, make sure that their music spreads, they have something to tell, they should be able to reach as many as possible. So these were the two underlying problems that we wanted to try and address, that we stumbled upon. And the reason to bring it all together, like, why did we get the energy? What did we set out to sell to to celebrate was that we fundamentally felt that in years from now, like decades from now, hopefully there's going to be future generations.

7:58and I see myself walking down Stockholm like a beautiful day with one of my grandkids, let's say. And she's going to look at me and I like to think at some point she's going to go, granddad, isn't it fair to say that your generation, you invented the internet. Let's be honest, you almost screwed up the environment. Thankfully, you saved that last minute. But your enduring contribution to all future generations is that you invented the internet. And that's the foundation of how we shop, bank, create, educate, talk, just communicate. as a species, we do everything through the internet. And we high five and we ice cream and say, I think that's cool and she thinks that's cool.

8:35And then I know that she's going to stop and she's going to look at me and she's going to go, but granddad, if that was your generation's enduring contribution, how did you help out? What was your role in building the internet? And there's a short moment of existential anxiety and like my eyes go sort of left and right. But then there's a big smile because epidemic is about that moment because we set out to ourselves, we said that wouldn't it be amazing if we could try and soundtrack our generation's biggest collective achievement what if we are the company that gets to soundtrack the internet that unleashes creativity for everyone that democratizes access to stories storytelling mutual different culture different expressions just blending it all acknowledging that video is going to be at the center of all of this and we want to help the world use and get access to as much music so the internet is this rich beautiful place that we leave behind and not something that we have to be embarrassed for future generations that was the idea i love that that's fantastic and do you think so at that time when you when you started epidemic was that trying to frame it in my mind you know that stage where you know artists weren't getting the royalties that they'd previously received and the the way things have gone now is that you know artists are getting more of their from say touring or merchandise because of you know being gone from buying physical products from owning music compared to what would you call it leasing music or something like that with like the spotify and streaming and that kind of thing yeah i think that um if i were to try and paint a picture of what the environment was like when we launched i think the macro macro is where you started us off which was that we were in dire straits uh recession economy was not great people were struggling in general and then to add sort of injury to insult the music industry had it even worse because um sweden is famous for a lot of things unfortunately pirate bay is maybe one of them and so piracy was rampant music creators were suffering more and more streaming had started to come along but the volume wasn't there but the dismantlement of the record was and so you either had a hit not a record because a record could sustain multiple songwriters and music creators because there were 10, 12 different tracks to a record.

10:51But that had broken apart. So it was all about streaming. So you had a hit song or you didn't. So it was a very vinyl industry. And so the middle ground had disintegrated. So there were a few people who had massive hits and everyone else found zero income. So to your point, there weren't these auxiliary revenues back then. So you'd have an extra job. You'd have your hopes and dreams and maybe your recording studio in your basement at best. But then you'd have a part-time work at the British Mail or at a grocery store or as a temp teacher doing other stuff. So you had to run multiple jobs. So the outlook for music creators was not great.

11:28Then the business model in itself wasn't great because technology hadn't really gotten to that point where it was more depleting value back then because it was chaos. It wasn't until like a few years early on, you could start to really harness technology to make sure that ownership, recognition, reporting, distribution, access to fan bases, collecting payments, that's now been harnessed and put in place. So that really accelerates content creators' ability to sustain themselves. But when we started, we saw that, but we couldn't point to it because we had to build it ourselves. And we didn't do it in isolation.

12:01SoundCloud did its part, Spotify did its part and all the other platforms as well. So I think that nowadays, everyone can relate to the creator economy and it makes perfect sense. Yeah, yeah. In the first 10 years, that wasn't a thing. like yeah that didn't exist netflix binge watching had been invented so it was early days and we were very much to like the whole just do it we were driven by this vision we want to soundtrack the internet and we had to invent the infrastructure the business model create the music the logic the technology platforms to get where we felt that we ought to be that conversation just proved something you are the average of the five people you spend the most time with so here's my challenge upgrade your network the festival of entrepreneurs is happening october the 8th and 9th and i'm giving my listeners free two-day passes to get in the room with five to ten thousand entrepreneurs who are actually building something this is where the risk takers the game changers and the people who decided to screw it and just do it come for inspiration education and connection don't just listen to their success stories go meet the people living them grab your free pass now because the biggest risk isn't taking a chance it's missing the opportunity entirely so a couple of takeaways from oscar story and as a personal note on this um i discovered oscar hogland through the services of his business epidemic sound which we use myself use with a podcast agency when we're choosing music for for different podcasts and then i kind of dug into a little bit of the story and i was like wow i knew it was a successful business but i didn't know it was a billion dollar business a unicorn.

13:37A couple of things really, learning to trust your instincts when others say no. People will always say no. People won't want to always keep you where you are. It's just a natural reaction for a lot of people to have. Something I harp on about a lot on this show, and hopefully a lot of the examples of the people I interview back this up, and that's starting before you feel 100 % ready. Because guess what? You're never going to feel 100 % ready. That doesn't exist for anything in life. Starting a business, starting a family, getting married, any of those things. And the last thing, building something counterintuitive and winning.

14:18And again, that kind of leans into trusting your guts. You've just got to tune in what's going on internally with yourself and try to block out the noise, the white noise that's around you, what everybody else is telling you what social media is telling you what online is telling you all of those