Epidemic Sound's CEO reveals the strategy behind new AI tool - with Oscar Höglund and Steve Wright

0:00Ian Shepherd:On this episode of The Business of Creators, I'm joined by Oscar Höglund, co-founder and CEO of Epidemic Sound. We dive into how AI is reshaping music, the launch of Epidemic's new tool, Adapt, and why sound is at the heart of storytelling. It's quite common you find a track, but then in order to get that track perfect for the story, you need to shift gears and become an audio engineer to reduce the length of the track. or maybe there are instruments which aren't advantageous for the voiceover or maybe the tempo is wrong or the pace is wrong. And so the idea behind Adapt was put these tools in the hands of creators such that they can make those decisions immediately and have even more creative control over the output.

0:40Ian Shepherd:We're also joined by filmmaker Steve Wright, who provides a creator's perspective to using music, explaining just how important music really is to the creative process. You can completely change the way someone feels by simply swapping out a backing track. So it's an incredibly powerful tool. As someone who spent four years in the record industry, I love how Epidemic are using AI to enhance the creative process and pay artists more. This is a conversation about the future of music, AI and the creative economy you definitely don't want to miss.

1:18Ian Shepherd:so oscar what was the original vision for epidemic sound and how has it shifted now that you're leaning into ai so the original mission with epidemic sound was to try and solve um for two areas of frustration so on the one hand we had all these incredibly talented content creators amongst them our founders as well because i'm one of five and it turned out that adding music to content was incredibly difficult. Dare I say broken. Finding music, licensing music, reporting it, and then distributing it was an absolute nightmare. And so on the one hand, we said we'd really love to change that. On the flip side, we had all these incredible artists, musicians, who had great voices, great music, but they had a tough time, A, sustaining a business, and two, finding distribution.

2:01And we realized that there was this unique magic that could happen if we were able to be innovative and connect these two groups together with each other. So that was the founding spark 16 years ago. And I'd say that the initial innovation was one around legality and taking away friction and allowing for content creators such as Steve to use music at scale. Second innovation point, I would say, was around software when we started building tooling and platforms and integration such that the workflows of Steve and others just dramatically improved. And then you can say AI is just a natural continuation of that where we've now gotten to a point where we can ultimately help and use AI just as we've done with the legal construct, just as we've done with software.

2:38We've always strived to create these win-win situations where we've now come up with a smart way we think to use AI to both help Steve in his endeavor to create even more compelling content, but also to help artists just get more music out there, more benefits, more distribution, and of course, much more monetization.

2:54Ian Shepherd:Excellent. Well, I'm really excited to get into the detail of it. But before we do, Steve, as a filmmaker and content creator, what role does music play in the way you approach content? Music is critical with what I do. It sets a mood, it sets a tone. And there's a couple of ways that I use music, particularly in the videos that I create. And the first is that I use music when I'm talking to the camera. So if I'm doing a tutorial, I just want something in the background that just sets a mood or a tone. I don't want anything that's too distracting. I'm not looking for sort of peaks in the audio, just a nice rhythmic beat in the background.

3:30And I'm always amazed by just what difference swapping out that music can make to the feeling in which I'm talking about. So for example, generally speaking, I'm talking about filmmaking, or I'm using products. So an electro rhythmic beat works really well with that. But there are situations where I'll swap that out. So for example, I was recently creating a video about a drone and I was giving some tips on different shots that you get with this drone. And one of them was a flyby. And the idea was that the drone flew straight past my head to reveal a beautiful landscape. And I mistimed it and I took the drone to the back of the head and the drone just rolled off the cliff.

4:10So then I had to climb down the cliff to try and retrieve this drone. So in that case, I swapped out that usual electronic rhythmic beat to a really quirky comedic track in the background and it just worked really really well and i was weighing up whether i go with that or a more kind of dramatic orchestral piece you know but the comedic one just i wanted to i wanted that that mood of this is silly and stupid how have you done such a such a thing you know but yeah just swapping out those two backing tracks made a massive difference to the feeling that it gave during that moment so it's absolutely huge And then there are other instances where I'll use music.

4:46For example, I might have a B-roll sequence, a cinematic B-roll sequence, in which case I'm looking for something that is the total opposite of a rhythmic beat, OK, because that's incredibly boring. There's no sort of peak or anything like that. So then I'm looking at the waveform. I'm looking for tracks that start slow and build, maybe end with a crescendo so I can create some kind of story arc. But without music, none of that is possible. So for me as a content creator, music is absolutely critical.

5:13Ian Shepherd:Excellent. Well, it's lovely to have you on the discussion as well. Now, Oscar, I know you've just released your future, the creator economy report for 2025, where you surveyed 3 ,000 creators. What surprised you most about the findings? Well, I think the thing that really sticks out and that underscores everything is the growth and the professionalization of the creator economy. When we launched Epidemic 16 years ago, I needed a very long elevator ride to keep my elevator pitch because I had to explain what this industry was all about. Fast forward to today, I think there are so many different nuances, so many different business models, so many different ways for creators to sustain themselves and get out there.

5:49That is quite astonishing. And so a number that popped out was that close to 98%, as in almost 100 % of all creators now, have this very professional creative slash commercial vision in terms of what they want to do. I think that speaks to this industry has gone from a place where everyone is a creator and is treated as a creator to evolve that besides being a creator, people are also becoming entrepreneurs. I think people are starting to see the contours that allow them to dream and think that individuals can probably be building the next Star Wars, the next Disney, the next massive IP businesses.

6:26JC once famously said that I'm not a businessman, I'm a businessman. man, he'd become an entire empire in himself. And you look at Mr. Beast and others, we're seeing that more and more happen. So revenue streams are proliferating, platforms are proliferating, there's plenty of competition, most of it healthy. And it's just a very dynamic entity. And so I think that that really stuck out. That's the scale and the sophistication that sort of is starting to set in in more and more places.

6:51Ian Shepherd:The stats that I saw was that 91 % of creators are already using AI. did that surprise you? I think yes and no I'm careful nowadays to use surprise and AI in the same sentence because quite frankly nothing surprises me anymore but that the number is 91 it stands out and what I think that that speaks to the untold story perhaps is that I think that there's a bifurcation going on in that in the creator economy it's almost as though there are two kinds of AI now one AI which creators are excited to use and one which they tend to shun And I think that the divider here is that there's AI which is systematically designed to marginalize and diminish the value of creators, whether they are video creators or music creators.

7:33And these services typically get a lot of skepticism and lack adoption. And then on the flip side, you have companies who are trying to think about it in a different way, which is quite obviously where we stand firmly and clearly, which is how can we deploy and develop AI such that we create this perfect win-win scenario? One where creators reap the benefits, where artists reap the benefits, and AI is in the service of humans as opposed to trying to replace them and diminish them.

7:57Ian Shepherd:And one of the other things that caught my attention was that so many creators, I think it was 94%, said that music is critical to the content success. I mean, Steve used a great example there. Why do you think music carries that much weight? Because it affects people's emotions, you know, and when people are emotional, they remember things. and it creates, it sets off a spark within them. And it's incredibly powerful to be able to do that. And you're essentially doing that through music. Like I said, you can completely change the way someone feels by simply swapping out a backing track. So it's an incredibly powerful tool.

8:34And it's something that without it, I just don't think it would be possible to do what I do. There's absolutely still a time and a place for a video without music and you can still deliver great value. but equally there are types of content that it just doesn't work without and the same with the television and the film industry you know if you watch a netflix film and there's zero music in it there's no score there's no nothing it's going to feel really strange it's going to feel lifeless it's it's such an important part of creating content filmmaking and just the entire industry in general couldn't agree more steven if i just latch on to that i remember a few years ago when i was asked to come to my son's school and present it was basically being bring a parent to school day and people knew that I was working with music and they assumed that I would talk about that.

9:18I did, but I think I shocked them because I said that you will think that I work with music, which is partially true, but actually my business is the business of emotions because music is the language of emotion. It's how you tap into emotion. And if you think about it, you have these five senses and you can choose not to touch something. You can choose not to watch something, not to taste it. You can choose to close your eyes, but you can't choose to turn your ears off. So it's this incredibly powerful conduit which needs to be treated with a lot of respect because it is so powerful. And I went on to play all these different tracks and some of them were Star Wars related or Bourne or James Bond or Frozen.

9:53And I asked all the kids to stand up and tell me what they were thinking about. And the reactions were so emotionally driven, so instinct based that this is Friday, popcorn, scary, mom, dad, film, theater, laughter, sadness. And I think to Steve's point, I can't emphasize that enough. I think it's such an important component because when we talk about it internally, I'm a little bit of a foodie, even though I can't cook to save my life. But we talk about food without taste is the equivalent of content without music. It's dead calories. Like, I really love this bland, tasteless food, said no one ever.

10:25But if you turn something and you add umami and taste to it, not only are people going to love it and it's going to be memorable, if you get it completely right, it's absolutely unforgettable. And as soon as you hear that track or that sentiment or the Jaws intro, immediately you're pulled into a state of mind. And sometimes you want to tap onto reminiscing. So you want to play music which people have a preconception. But most often it's the other way around, which I'm sure Steve can testify in terms of you want to use music to help build the sensation. Exactly as you were saying before, Steve, this is what I want you to feel.

10:58And now you feel it. And now you can see what I want. And then I build and I can change and I can contrast. And it's such an incredible medium. That's why I think it's so important to many. And I like that you said there, Oscar, that when you use it right, because that's a really key component. If you just put music for the sake of music's sake and it's not right, it doesn't work. It's very similar. I liken it to spice, you know, with the great spice. If you put too much, it just overpowers the dish and it's disgusting. But you get it right and everything just tastes perfect. And that's what it's like with music.

11:29If you put the right music and you use it correctly, yeah, the emotion, the mood, the feel, everything changes.

11:35Ian Shepherd:That's a lovely analogy there. And I'm curious, I mean, I worked in the music industry 15 years ago. I worked for Universal Music. So much has changed now with social media. How do you think music discovery has changed, particularly in light of platforms like TikTok versus, let's say, 15 years ago when the record label were driving everything via radio play? So, Steve, I can never go at answering this. I think that the answer is quite dramatically so. And I say that for two reasons. One, because I believe it to be so. And two, because I know that we've helped change it as well. So Epidemic is now at the point where our music is played 3 billion times per day.

12:13So that's B in billions. And the fact that it's played 3 billion times per day is the equivalent of like 20 Super Bowls every single day, 365 days per year, 24-7. And so speaking from that place of signal and insight, We've seen like a material change. I think if I were to summarize it, I think that there's been a democratization of access. So gone are the days where there used to be traditional gatekeepers, either on purpose, as in labels, or because of how the infrastructure was built in terms of distribution and getting access to records and CDs or whatever was the medium of carrying music.

12:49As that now has transitioned into online media, I think that those gatekeepers are gone. And it's much more of a meritocracy, as in there are, what, 100 ,000, 200 ,000, 300 ,000 tracks per day being uploaded to Spotify. I forget the number, but it's huge, obviously. And then the amount of content being put out dwarfs that by a factor of 10, I guess. And so there's so much more input, so much more output, so many more platforms. So I think that the times we live in can be characterized as grim from a geopolitical perspective or from an environment perspective. but I do think it's fair to say that from a music perspective and from a creator perspective, the past 10 years could arguably be characterized in future years as the renaissance, like the modern renaissance in terms of how music and content and expression has proliferated, how people like Steve and other people around the world have just found a great platform, great voice to voice themselves, their interest, music, artist, attribution works much, much better now.

13:45And so I think that there's this huge opportunity if you're willing and you're interested to lean in. Yes, it's never been more difficult to stand out because there's so much optionality, but there's never been a fairer, more level playing field where real talent, real passion really pays off. And that excites me a lot.

14:02Ian Shepherd:Yeah, that's great. It makes absolute sense as well. Now, I'm really keen to talk about your new tool, Adapt. Can you explain to everyone listening what that is, what the mechanics of it are, and what exactly can a creator do that wasn't possible before. I'd love to do that. So the first way to position what we've built, I think, is to take a step back. Because we took a long, hard look in terms of, we clearly want to build something here which creates value for content creators, but also for music artists as well. And so we spent a lot of time at the drawing board. And we said, principally, we do not want to be part of a narrative where we are unleashing huge amount of generative AI music to flood the world and diminish the value of music made by incredible talented artists or for that matter makes Steve's life even more difficult in terms of finding tracks and determining what tracks to use and so instead the approach we took was quite the opposite we said that let's use the fact that in our catalog of music we have a quarter of a million pieces of IP and let's release a product that we call Adapt and the name kind of gives it away because what we're doing here is we're doing two things.

15:07From the side of a content creator like Steve, we're saying, how can we reduce the toil, the things that you spend a lot of time doing where you don't have agency, we don't add value, and when your taste and your vision isn't front and center? How can we take out the stuff which is just repetitive or less value creating? So that was one part. The second part was, how can we do that in a way such that AI works to platform and superpower artists and musicians? and the answer was adapt and so the first thing we did is we said that we're going to provide a service where content creators can find music and then they can adapt music and the reason for this was that we learned firsthand from talking to many many content creators and steve can give you much more detail around this we want to try and find situations where there's a lot of repetition and frustration and so it's quite common you find a track but then in order to get that track perfect for the story you're looking to tell is going to take a ton of time.

16:01Suddenly you have, you need to shift gears and become an audio engineer to reduce the length of the track, or maybe there are instruments which aren't advantageous for the voiceover, or maybe the tempo is wrong or the pace is wrong. And so the idea behind Adapt was put these tools in the hands of creators such that they can make those decisions immediately and have even more creative control over the output. And then on the flip side, from an artist perspective, we said that we want to put out a narrative of hope where our success is going to be aligned with the success of not just Steve, but of artists instead.

16:35And so we said that if we start with music made by humans, we can probably do two things because the likelihood that in this case, say Steve is going to fall in love with a track from Epidemic is say one in 10. But if Steve can take that track and there's a spark of interest and he can adapt it slightly, then that's going to dramatically increase the amount of usage of that track because you can wheel it into the exact form that you like. So suddenly more creators are going to fall in love and see more utility with your music. There's going to be more distribution and we then put our money where our mouth is and we put more money.

17:05So we increase the royalty payouts to artists with 43 % and we put in place a mechanism such that anytime tracks get adapted, there's an even greater payout to artists. So in a nutshell, we're trying to create something where content creators win artists win creativity win and ai is a tool to supercharge humanity instead of a power coming in to diminish and squash creativity that was the thinking yeah no

17:32Ian Shepherd:i mean it's a lovely lovely way to frame it and steve i know you've said that adapt completely changed how you approach editing can you give us an example like before and after what did that look like yeah i mean it's it's massively changed from i'm all about efficiency i want to get stuff done quickly, but what I don't want to do is have a drop in quality. Okay. We can always speed things up, but then we're pumping out a load of rubbish. So we don't want that. We want to be efficient, but more specifically, I want to get rid of those boring mundane jobs that I just don't enjoy. The least amount of those I can do and the quicker I can get to the fun bit, the better.

18:05And this is a really good example of that. I remember vividly because I've been doing this for a while now, the frustration of finding a track that was almost right, but if it's not right. It's not right. It doesn't work, as we've mentioned earlier. And that might be something, it might just be that there's a vocal in this track and I want it as a background track and the vocal is distracting. So I would like to be able to remove that vocal. Back then it wasn't an option, but now with features like Adapt, that's possible and beyond. Not only can I at the tap of a button remove the vocal, I can completely change the structure of that tracks.

18:40Let's say there's some drums there that are also a little bit too distracting. I can remove those. Another classic example would be, let's say I'm creating a 60 second sequence, maybe it's for social media, and I found a really great three minute track, but I only need it to be 60 seconds. Going back just a couple of years, I'd have to download that three minute track, I'd have to chop out the middle, I'd have to somehow fudge the end onto the beginning and try and make some kind of 60 second edit. And it was just a complete nightmare. And it would literally take days of time. and now I'm able to without before I even download the track I'm able to restructure it rearrange it delete things loop it I can type in let's say I have an edit that's 50 seconds long 50 seconds and it will give me a 50 second version of that track and multiple versions of that track so there might be one that starts slower and builds there might be one that has the same pace throughout but just having that at the click of a button saves me a massive amount of time and it's compound interest, if there are features like this that exist, and we use them to get rid of all those boring mundane jobs, it frees up my time to be more creative.

19:49So all of a sudden, I'm in a position now where maybe before I was only able to put out two videos a month. Now I can put out one a week. Now I've doubled my revenue. Now I can maybe go from part time to a full time content creator. So these may seem like insignificant things to some people, but actually, they're genuinely life changing for content creators because it is the difference between them making a living or not yeah no that's

20:13Ian Shepherd:a really great way of putting it i'm wondering steve as a creator yourself like how important is it for you to know that the artists are also being fairly conversated when you're using their work yeah yeah i mean this is a really big one for me because we know that this ai wave is i was going to say coming it's here already isn't it and it is you do have this feeling of is this just a huge tsunami that's going to wipe us out particularly like someone like me who's a content creator the amount of videos that i see that are just prompt generated you can just type in a description and now you have it as a video so we're in a sort of a scary time but if there are if there are ai tools out there that aren't and this and this is really key it's helping versus replacing right the thought of ai replacing us us being everybody content creators anyone and helping is huge.

21:04So I'm constantly looking for AI tools that help don't replace again, whether that's getting rid of a mundane job, those boring things that I don't want to do. For me, that's absolutely key. But then also as a bonus, if we can be allowing creators to also benefit from this, so in this case, artists, so not now only is there music being used by more people, because it's like you mentioned if only one track out of 10 is suitable for me now there's a good chance it's literally switched to maybe 90 chance that there's a track there that is going to be perfect for a project that i'm looking on so not only is it benefiting me it's benefiting the artists that create those tracks and they're being fairly compensated so i think this is a great ethos to have in this worrying time of AI.

21:53So the more that we can do to contribute artists, the better.

21:56Ian Shepherd:It sounds like a win-win all round. And I was really fascinated to learn about the creator council epidemic. Steve, what role do creators like you play in shaping the company's direction? Yeah, that's a really interesting one. So I feel quite privileged in that, you know, we get to jump on calls every quarter or however long it is, essentially whenever there's a new feature in development. And we get to test that out. And I think that's really beneficial. At least I hope it's beneficial to epidemic sound because the last thing that you want to have happen is because, you know, a software engineer and a content creator are going to be thinking slightly differently, right?

22:32They may have the best intentions, but until you're actually using these features in real world scenarios, you don't really know what problems exist yet. So we're fortunate in that we get to test these out. So I will literally start to use these features on real world projects. and normally quite quickly you can identify something that isn't quite working so then that's an opportunity to jump on a call give some feedback let them know what's working what might not be working and then that allows them a chance to fix an update and that's not to say that once it launches it's not going to continue to evolve but what it does mean is that you're not launching something which has from a content creation perspective an obvious problem and you're rolling that out to potentially millions of people are all going to start complaining because then you lose trust in the brand, which is exactly what you don't want, right, as a business.

23:22So I'd like to think that it plays a pretty key role in the success of the business, certainly building brand trust. Ian, if I can just hop in there, I just want to 100 % validate everything that Steve said, and maybe even then some, because we are literally nothing without creators and artists, literally nothing because we have one mission here which is we want to be the best soundtracking platform on the planet and as such we are passionate not about our own solutions but about the problems that steve and people like steve experience every single day and so sometimes we break down in the most extreme form like what epidemic is ultimately trying to provide to content creators and that steve now here serenades very kindly is we want to provide performance efficiency and peace of mind it's that simple and peace of mind is incredibly important like if you put something out there steve you referenced two videos in a month which i think is like a great proxy for exactly how much time and love and sometimes it's way longer than that if you don't have the rights to your music if you get demonetized if your channel gets blocked or if you get revenue put in escrow that's game over like that can be life altering you get evicted kind of bad And so peace of mind is incredibly important.