In spite of audio translation has been making waves for years, it’s been a slow road to profitability for the Sweden-based music producer.
That narrative seems to have finally turned around, as the company announced on Tuesday (April 25) that it achieved a positive EBITDA — albeit a small one — last year.
However, the company’s operating profit (EBIT) remained in the red.
In it annual report in 2022Translation has reached EBITDA speed of SEK 2,818 million (US$278,000) on net sales of 1.181 billion SEK ($116.7 million).
That compares to the negative EBITDA of SEK -54.819 million (-6.4 million USD) on net sales of 694.2 million SEK (80.9 million USD) last year.
The outbreak of reported operating loss (EBIT) is 491,566 million SEK ($48.6 million) in 2022, expand 21% of the operating loss it posted in the previous year (see below).
The company said the Pandemic’s strong net revenue increase in 2022 was due to “significantly stronger streaming revenue”. declare.
The company’s partner sales segment, which includes streaming revenue, has seen 117% annually increase SEK 435 million VND ($43.0 million).
And its reach continues to grow: New annual report reveals that Epidemic’s music is heard 2 billion times a day on YouTube (up from 1.5 billion won in 2020) And 14 billion won times per month on TikTok.
In the report, co-founder and CEO Oscar Hoglund predicts Epidemic’s music will soon be heard 2.5 billion won times a day on YouTube.
Epidemic’s value proposition is simple: It gives businesses and content creators access to de-authorised audio content that they can customize however they want. In other words, it’s a one-stop shop for businesses that don’t have the resources or time to license more expensive, copyrighted music.
Epidemic’s business model revolves around producing large amounts of audio content, including music and sound effects, which it then either licenses to businesses or makes it available to content creators (such as such as on YouTube and TikTok) for a subscription fee.
It also generates royalties from streaming (its tracks are available on all major streaming platforms) and shares recorded music royalty revenue 50-50 with music creators.
It boasts a music catalog of 40,000 tracks, along with 90,000 sound effects.
In 2022, Epidemic acquired AP Records, a Swedish record label focused on mood music.
“Through acquisitions, [Epidemic] strengthens its position in the field of mood music by enhancing the ability to record people’s lives through music streaming platforms and by adding the opportunity to work with isometric musicians. world class from a record label,” the company said at that time.
“Global demand for unrestricted music continues to grow strongly, despite a tougher economic backdrop, and our full year 2022 results are testament to that.”
Oscar Hoglund, Pandemic
The business model of the epidemic has drawn criticism from several quarters in the industry.
Some have criticized the list of “fake artists” – that is, artists whose music appears under a pseudonym – and in 2019 the company received criticism from European Composer and Songwriter Alliance for “using a 100% repurchase agreement – in which music creators sell their rights to a track in exchange for a lump sum.”
While Epidemic pays 50% of streaming royalties to creators, that’s not the case when their music is authorized for use in advertising (the company boasts that their audio has appear in ads for lululemon, Walmart and Estée Lauder) or on social media. creator.
Still, controversy surrounding several areas of the industry hasn’t stopped Epidemic from attracting some big-name investors, including Blackstone, the world’s largest alternative asset manager, with around $900 billion managed assets.
Slat participated in Epidemic’s most recent funding roundby 2021, giving the company a $1.4 billion valuation.
According to the latest Epidemic report, Blackstone owns 18% company through the Blackstone Development fund (see below).
That makes Blackstone the second largest shareholder, after Sweden-based investment group EQT, to hold 32%.
In general, the epidemic has brought more than 500 million USD through five funding rounds.
In a statement, Hoglund said: “Global demand for unrestricted music continues to grow strongly, despite a tougher economic backdrop, and our full year 2022 results are testament to that. Epidemic Sound’s goal is to enable both artists and consumers to achieve creative and commercial success. As a result, throughout 2022, we have worked tirelessly to remove any obstacles standing in the way of that success, through improved software functionality and product features.”
Hoglund continued: “Through our solid balance sheet, the support of our shareholders and the Board of Directors, along with a number of key hires, we have both financial strength and team to continue our journey to grow and scale our business.”
All SEK to USD conversions in this story have been made at the average annual rate published by the IRS.Global Music Business
