Music streaming isn’t the future, it’s the present. Physical albums are dead and people seldom even download music anymore. Why would you, when everything is available just a few taps or clicks away? Platforms like Apple Music, Spotify, Tidal and SoundCloud are all vying to host artists’ music and garner listeners ears. SoundCloud became the platform of choice for underground artists and fans alike but changes over the past few years have alienated their core fan base in hopes of monetizing and turning a profit. From song take downs, to account removals, the changes to the platform have been killing the unofficial remix and leaving the industry reeling for a new solution. This is where Orfium comes in. The new streaming start-up has come up with a solution to host said remixes but that’s just the tip of the iceberg. With unlimited free hosting, a myriad of monetization, distribution and licencing options, it could be the most artist friendly music streaming platform ever. Oh did we mention 80% of revenues go to artists? To better understand the platform and its potential, we connected with Orfium’s CEO Chris Mohoney. Read the full interview below and be sure to check out Orfium for yourself.
Tell us a little bit about your background and how Orfium came to be.
The idea for Orfium actually arose from a synthesis of smaller ideas we had while working in the industry. Previous to starting Orfium, I was a YouTube Content ID music administrator and represented about six million sound recordings and compositions, as well as managed a sync licensing library with about 400,000 recordings. I am also a computer programmer and received my bachelors and masters in Accounting from the University of San Diego. My partner Drew and I met as undergrads at USD, and after we graduated he went on to law school in Los Angeles at Pepperdine Law and studied intellectual property, licensing, and music rights.
While performing my previous work I had many moments where my general thought pattern progressed from “this is silly / overcomplicated / unjust” to “this would be easier / better if it instead worked like this” to “I’m sure someone already thought of this and will fix it soon.” The subjects of these thoughts often surrounded the flow of royalties, management of music rights, and the fragmentation of music services and their functions. As time went on I saw the problems only getting worse as I heard about the lack of royalties trickling down, mass deletions and copyright wars, and all these new services popping up that only offered some functionalities while missing others that are essential to the big picture. All this was going on while so many companies were distracted from solving the problems by their fixations on short-term profits.
Finally Drew and I decided that we were going to create a complete, one-stop solution for artists to promote and monetize their music and a place for fans to discover, listen, and share great music. The general idea was to elegantly synthesize every essential feature that a music platform must have and build it on top of a back-end that had the power to manage the complexity of music rights and generate every type of digital royalty possible to artists. We scrounged together all of the resources and turned our apartments into our offices and got to work. After two years of grinding it out going from prototype to beta to version 1.0, which just launched in July, we are still grinding from our apartment offices serving 40,000 artists with 130,000 songs on Orfium.
often artists get the short end of the stick, yet they are the ones who create the industry’s assets from thin-air.
What makes Orfium different than any other streaming platform?
The most significant difference between Orfium and any other streaming platform is actually non-material, and that is our philosophy. We believe artists should be given the front seat and always have total control and flexibility with how their music is consumed and distributed. So often artists get the short end of the stick, yet they are the ones who create the industry’s assets from thin-air. People often forget that without artists there is no music industry however without everyone else it would only be a smaller industry. Next after the artists comes the listeners because they feed the industry. So our aim is to provide them with a system to help them discover, share, and enjoy music they like. The job of everyone else is essentially to strengthen the relationship between those two. Our primary goal is to shift the power back to the artists, give them complete freedom, and create the most efficient marketplace for music.
Another key difference is that Orfium, unlike any other platform, is both a music social network and a powerful rights management and monetization platform. Orfium offers unlimited free hosting, and artists can upload directly and opt-in or out of every possible digital music monetization service at any time through one simple upload portal. Orfium offers retail, licensing, YouTube monetization, remix monetization, distribution, and publishing. Artists determine whether a track will be free or premium, there are never any upfront costs or long-term contracts, and all of our services are offered on a non-exclusive basis. Our feeling is that we should only make money if we are able to add true value for artists and that if we do a great job artists will want to continue to use our services without the need for a contract.
One of the biggest things that stands out about the platform is that you promise to pass 80% of revenue to the artists and rights holders. How can you afford to do so while turning a profit?
If you look at other general marketplace platforms such as Amazon or EBay, they keep around 10-15% of revenue, and both of these companies are tremendously successful and have not had a problem scaling. Storing and streaming music requires more bandwidth and therefore costs a bit more to operate, which is why we must charge slightly more, but overall we think that 20% is a number that will allow us to cover our expenses as well as invest in new features and services sustainably. Additionally, because we offer multiple monetization services, the potential revenue we could generate from each song is greater, which gives us more opportunity to offset costs.
The key to the remix monetization service is that the interests of the parties involved do not conflict, and that there is a solution that allows both parties to be satisfied.
Another standout features is the ability to host remixes that pay the original rightsholder with the option to also share profits with the remixer. This seems like the perfect solution for remixes and bootlegs. How has it worked so far?
The key to the remix monetization service is that the interests of the parties involved do not conflict, and that there is a solution that allows both parties to be satisfied. The remixer’s primary interest is getting the attention of new fans, while the established rights-holder’s primary interest is getting paid. The derivative works monetization service is largely based on YouTube’s model, and it allows us to abstract the monetization rights of a track and assign it to the legal rights-holder. With this power the rightsholder has the ability to monetize the remix and even specify a split to share in order to support the remixer. Of course the rightsholder also has the ability to take the content down but our mission is to make the monetization more worthwhile than doing that.
We are still in an infant stage considering we recently launched but all of the necessary foundation is in place to have significant revenue potential for rightsholders and create a win-win situation; in most instances, remixers would get to keep their songs up on the platform and rights-holders will get paid. So far, the vast majority of the content on Orfium is original music from independent artists and labels, but for the few remixes that have been uploaded, the remixing artists have been very cooperative with pro-actively tagging the original track on their remixes and as our audience grows these will generate significant revenue to the rightsholders.
DJ Mixes are another area of interest. SoundCloud’s removal of mixes has been well documented. The industry is still looking for a new home to host and listen to mixes. Do you have a solution in place?
Yes, we are absolutely aware of this need and working on creating a better solution. Orfium already supports remixes and covers, and we are currently developing the functionality to handle DJ sets/live mixes as well as Podcasts. Both of these features are current priorities and will be ready very soon, definitely before the end of the year.
One of the areas you are looking to tackle is music licensing. How are you simplifying this process and making it easier for artists?
The way our sync licenses work that is different from other platforms is that rather than over-complicating the licenses by listing out all the possible use cases, we simply base the licenses on the dollar amount of the production budget and lifetime revenue of the creative project in which the licenses will be used. This simplifies the licensing contracts for all parties and assures the artists will make a reasonable percentage, whereas other platforms being overcomplicated create loop holes that allow music to be licensed for national TV advertisements for a fraction of the amount that should be paid to the artist. Also no other licensing platform has this integrated in a consumer facing interface and we think by doing so it will bring a lot of awareness to the existence of these licenses to people who otherwise wouldn’t know how to legally use music in the background of a video or other creative work.
Artists can set their own prices but the default price for the standard license is $30 and allows for use in projects with production budgets and lifetime revenues of $2,000 or less. The extended licenses has a default price of $150 and increases the thresholds to $10,000. The premium license has a default price of $500 and increases the thresholds to $50,000. For any larger project the buyer would be directed to contact the artist/songwriter’s publisher. This guarantees that the artist will get paid no less than 1% of the production budget and lifetime revenue of the project in which the song is used and also ensures that it complements and does not compete with bigger publishing opportunities since it really just automates the smaller deals that publishers wouldn’t waste their time negotiating.
YouTube has always been a bit of a grey area for music hosting with a ton of channels just re-uploading copyrighted work. Do you see it becoming a legitimate channel for music streaming and monetization?
The two main issues with YouTube are duplication of content and the payout split is probably not sustainable. However, YouTube has been a major driver of progress in digital rights management. YouTube has created the best system to date to allow rights holders to be able to monetize their content from unauthorized uploads. This serves two purposes; it allows the user videos to stay live on the site and also compensates the rights-holders. It is far from a perfect system, and it would be much more ideal if only the content creators and rights-holders uploaded content, with everyone else reposting and making playlists (which is how we have set up Orfium). That being said, the video advertisements that run on claimed videos do generate significant money, and if YouTube reduces the 45% cut they take and finds a way to better organize duplicate content then I think a lot of people would be very happy.
This is actually one of the easiest passive revenue sources that most independent artists outside of Orfium aren’t utilizing enough.
You offer a YouTube monetization option. Can you elaborate on how this works and why it may be of interest to artists?
This is actually one of the easiest passive revenue sources that most independent artists outside of Orfium aren’t utilizing enough. Orfium offers YouTube Content ID services, through which we can fingerprint music and have all videos on YouTube scanned and detect the ones that contain the music, and when a match is found advertisements start showing around those videos which generates significant Google money for the song owner.
It’s a great service because the uploaders can to keep their videos live on YouTube while the artists gets paid the ad revenue creating a win-win situation. We also report the matches to the artist so they can view where their music is being used. One of the main advantages is that since YouTube already has massive viewership the money potential is already realized, there is no need to drive traffic or promote anything, all the artists have to do is submit their music and the checks will start flowing.
A lot of people are already tied to streaming platforms like SoundCloud, Spotify and Apple Music. How do you intend to get them to make the switch?
Our main focus right now is getting as much music on Orfium as possible because consumers will follow the content. It is the artists who need to lead the way and support better systems and the consumers will quickly follow. We know there is an immediate time-commitment to getting set up, but it is free with long-term benefits and there are also advantages of being an early adapter. Since, all of our services are non-exclusive artists can continue to use existing services while they also add their music to Orfium without the fear of missing out elsewhere. By coming on board early while there is less competition it is easier to get recognized and be seen in recommendations and on the top charts on the homepage. Also the YouTube Content ID service by itself makes it immediately worthwhile to join and start earning money right away.
Each of the other platforms has its flaws, SoundCloud’s playback and discovery interface is much more difficult to use than the others while the others don’t allow the free music made SoundCloud grow so large. On Orfium we support all types of music since we leave the choice up to the artist whether or not they want to sell or make their music available for free. We have spent a lot of time thinking of how to elegantly integrate every useful function for digital music, and if is currently not on Orfium, it will be soon. We have about two years worth of development planned for adding new features and improving the existing ones. Orfium really is about creating a complete solution, and right now we just need to get the word that we are here and we are doing this.
The good news is there are already a lot of artists and labels coming to us wanting to plug into Orfium, and we are currently finalizing an integration for a few of the bigger independent labels including Spinnin’ Records.
Artist buy-in is essential in the success of any streaming platform. What are you doing to get artists to use your platform? Have you been able to get any big names on Orfium?
We aim to be attractive to artists by offering the most freedom and flexibility of any other platform, and by offering every single digital monetization service possible through one, simple upload portal. Like I said above, it will require the artists to take the first step, but we hope they recognize and appreciate that we have built empowering tools to help them be successful, less dependent, and the opportunity to participate in the most efficient marketplace for music. The good news is there are already a lot of artists and labels coming to us wanting to plug into Orfium, and we are currently finalizing an integration for a few of the bigger independent labels including Spinnin’ Records.
What’s the biggest challenge you’ve faced so far?
In order to properly support music rights management, it requires a very complex underlying architecture. Behind the scenes there are a lot of moving parts and automated processes running that makes everything work. Every feature we roll out requires a tremendous amount of thought and care in order to present it elegantly in the interface. We want to keep a simple and intuitive appearance without sacrificing underlying functionality. To make this possible we had to design a neat and tidy interface that is capable of unfolding to reveal the more complex advanced functionalities. I think our team has done a great job so far especially considering the magnitude of the challenge and the small size of our team. We still have a lot of developments in the works and we know what we have to do, it just takes time. Finding simplicity in complexity is an ongoing challenge but at the moment our temporary challenge is simply getting the word out that we exist and are doing something to fix the industry and we are in it for the long haul.
For more on how Orfium compares to other platforms check out the image below.
