Considering how fast streaming companies like Soundcloud and Spotify have become a focal point in the music industry it can easy to forget that this corner of the entertainment business is still very much in its infancy. We haven’t had major streaming services for even a decade yet, but already the market has changed several times over, and it will no doubt undergo several more evolutions during our lifetime. It’s like the old saying goes, “If you don’t like the way the entertainment business is working just wait five minutes and there will be a new system in place.”
Orfium, one of the newest competitors to enter the streaming market, understands that this industry niche is in a constant state of flux. They are currently trying to win over subscribers with a marketing budget far smaller than that of Spotify or Apple Music, and so far they are finding a lot of success. Instead of subscribing to the belief that streaming is already the savior of the music business the team at Orfium chooses to look for ways to make the streaming age as beneficial for artists as it is for fans. We’ve all read about the discrepancy between streaming royalties and plays, and while Orfium does not have a full-proof solution they are constantly searching for ways to improve their business model. This, coupled with their undeniable passion to see up and coming talent make it in this turbulent world, has created a recipe for longterm success that has only just begun.
I recently had the opportunity to speak with Orfium’s Chris Mohoney and Drew Delis about their creation and the way it fits into the current streaming community. Their answers will not only enlighten you as to the realities of streaming today, but they may even convince you to join their platform. Enjoy.
We should probably start with the most obvious question: Why does the world need another streaming music platform?
The answer is the same reason why the world needed another telephone when the smartphone arrived; existing solutions had a limited scope of utility and flexibility. In the case of a smartphone, it made a lot of sense to integrate a phone, rolodex, caller ID, pager, email client, calendar, task list, and internet browser into a single integrated communication device with configurable personal settings. Likewise it makes sense for the next generation music platform to integrate streaming, social, downloads, events, distribution, rights management, and licensing functionalities into a single system with configurable personal settings controlled by artists. Of course all of this would have to be presented elegantly and intuitively in a simple consumer friendly interface, which is what Orfium strives to do.
Spotify, SoundCloud, and Apple Music all serve different purposes which don’t make sense to be fragmented. SoundCloud, for example, allows artists to upload directly but only if they give their music away for free. Spotify and Apple Music require artists to go through distributors and they do not accept free releases. For a consumer, it creates a frustrating scenario when trying to listen to both types of music on a single playlist. SoundCloud also serves as a social network for artists to engage with each other and their fans whereas the others lack this functionality, however on the other hand, SoundCloud lacks as a consumer interface for pure listening. Orfium is the only solution that offers all of the functionality of the alternative platforms combined. We also built it on top of a rights management back-end system which gives us the flexibility to properly license remixes and DJ sets/live mixes so we won’t suffer the issues of SoundCloud. Also, unlike YouTube and SoundCloud, the sound recordings on Orfium are not duplicated since we use a tag-based system to credit each contributing party, which makes our library much better organized for both discovery purposes and rights management.
Where did the idea for Orfium originate?
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.
A major influence for starting Orfium came from experiencing YouTube’s more elegant solution to managing music copyrights while watching SoundCloud struggle in this regard. As this unfolded Drew and I had many conversations surrounding the issues with 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 and all these new services popping up either ignored these problems completely or only addressed a small set of them while missing others that are essential to the big picture.
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 we could come up with 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 42,000 artists with 140,000 songs on Orfium.
I’m always curious where streaming services like yours get there start. Who were the first artists to sign up? Did you have any prior relationship with them? If not, did you ask how they found you?
A friend of ours who initially was helping us early on formulate the concept, but ended up primarily focusing on his musical career, was the first to upload and test the site. He was part of a duo named Bad Vision and now has a solo project called AWAY. He referred a few of his artist friends to the platform to help with testing the beta, and from there we started seeing more artists flow in both via word of mouth and some of our own direct reach out efforts. Some of the first artists to join who we did not have any first or second degree relationship with were Niteppl, The J Conspiracy, and Emma Longard. Niteppl is a duo from San Francisco who has consistently been at the top of our charts to this day. The J Conspiracy and Emma Longard are both from Germany and The J Conspiracy actually runs a blog as well where they have documented their experience with Orfium.
Entering the digital marketplace can be incredibly difficult. What methods of promotion have worked best for you thus far?
It is certainly difficult and the hardest part is getting the initial start, which involved leveraging relationships we already had with friends in the industry and directly reaching out to independent artists and labels. However once we started to get going traffic began flowing from Twitter, Facebook, and Instagram, where we also have social profiles. Now we are also seeing organic search traffic from Google becoming more and more significant and we are grateful to have online media sources like you picking up our story as well.
A lot of people seem to believe the streaming space is already a bit overcrowded. Are they mistaken?
Yes and No. In the sense that there are many streaming platforms that offer nothing new in comparison to others, yes that part of the space is overcrowded and becoming obsolete. However Orfium is completely different because it is not just a streaming service as a smartphone is not just a phone.
I had been watching new streaming services pop up for the past few years, each time wondering if they were going to address any new problems that needed solving, and in almost every case they were just another copy, often worse copies, of already existing systems. I think it is just a result of entrepreneurs entering the hyped up space blinded by pure profit motives as they seek a piece of the action, and with such a shallow purpose the best they can do is copy yesterday’s successes. Likewise I think musicians notice this in aspiring musicians who are in it for the fame and money and that limits them to copying yesterday’s productions that are popular today rather than contributing the new sounds that will be popular tomorrow. That said, I don’t think there is anything wrong with being inspired by someone else’s creation, but you have to build on it and contribute something new to add and I think that is something that people have a harder time doing when they don’t have the right purpose.
Do albums, playlists, or singles ultimately rule the streaming world?
Well in one sense single tracks are the primary content source since albums and playlists are collections at the very least. However I think a complete album that tells a story from beginning to end in well-thought sequence of tracks with fluid transitions is one of the greatest forms of musical art second only to a live performance of the same. It is however rare to find since it is not only a great challenge to produce such a work, but also more may be required to captivate an audience today who have grown short of attention in a fast-paced technological environment. It is far more common to find albums containing only a few hits with a less interesting remainder in an insignificant sequence. Playlists on the other hand play the role of a catalyst for music discovery as those with good tastes in music and a savvy ability to find it will attract a wide audience to their playlists. Others will use playlists to simply share music within their closer group of friends. Also podcasts and sets should not be neglected as these are also important catalysts for discovery like playlists, and like a great album a great set can also take the listener on a musical journey. We do have planned support coming soon for podcasts and DJ sets, and further in the future there will be music video support as well.
Therefore every content type plays a different role by providing a unique experience. Some musical works are common like quartz, others are rare and sought after like gold, and though bite-sized content might become more common due to impatient demand, the most powerful long-form musical works will remain at the pinnacle of the art.
How do you ensure artists are properly compensated for their work while keeping costs to consumers low enough that they will want to use your platform?
We pay out 80% to artists, and just to clarify this is based on the retail price. Some people get confused when they are told they are getting 90-100% of royalties from their distributor, which is actually just based on what the distributor collects from the retail site, not what the end consumer actually paid for their music. Usually retail platforms pay out around only 70% to the distributors / labels who then pay some of that downstream to the artists, and licensing platforms often pay far less often between 35-50%. I mention licensing because we offer many more monetization services to artists than just streaming and related retail services so the earnings potential is much higher with us.
For consumers the default the prices we offer are the same they find elsewhere however we do give artists the option to set their own prices as well.
For those readers who have yet to hop on the streaming bandwagon, why is Orfium a service they should use over your competition?
There is an enormous amount of technology behind the platform which we have been able to build with very limited resources where others have failed with tons of resources, and I think this should be a strong indicator to anyone about the trajectory we are on. Most of the other platforms have already been around for 5-10 years and they all took a lot of time to mature. We are just getting started, but the greatest challenges are behind us. The seed has sprouted and it is only a matter of time now for Orfium’s potential to be fully realized.
In a perfect world, where is Orfium one year from today?
I think it is reasonably possible that we could have around 1 million to 3 million songs by 500,000 to 1 million artists. I certainly expect that we will have a mobile app, though our web version is currently optimized for mobile browsers. Rights management and licensing royalties will be flowing and steadily increasing each month operating as a well-oiled machine, and we will probably be shifting our focus more heavily towards scaling up the consumer operations including retail, streaming, and radio.
How do you feel about the state of the music business today? You’re obviously passionate about this world, but there is a lot of media talk about the industry being worse off than ever before.
I think it is a lot like the rest of the world, tons of potential, but also a lot of limiting beliefs still holding us back. It is technologically and informationally greater than it has ever been, artistically and culturally more diverse, yet to a large degree the same fundamental human weakness of mind still exist that have always existed. What technology can do is eliminate barriers and provide everyone with many more choices, and anyone who has studied economics knows that is a good thing for all except monopolists, however it is still up the individuals to consciously strive to make the right choices and encourage and support others doing the same.
Where can people go to learn more about Orfium and how you’re changing the industry?