Written evidence submitted by SoundSurf
This report summarises SoundSurf’s approach to fix the following areas in the music industry (1) undervalued content, (2) unequable distribution of payments, and (3) hierarchical music discovery.
Key Highlights
Established in 2017 by Kerr Wilson, SoundSurf is the first combined video and audio music platform enabling content providers (“Stages”) and their underlying artists to generate 85% of revenues through a Stage subscription model. On both our website and mobile app, paying subscribers gain access to Stage’s exclusive live streams, video content (with the associated audio for offline listening), and merchandise, with the proceeds being distributed fairly among all parties involved.
The market wants SoundSurf. Artists are currently receiving as little as £0.00017 per stream. As consumers becoming increasingly aware of the mismatch in revenue distributions, SoundSurf seeks to rectify this problem by delivering a return of up to 100x the market rate and become the ethical choice for consumers of music.
SoundSurf successfully achieved a Scottish Enterprise Smart Grant between 2019-20, receiving £93,994 which was match funded to £134,277 - equipping SoundSurf to build it’s internal tech team and develop from it’s MVP.
Having secured its first international partner, who have over 124M views and 340k subscribers on YouTube, SoundSurf is looking to further expand its partnership programme and product offering throughout North America, Europe and Latin America, while establishing itself as a key player in the online music streaming industry.
Market Opportunity
The online music industry plays host to one of the most exciting and fastest growing markets in the world. According to the RIAA 2019 report, revenues from streaming services grew nearly 20% in 2019 to $8.8 billion - accounting for 79.5% of all recorded music revenues (TechCrunch.com). Streaming companies like Spotify and Apple Music have demonstrated the success of subscription models as monthly fees become the norm for compensating digital content online. But this is at the cost of increasingly devalued content, with artists suffering. Spotify pays artists less than £0.004 per play and artists need 400,000 YouTube views to earn a UK day’s minimum wage.
As we start to see solutions for companies compensating creators online (i.e. Patreon), we find ourselves stuck between the ease of streaming services, and the introduction of individual subscription models with no digital focus.
SoundSurf is perfectly positioned to realign the revenue distribution within the music industry to a more ethical outcome. With our innovative subscription infrastructure, internal video and audio uploader/players, video focussed music discovery, and all encompassing functionalities, we have created a service for content creators to reap the rewards of monthly payments directly from their fans. We have identified our initial partners who create a consistent flow of live music videos, with potential to
Revenue: $8.8 Billion
Active Subscribers: 400 Million
Subscriber Growth YoY: 32%
Company Overview
SoundSurf is a music-tech start-up entering the market as the first combined video and audio music platform that enables partners to set up their own subscription models.
SoundSurf’s function rich platform enables ‘Stages’ - a SoundSurf term meaning creators of live music videos - to set up their own subscription model and distribute revenues directly to the featured artists. Paying subscribers unlock: exclusive content (i.e. videos, live streamed shows, podcasts), the audio featured in each video for offline streaming, and an ad free user experience. As well as direct revenue gain, artist’s also receive direct exposure by haven’t their SoundSurf profile tagged to each video, where inquisitive users can find their back catalogue of music/merchandise (to purchase), upcoming gigs, live streams, and general communications.
This model has attracted interest from several major YouTube channels, with Los Angeles based production company, Jam in the Van – boasting over 124m views and 340k subscribers on YouTube - engaged as our first partner. The revenue forecast predicts that they will exceed their YouTube revenues within the first 2 months of launching on SoundSurf, while having the capability to automatically split that revenue with their featured artists.
The SoundSurf team are excited about the potential for disruption within the music industry and are encouraged by a positive response from the target market beyond Jam in the Van.
The Product
The team at SoundSurf have created a fully developed Website and App, which has undergone an extensive pilot testing period with its first partner - Jam in the Van.
SoundSurf is entering the video streaming market with new functionalities that re-define how people discover and consume music, while implementing a business model with artists welfare at the forefront of its operations.
To understand the fundamental logistics of the SoundSurf platform, it is necessary to outline the 3 user types and their purposes:
Listeners - the primary goal is finding and consuming music. They can also be players on the site by building a following to share content with.
Artists - given a customisable profile page, artists can use their SoundSurf profile to host all their Singles/EPs/Albums, host videos with the sellable audio files, sell merchandise, post upcoming gigs, and put on ticketed live streaming shows. They can also collaborate, and feature, on Stage profiles as a form of promotion and revenue generation.
Stages - Our content partners drive instantaneous value on SoundSurf through quality content and user acquisition. Stages - a SoundSurf term for companies producing live music videos - work with multiple artists and produce videos weekly, if not daily. This continuous flow of high quality content is considerably valuable and made even more so with some added features. We allow each of these account types to set up their own monthly subscription (at a price set by them) , for paying subscribers to get: exclusive/pre-released content, the audio from each video (for offline streaming), unique content i.e. podcasts & live streams, and an ad free user experience. The revenue generated can be split automatically with their featured artists by tagging their profile.
Business Model
SoundSurf generates a predictable revenue stream by taking 15% from each Stage’s monthly subscription. We anticipate each Stage’s subscription will be strategically priced at a level significantly below the market norm (£9.99/month) and divided between the Stage and Artist (split customisable). The pilot test has been set at $4.99/mo but each subsequent partner is able to determine their own price. Processing fees are passed onto paying consumers.
Market Growth
A new report published by Counterpoint Research predicts that the number of music streaming subscriptions globally will exceed 450 million by the end of 2020, which would be more than a 25% year-on-year increase.
Trends
Subscription revenues are expected to grow as we see the download-to-own revenues decline. Refer to the graph below representing the Streaming Market Growth - taking the US market as an insight.
Competitive Landscape
Competitive Analysis
Partnership Overview
Team
Advisory Team
Strategy
Strategy
