WHAT: Audiam, a startup that helps artists find and monetize their music on YouTube, has raised $500,000 from angel investors including TuneSat CEO Scott Schreer and COO Chris Woods, PTC Advisors’ Tom Cohen and entrepreneur Jonathan Siegel. Audiam’s business model and technology are based on finding YouTube videos that use an artist’s music and claiming it on behalf of the artist so that ads can be placed against the clips. In exchange, Audiam takes a 25% cut of the ad revenue placed on the videos it finds. Audiam can also manage artists’ own YouTube videos, passing 100% of all ad revenue for those videos back to the artist.
WHY: Only about half of the estimated 30 billion monthly YouTube video views using licensed music have ads placed against them, according to Audiam founder Jeff Price. The remainder represents an opportunity to generate an additional $700 million-$1.2 billion a year for rights holders, Price estimates. However, many small, independent artists don’t have direct licensing deals with YouTube in order to start claiming their works within the framework of the company’s Content ID platform. Audiam does, and it can use its license to act on behalf of these artists. “There’s a real need from independent composers like myself who don’t have a Sony or a Universal to start monetizing videos that use my music on YouTube,” Woods says. The fledgling company, which started a beta service in Canada in June, launched stateside in July. More than 1,000 publishers, labels and artists have signed up, including Jason Mraz.
WHO: Price and co-founder Peter Wells are applying the same formula they used in 2006 to launch TuneCore, which shook up digital music distribution by giving artists direct access to coveted shelf space in the iTunes store and other online retailers. Though the two were unceremoniously ousted in 2012, Wells and Price still have considerable goodwill within the artist community. That will give Audiam a competitive leg up. “Jeff is transparent and honest,” says Vince Schultz, who handles publishing rights for Bill Silva Entertainment, which manages Mraz and other acts. “That was the primary basis of our decision to go with Audiam.” Audiam is putting its financing to use, hiring David Willen, former chief technology officer for TuneCore and Barnes & Noble, as its CTO, as well as former YouTube staffers Michael Gavigan and Bryan Hoffman as directors of artist licensing, royalties and administration.
IF: Audiam’s success depends on two things. The first is technology that can identify usage of copyrighted material better or faster than YouTube’s Content ID, which hasn’t been a watertight net for flagging all copyrighted music, especially when it comes to covers. Within a few weeks, Audiam’s filters identified thousands of videos that Content ID previously had not flagged and began turning on the ads, collecting more than $50,000 for its rights holders so far. Second, YouTube’s direct licensing is limited to a handful of partners, largely because it doesn’t want Content ID to be exposed to the masses. In the unlikely event that YouTube opens up Content ID to all comers on a self-serve basis, Audiam’s service would be less valuable. -Alex Pham