How TikTok Changed Sync Licensing (and What Cipher Music is Doing About It)

Why are most brands still stuck licensing royalty-free tracks nobody recognizes while short-form content runs on music? 

This week, we're sharing a conversation Jade Prieboy had at SXSW with Ferris Bseiso, founder of Cipher Music, breaking down how TikTok rewrote the economics of sync licensing, why major brands are getting hit with eight-figure copyright lawsuits over Instagram posts, and how Cipher is creating a volume-driven sync market designed specifically for the creator economy.

Also on this episode, Jade and Dmitri swap takeaways from Music Biz in Atlanta and Mo Forum in New York. They dig into AI voice cloning and the concept of style laundering, Andrea Gleason's provocative idea about generative AI and streaming platforms, the rise of institutional catalog investment from companies like Apollo and Primary Wave, and what the KISS hologram deal signals about the future of artist IP.

Music, technology, and internet culture are colliding in real time. This episode is right in the middle of it.

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Episode Transcript

Machine transcribed

Conference RoundUp

Jade: Hey everybody. Instead of our regular news roundup, we're gonna do something a little different. We're gonna round up our travels from MusicBiz and Mo Forum. Dmitri traveled to both over the last two weeks. real excited to hear your takes, Dmitri. Um, what did you pick up on at MusicBiz?

Dmitri: Oh, Jade, uh, MusicBiz was a blast.

Um, you know, it was in Atlanta again, and, it's funny, Jade, because I did a couple of panels and fireside chats and, and, and things like that. But I find that, like, every once in a while, everything I learn about the music industry, like, at that moment, is actually happening in the lobby , which is funny.

It's like the, the individual conversations you, you have. And, um, this is kind of ironic because the first thing I wanna share is something that I said about what somebody else said, but it was, you know, it's like the opposite of what we just said. But you know, I did a fireside chat with Blanco Brown, the, artist who blew up in 2019 when he did the "Get Up," which became this viral TikTok dance and song.

 and he, in, in the interview that I did with him on stage, he said that his response to the Breaking Rust fiasco, which is where he felt like an AI artist had basically trained on his voice and style without his permission and put out a song that everybody said, "This sounds like you." And then he went and...

I- we've talked about this on the, on the podcast before, but he went and did a cover song of the AI song, W- "Walk the Walk." Uh, no, that's not what it's called. It's the, it's the Breaking Rust song, um, "Walk My Walk." Now I can't even remember the name of the song. Anyway, at the end of that conversation with, towards the end, he said that his response to stopping that kind of stuff in the future was that he was gonna trademark his voice.

Which is exactly what Taylor Swift has said, publicly said that she's gonna do, too. So it'll be interesting to see if that's a thing you can do, because, you know, if two people's voices sound similar, it's very hard to tra- trademark voices. but, as he was talking about it, I was thinking about it, and I was thinking about What is, what is it that's actually happening in the market when people use somebody else's voice and style to create new music?

And I came up with this term style laundering.

Jade: Love it.

Dmitri: So it's like when, when AI like is using somebody else's style, not giving them, credit, not attributing it, it's usually the voice that's really in the mix. that's what they're doing. They're laundering the style. You're pushing the training data through a generative AI platform that hasn't been licensed like Suno, and all of a sudden it's my style.

Jade: Totally. And I, I've gone back and forth on what, how I really feel about this whole concept, um, the AI generative music and all that. And, What I've kind of landed on now is that like a human being influenced by another human going to see a drummer at a jazz club and being like, "I wanna play like that," and, and emulating their style and talking about that in interviews is one thing.

When it's a tech company that's doing that at scale, it changes the whole conversation and it makes it, it makes it a lot more, uh, necessary to kind of like, you know, create, guardrails for that kind of thing-

[00:02:43] Dmitri: Yeah

[00:02:43] Jade: ... so that, so that artists can get paid.

[00:02:45] Dmitri: Yeah. There's been a whole conversation about, you know, what about the AI creators?

This is creating access for them to create music for the first time. Don't they deserve to be creative too? Do you have to have training? Do you have to have access to resources, et cetera, studios, musical instruments, lessons, whatever, in order to become creative? Obviously not. But the real issue is what are you starting with?

What does it, you know, what does it start with and, and whose creativity are you starting with? And are you giving, getting permission, giving permission, licensing, paying, et cetera. So, but, you know, voice actually popped up a lot more in my conversations. Um, I, I was, uh, again, in the lobby with Michael Polczynski, who, who has been on the podcast in the past.

He's with VoiceSwap now, which is a company that is doing ethical voice, AI generation, uh, where you can actually license your voice and then resell the use of your voice, or you can lic- you know, use somebody else's voice, ethically. Um, and I was thinking about what I talked about with Mike was imagine artists making their own voice clones and giving it a commercial application, which VoiceSwap is already doing.

But, so that's what it is. It's like for X amount of dollars you can license my voice for a song, right? And then I wondered, is there some legal way to use that similar to how Blanco Brown and Taylor Swift are talking about trademarking their voice? If there's a commercial application for your voice as AI, and then somebody else uses some other method to recreate the sound of your voice, could you somehow use that as a legal precedent to say, "Wait a second, I've either trademarked this AI..."

I don't know if you could patent AI of a single voice. Uh, I don't know if that's a... I, I talked to some lawyers. They said it's probably not a patent. But whatever it is, some, some way to sort of say, This is the AI voice that I say can be used, and I charge for it."

That way, when somebody else does something else with your voice without permission, you kind of have, like, that legal reference point. So I thought that was kind of a fun conversation with Mike, Pelczynski.

[00:04:38] Jade: It sounds like a way forward for sure. Maybe, you know, at least to start with, like, let's... We gotta start somewhere, and that seems like a, like a great place to start.

[00:04:45] Dmitri: Yeah. I have two more things that I picked up in the lobby. I'm sorry, Jade. It's all related to AI. I don't know why. It's on everybody's topics. Not that we're trying to talk about AI all the time, but I think we really are at a pivotal moment, and when we get to talking about the MoForm event that I attended in New York just a couple days ago, uh, there's some other really interesting AI stuff though.

But, here is a zinger that came from Andrea Gleason, the former CEO of TuneCore. She was like, "I've been wanting to tell the folks at Udio, 'You should just buy Tidal.'" So the idea there is the licenses that are coming through are talking about having a walled garden, meaning when you make a song using generative AI, you can't put it on the streaming services.

You can't necessarily put it on social media. It's just within, say, Udio, where you've licensed to mess around with a song, and then inside Udio, you can play it for other people. So-

[00:05:34] Jade: Stream it, send the links and stuff, yeah. Yeah.

[00:05:36] Dmitri: So it keeps it from being commercialized, being deepfaked, et cetera, like that.

But her idea of taking a streaming service that is a kind of respected streaming service but isn't... It's not as big as Spotify or Apple, um, and then saying, "Well, what if, if Udio owned Tidal, it's still within the walled garden, and they can then control all the attribution, the licensing, the royalties, et cetera."

So I thought that Andrea Gleason's brilliant to think of that idea.

[00:06:02] Jade: That's a great idea. I haven't heard anyone else say that or even suggest that or even think that that could be a solution. That, that's kind of interesting.

[00:06:09] Dmitri: I always think it's funny when amazing execs like Andrea leave a company, and then they can say a lot more, a lot more stuff in the, in the lobby of Music Biz.

But please, if you repeat that, credit it to her. It was her idea, not mine. Now, I do have an anonymous one that I came up with. somebody pointed out to me that if a generative AI song company would limit the number of reference songs for the style or the attribution that's being made, it just becomes a lot easier to address the issue of attribution.

There's all these, solutions that are emerging right now about how do you do attribution after the fact? Like, if, nothing's inside the, training data model, if there's nothing inside the model that shows what the sources were of everything, when you spit it out, you kinda don't know.

There's no metadata attached to it. But if you limited it to just two or three songs to say, "All right, you're allowed to reference artists with it, with-- and we haven't even created the attribution, but you can only reference two or three artists," then whatever comes out, you can say, "Okay, we can split this across those two or three artists or songwriters."

It'll still probably be more than two or three, even if somebody says, "Hey, I wanna do a mix of whatever, you know, Toots and the Maytals and Four Tet." Like, you wouldn't necessarily... There might be lots of songwriters, there might be producers that get credit. So by the time you add up... Or if you, you know, obviously, uh, hip hop and R&B, a lot of those genres have multiple songwriters, producers that are getting credits.

All of a sudden, it'd still be 25 people, artists that have to somehow get attributed. But if you just do two or three songs, it's way easier than if you did, like, 20 songs or, and then, and then that, that turns into 20 more songs, and all of a sudden you have, like, 1,000 influencers. You'd never get the, the royalties paid back to, to the creator.

So I, I just thought, just that was a click for me of like, "Oh, limit it to two or three reference songs, and then attribution just becomes so much simpler."

[00:07:53] Jade: Definitely. I mean, every-- Yeah, people are trying to solve this at scale, but, like, I feel like do we need a strong starting place to kind of build some precedent around this stuff?

[00:08:00] Dmitri: Yeah.

[00:08:01] Jade: like you-- I mentioned before, like I've kind of flip-flopped on like how I feel about it, and my current feelings around it are, when Suno first launched, I was like messing around with it and I'm like, "This is cool. This is awesome." Now I like... I c- I kinda can't stand it. I'm like, "Okay, this hasn't..."

It evolved so quickly and then it kind of stagnated in like what it can do, like in terms of like the commercial generative stuff, and now I'm just, I'm back to playing my drum set like all the time. I'm like, "Hey, I can't do this." Do, do, do, do, do, do, do. So, I, I think that this, you know, I think it's going to...

These kind of technologies, just like social media did, like it forces artists to evolve. Artists are always evolving and, you know, reacting to, you know, what's happening in the world politically, what's happening, like, you know, all this kind of stuff. So I kind of think it's a... I don't know. Like we'll...

 obviously, uh, hindsight's 2020, but I think we might look back at this time and think, Oh, it's funny that we were all worried about that stuff, like at that time." That's kind of what I'm, where my head's at now.

[00:08:53] Dmitri: Wow, that's really relevant to the event that I went to at Mo Forum last week in New York.

 Mo Forum, A lot of people don't know about it 'cause it's an invitation-only event that the law firm Morrison Foerster puts on. They've been a partner with Music Tectonics last year. They're coming in this year, uh, at Music Tech Tonics as well, sponsoring our first ever VIP house called MoFo House, which is really exciting.

And I got a real taste of their network and what they're gonna bring to Tectonics this year because they brought in major catalog companies, people investing in big catalogs, major DSPs, and also really m- major labels, and really interesting people that are kind of on the front line of some of the, scale-up and, larger tech platform companies that are bringing a lot of interesting things and innovation.

There were, I don't know if we have time to talk about all of them Jade, but there were four... there were se- there were like two days of sessions, but there were four sessions that I had some kind of takeaways with. You know, I was really excited to see the one that featured, these large catalog companies like Apollo, Cord Music, Primary Wave.

Duety was also on that panel. And just hearing to the... All of those folks talk together. I mean, if you don't know, the, the first three, Apollo, Cord, Primary Wave, they're... Some people refer to them as publishers, but in a lot of ways they own the publishing rights. some of them buy recording rights as well.

They're like the larger investors. They're putting billions of dollars into song catalogs and then figuring out, you know, how to make those investments work. But by hearing them talk about it and the size of the catalogs, even thinking about the fact that Apollo has deployed like $5 billion in songs, it really gives you a sense that this is a mature institutional asset class.

It's a different way of thinking than record labels, because instead of thinking about hits, they're thinking about the longevity of a catalog as an asset much longer. You know, labels traditionally were looking for those big hits, and then over time they'd build up a catalog.

Their money came in those big booms of, of hits though a lot of times. But these companies aren't even trying to do that necessarily. Really, they're looking at the longevity of a fan. Um, and so it was really interesting to hear them talk about it, and think about... As we're talking at Music Tectonics about growing the value of music, these are the guys who are really thinking about, they're investing so much money into it that they really wanna see, see the growth there as well.

again, I don't know if I have time to talk about all this. I was excited to see Remington Scott from Hyperreal did a presentation. He's, he's like a, a computer-generated animation guy from Hollywood, um, worked on Spider-Man 2 and all sorts of other f- you know, famous animated films. But now this company Hyperreal he's working with is working with a lot of music, um, but other celebrities to do a form of motion capture that really allows you to get very realistic avatars and holograms, and he just did a great presentation.

I think what was nice for me is so much happened in the kinda like the VR space and for a little while in the gaming and holograms that looked like, okay, it did its thing. It didn't really take off. But really what's happening is the technology's getting better. We just... You know, as people in Music Tectonics have heard, the $300 million sale of KISS.

The KISS catalog didn't just include the songs, but it bundled in name, image, and likeness and biometric data, and that was kind of a... And, and actually Morrison Foerster was part of that deal. they negotiated on behalf of, KISS, the, the band. Um-

[00:12:10] Jade: That's cool.

[00:12:10] Dmitri: Just looking at what Looking at that catalog conversation right next to this kind of like hologram virtual performer conversation made me think a real shift is happening.

You know, Jade? Like-

[00:12:23] Jade: Oh, yeah

[00:12:23] Dmitri: ... those, those traditionally they're saying, "Okay, I can see where the streaming, the song catalog companies, I can see where the streaming's going. It's got a long life to it. I'll invest at that. I'll have a consistent amount coming." But if you think about a company that, like Pop House, which bought Kiss catalog, not only do they get the live performances, right?

So now, I mean, they're not live, they're holograms, but it's, it's the same people that did the ABBA Voyage thing. They actually now are getting, as song rights holders, owners, they're getting the ticket sales for all those virtual performances. So that could theoretically double the value of those catalogs if you get name, image, and likeness.

And nobody's talked about this, but what if avatar Kiss or hologram Kiss or whatever gets, gets to write future songs, AI-generated songs that are just solely trained on the Kiss catalog, and there'll be songs that get released 10 years from now, 20 years, 100 years from now. The people who own the rights to the songs, all of a sudden they have, they have a whole other revenue stream.

So I don't know. That's some of the stuff I heard at Mo Forum.

[00:13:28] Jade: That's awesome. And I think the, the longevity of the fan is a really interesting part of that too. Like for me, it's like I wanna play drums, uh, in Kiss and do that in VR, and maybe that's something I can do as a fan, right?

[00:13:40] Dmitri: Oh, yeah.

[00:13:41] Jade: All, all that kind of cool stuff.

Like-

[00:13:43] Dmitri: Oh, that's even-- I love that, Jade. That's, I didn't even think, I didn't put that into the mix, but you're right. Like when we're looking at this interactive, and we've just seen some announcements with Spotify licensing the ability to remix songs with Universal and, yeah, it's that interactive thing.

That's a whole, it's a whole other thing, right? It feels like it's no longer like a guitar hero where you're pretending to play music, but you're actually playing music with the band.

[00:14:05] Jade: Yeah. Could be, could be really cool.

[00:14:07] Dmitri: I love that,

[00:14:07] Jade: Jade. Well, well, great hearing your takeaways, Dmitri. this was awesome to have this conversation with you.

[00:14:12] Dmitri: Thanks, Jade.

[00:14:13] Jade: Thanks, Dmitri.

Faris Bseiso Interview

[00:00:00] Jade: Hello, welcome to the Music Tectonics Podcast. I'm Jade Pre boy and I'm here at South by Southwest with Ferris Bseiso of Cipher Music. Ferris. It's great have you here.

[00:00:12] Ferris: Appreciate you for having me. I've been a great few days and excited to chat more.

[00:00:16] Jade: Absolutely. Um, what has been your like take of South by Southwest so far?

Have you been having a good time in like a productive event?

[00:00:24] Ferris: Yeah, it's been my first South by, as a founder. My co-founder, Burke came last year for the first time as a company representing us, and he saw how much value there was in being here, how many music people came together for all kinds of events.

Not just, you know, hanging out, but you get a lot of serious, the business and a lot of relationships start developing here. And so because of that, you know, we had to come back as a team. We co-sponsored disco's event the other day, and that was a great way for us to reconnect with a lot of our favorite people in music and also start a lot more new relationships.

So overall, you know, it's been a great time. And even aside from that, I was fortunately able to pitch at South B in the entertainment and media category. So that was such a great experience. You know, I got a one minute speed pitch within the category, and then they picked me as the category winner for a one minute speed pitch in front of.

Y Combinator President Gary Tan. So a bunch of cool experiences that I don't think I would've gotten many other places other than South by so grateful to be here on all fronts, you know, music wise, tech wise, and all other sites.

[00:01:30] Jade: Awesome, awesome. Yeah. Congratulations. That sounds, that sounds epic. yeah, so, so Cipher music, tell me a little bit about what you're building.

[00:01:36] Ferris: Yep. So we double ourselves as the legal library of trending sounds specifically for brands where. A marketplace or a brokerage of songs for usage and social media. You know, advertising these days is dominated on social media. The creator economy is infused with brands and advertisers now all over the internet with hundreds of billions of dollars spent.

And what makes this opportunity unique for the music industry is that 85% of short form content, you know, tiktoks, Instagram reels, YouTube shorts, they. All use music and copyrighted music specifically in their content from normal content creators, influencers. And in order for your content to feel native, in order for your content to really land with the users, your customers you're trying to reach, you need to be using copyrighted music.

And unfortunately, that infrastructure just hasn't been there. And that's what we're building. That's what we've built so far, uh, with. Th our company and to this date, we've signed agreements and partnerships with over 25 publishers and labels to get their music available to a library for brands to use.

And we've started onboarding our first few brands to our subscription for the first time. So it's an exciting inflection point in our company now as we start bringing kind of music to the social and creator economies.

[00:02:58] Jade: Very cool. What was kind of the reason for, you know, going down this route of, uh, creating a platform for, for brands and artists to leverage music?

[00:03:06] Ferris: So it began in 2024 when my co-founder and I were in grad school. We had came together as part of the startup program we were in, and we had looked into a bunch of opportunity areas and we started really digging into sync. And seeing where the opportunities in sync are. And at that time, there were a bunch of headline lawsuits that had started coming down on a bunch of different industries.

At the time, it was 14 different NBA teams, Chili's, Johnson and Johnson, even the Marriott, for 140 million. What they all had in common is they were all being sued for their use of music on social media and with a maximum fine of 150 grand per video. Those. Violations add up really quickly and they can rack up very significant tabs.

So I saw that happening. And then on the other side, I looked at how music is being used on TikTok. You know, why are brands trying to tap into music so much? Like why was the Marriott using music in 900 videos for that crazy eight figure maximum penalty? And. You know, like I said before, it really showed that TikTok, especially as an app, it started out as musically, it was a music app.

So the algorithm is music driven. The content is very music driven. Trends, dances, memes, any kind of content format starts from the music, which is very different to how content used to be on or. Still is, I guess, on YouTube and any other long form platforms, you know, in long form. Music is very much just background noise.

It's kind of what Muzak always represented in the sync world. And so the focus is much more on the creator and what they're saying, what they're doing, what kind of pranks they're doing, whereas in short form music has to come first. And that's why brands are so desperate to tap into it. And the biggest example I can think of to really bring this full circle and why I saw such an opportunity here is um, tiktoks Commercial Music Library.

So currently if you're an artist, your only real option if you want that kind of distribution and reach for your songs is to put it on their CML. And Nikki Yuri back in 2022 was a great example of this. You know, his song Sunroof was a big hit because of how viral it went on TikTok. And so he put it on tiktoks Commercial Music Library, their CML, and made it free for brands to use.

So four years later, or not even that long after. There were 8 million videos made in total, and out of those 8 million made with that song sunroof, 2 million of them were made by brands. So when I saw those lawsuits and I saw 2 million brands using sunroof for free, the rhetorical question I started asking myself is, you know, how many of those brands had a couple hundred bucks?

That's now your opportunity there as a rights holder, as an artist to capitalize on the virality of your song. There's now a volume in sync. That didn't exist before because of short form content and because of the way it's used in social media. So those, all those forces together, you know, the enforcement that's needed for your IP to protect it, but also the distribution that you can get as an artist, it's a very unique opportunity that we saw.

So that was a big part of the thesis behind it. And then to really validate that this was an opportunity. I then looked at 30 different companies Instagram accounts, and I wanted to see, okay, what are they using right now? Because again, music is mandatory. So I would sit there and I would look at 10 videos from each of these brands.

So I looked at 300 videos total in the space of a couple hours, and I Shazamed all of them. And without fail, all these brands were using royalty free music. It was from companies like Epidemic Sound. Art list and many other like that. And that became a light bulb moment for me that it seems very intuitive.

It seems very clear to me that these companies are only using these libraries because they have no other option and they have no choice. And they're worried about the legal implications because they don't wanna get sued for, you know, eight or nine figures. And that really is. Who labels are competing with for a new revenue stream.

So we took all those forces together and we thought this is an opportunity to unlock revenue for the sync licensing industry, to unlock revenue for artists, and then also for brands to boost engagement on their content and to make their content more culturally relevant and to help them kind of build community with all of their followers.

So it's a long, very long-winded answer on the thesis and how we got here.

[00:07:27] Jade: No, that's that's fantastic. Thanks for those details. It sounds like, you know, before you guys came into the picture, it was really risky territory if they wanted to use commercial music, which they obviously do. 'cause like you're saying like short form content is driven by music, and of course brands want to have viral videos just like creators do.

 and that the landscape kind of before you guys came into the picture was like, you know, using the modern version of what Musak used to be. You know, like just so that's really, really interesting. thanks for sharing all that. have you felt like validated by that thesis? Like as you've been working on this for how, I guess, how long have you been working on it and, how have you validated your thesis like so far?

[00:08:06] Ferris: So we had two different, I would say, validation points that really indicated to us we were onto something. The first was, getting started. Obviously we needed. We needed to convince some rights holder that there was an opportunity here while we didn't really have much to go on. And so my co-founders and I, we spent a month reaching out to every social media manager we could on LinkedIn and cut and manufacturing a wait list.

And we told them, you know, we could get you TikTok songs for under a thousand bucks. Would you be interested in opting in? And so we took. All those LinkedIn acceptances as validation, as initially validation that, okay, there's some kind of interest in what we're doing. And based on that, we started then shopping this list around like, look, all these brands that are connecting with us, they, they may not have been responding, but we took that as there's on some very surface level interest in what we're doing.

And we went around different rights holders and eventually. We started planning around the Super Bowl. We knew that the Super Bowl is obviously the Super Bowl in advertising quite literally. And so there is some kind of opportunity to at least service a brand who just wants a quick wins on social media.

And so we asked our rights holders that we had relationships with to give us any sports themed songs. Just to fit the vibe of a Super Bowl, and we managed to pull together a playlist of 10 songs. So we had a very basic website put up with these 10 sports themed songs, and we started shopping it around.

We'd sent it to a bunch of brands and agencies that we had been speaking to saying, you know, if you need anything for your Super Bowl content quickly, here's some pre-cleared music that is real, is not royalty free. That'll do you a favor as far as your content engagement goes. Give it a try. And we put that site up and then within a week we had, uh, an agency buy a license from a song for PepsiCo's Instagram account for a Super Bowl promo.

And it was a video that promoted some Super Bowl package they had with Gatorade, Doritos, and obviously Pepsi. And what we then did, obviously that was a great moment for us because it was a great logo. And we started looking at the engagement that that video got compared to other videos that PepsiCo had used.

'cause what we noticed was that Instagram where they posted it, recognized the song. And so the sound icon on the bottom right changed to the album cover of the track instead of the icon of the profile that had posted it. So that was a great validating moment for us because it showed that it's true. The algorithms really are listening out for real music, most importantly, and their engagement jumped up because of that.

So that was kinda the first big win that we had. And so then we really started digging in, okay, how big is this market opportunity? What other songs could we get for something like this? And then I'd say the second big moment that validated and kind of expanded our scope was, We saw a purchase on the platform now that we had gotten a few more rights holders on board and we started getting much more music and we built out a proper library experience at that point.

A moment that validated us, a second moment was when we saw an influencer sign up to the platform, purchase a license, and then use it in content for Warby Parker. She did a collaboration post with Warby Parker and on Instagram we then followed that again and. What was unique about this opportunity was that she had purchased the license, but then didn't pre-edit the audio into the video because she was a content creator.

She had access to all the songs in Instagram already, so she just clicked on that song. And so because she's using the song natively in the platform and it's real music on top of that, that at this point had had other videos made with it. It was a song that had 4,000 tiktoks made with it at that point.

So we started really delivering on our promise of like trending sounds. It's like we're giving you music that other people have made content with. We then compared the engagement on her video with Warby Parker compared to the other videos. That Warby Parker have created with other influencers where they were using royalty free music.

And again, there was a huge jump in engagement on Warby Parker's content. And so for us, it showed that not only is there an opportunity here for brands to kind of tap into these cultural moments, but as artists, you actually have leverage because you, you've proven that your music is really valuable in a unique way that didn't used to exist pre TikTok or pre.

Short form. So those two moments really proved to us that we had something and we've been kind of using those as proof points for brands to show them like, you know, this is the difference between our library and other royalty free libraries. And then for rights holders that look at the logos that are interested in piloting these things with us, help us so that we can continue building this library, supporting your artists, and then getting your artists' reach with even bigger companies.

Wow.

[00:13:08] Jade: Incredible. I love, I love what I'm hearing here. This is so exciting. This is so cool. It's also, it sounds like you guys are really serving, like really, really understand both sides of this market and have great solutions for both creators and brands. It's, it's just, that's really awesome.

 Jade: So what are some insights you've learned about serving both sides of this market?

 Ferris: Well, we started working obviously with a lot of sync teams because we needed to build some kind of catalog and build music. And then at the same time, we're asking a ton of questions to social media teams across all industries, and what I realized is we're dealing with people who have two very different frameworks about how music works.

You know, social media managers represent, in my opinion, the average person. They grew up in the social media age, they're used to getting on an app, clicking a song they want and making content instantly. So that's what they've grown up being used to because that's what they've been doing on their personal accounts, and that's when they've been making content for fun and that's how they got their jobs as social media managers.

And that's important because we have to think about then how do they value music? Because that's ultimately a question of a marketplace is when you're trying to create value and you're trying to have supply meet demand, you know, what is that point of equilibrium where they meet each other. So I had to think about how we price these things when talking to sync teams, because sync teams are referencing.

You know, movie sync deals, traditional advertising, the Super Bowl commercials, where songs are going for a million bucks or as low as a Netflix show, where the same songs were for five grand. So I understood how sync teams were pricing it, but then I started thinking about social media managers and by extension, the average person.

And what we realized is that for the average person. Spotify has convinced them that all recorded music in history is really worth 10 bucks a month. And the extension of that is that all music for business is worth 20 bucks a month because that's, I guess, the standard epidemic sounds subscription. And so that's what we're dealing with.

We're dealing with one set of people who are valuing their asset. At a four figure minimum to a seven figure premium, depending on what you're valuing a whole versus millions, literally millions of people. And by extension of that brand, who have never spent more than 20 bucks a month for any kind of music at an unlimited use.

So we had to figure out a way to bring these people in the middle, and I had to kind of break it to a lot of rights holders because, You know, they would say, we don't want to devalue our syncs. We don't want to devalue that. And you know. Unfortunately, the truth is right now I had to tell a rights holder, a pretty big rights holder that unfortunately right now the value of music as far as social media is concerned is actually zero, which is a controversial statement to say until you think back to all the lawsuits that I had mentioned right at the start of this conversation.

You know, if the music really. What's valued the way you think it is, you wouldn't be going after people trying to sue them for copyright infringements, but there definitely is more value than 20 bucks a month, especially for songs they recognize. And as we've been building this company, we see that brands recognize that they are willing to pay a premium, just not the kind of premium that.

Obviously a Netflix original would pay because it's a much bigger budget. Instead of five grand for one episode, you're dealing with five grand for potentially, let's say, I don't know, 10 to 20 Instagram posts. that's what you're dealing with here. It's a much more volume opportunity.

Tim Miles, who recently left Warner Music posted about this on LinkedIn about there's a new volume driven type of sync. And that's the volume opportunity that we're going after. So that's the first big insight is that music is valued very differently across industries, music versus let's say, social media.

And then the second one is that after I get this pushback, then from sync teams and we try and agree to disagree on price, they then tell me, well then they can just come to us and we'll negotiate with them. And I have two things to say about that. The first is that they don't know you exist. I think rights holders really underestimate how much knowledge the average person has about the music industry overall.

It's complicated already, and the perfect example of this is when I was negotiating with legal counsel at a sports league, a big major sports league. And they were asking what labels we're having conversations with, and I started explaining the landscape of the industry. And I brought up United Masters as an example of, you know, they have some great viral songs.

you know, they have a platform that supports artists and all of this, and they also make a content for sports teams disclosure. We don't have an agreement with United Masters, but I was bringing them up as an example and he was like, oh, wow. So does that mean that. You know, pretty soon you guys will have Drake.

And it hit me that when I'm talking about United Masters, this person in front of me thinks I'm talking about UMG. They can't tell the difference. They literally don't recognize the biggest music company in the world. They can't tell the difference between the biggest music company in the world versus.

United Masters. All due respect to United Masters, they're a fantastic company, but my point is they don't know anything about the music industry and in my opinion, nor should they, it's not their job as a social media manager to understand the ins and outs of fragmented copyrights and publishing rights versus recording rights.

It's their job to make content, and music is a very core component of that content, and they need it fast. So you need a mechanism to deliver that to them quickly. But yeah, I guess that's the, that's the big takeaway is that, you know, rights holders. Oh, and then I guess the second point of all of that is hypothetically is let's say all the brands did know information about the music industry, and they're all going at you for $500 requests each.

At the scale that. Um, the majors face, for example, these sync teams are not that big in the grand scheme of things. So they don't have time to deal with a hundred thousand brands who want one song at any given point. So nobody does, nobody has time to make all of those bespoke negotiations for such low figures.

And again. Similar to how the social media people should not need to know about the music industry. I don't think sync teams should be dealing with a hundred thousand social media teams at any given point because it's just the different business sync teams should be focused on their traditional syncs and maximizing the dollar value of those big ticket transactions.

We're not changing that, and that market shouldn't be disrupted. There've been a ton of sync startups that have tried and you know, there's a graveyard of them. And we're not trying to disrupt that business because that business will always be manual, will always be a relationship driven business and will always be bespoke.

And you know, case by case, social media's a very different case and I don't think sync teams should be dealing with that. And so at the end of the day, you know, the big takeaways are that I've seen is that social media, people dunno anything about music, nor should they, and sync teams don't have the time, let alone the resources.

To deal with the scale, the sheer scale that social media content requires, and I haven't even factored influencers into that discussion as well, because the moment you add influencer content, you're going from brands that are posting 10 times a day just on their own organic social to all of a sudden.

Adding literally 30 more posts at any given point because of how many influencers they're working with per month. So it's such a huge scale that needs efficiency. It needs speed and needs prices that are reasonable for the output volume. And that's where I think our insight is unique compared to, you know, most other people in the music industry.

I wanted to ask you like, on your journey so far as a founder, like maybe, maybe with Cipher or maybe it's with something else, but like what has been something that's really just surprised you?

[00:13:34] Ferris: the first thing I would say that surprised me is the process through, well, I guess I'll give a high level answer. So a lot of things about the way social media teams work has generally surprised me. We've learned a lot about social media teams and marketing teams 'cause I'd worked in sync before I'd done, kind of been involved in traditional sync deals before where it's very relationship driven.

And there's a lot of negotiation and there's a lot of back and forth, and it feels very manual as a process. And so what surprised me is that for social media teams, it's similarly manual for them, but in a different way. Because initially, for example, we built an AI chat bot to help them search for songs.

We thought that might speed up their search process because they have a very specific idea of what they're looking for. And what surprised me was that nobody used it. When users would sign up to the platform, they would much rather listen to a hundred different songs in one session than have some kind of AI chat bot tell them what songs to listen out for.

So that was very surprising to me because obviously as a startup you're always trying to figure out an AI component to what you're doing, whether that's a search bot like we did or generative music like Suno and everyone else. But we kind of realized that. You know, they don't always know specifically what they're looking for because there's so much content.

And so they don't have time to think deeply creatively about one individual post when you're posting on average 10 times a day. They need a specific vibe. That's what they're going for. And they'd rather just hear it and know it off instinct than paint a picture to a chat bot or paint a picture to a generator to try and come up with a song.

So that was one big thing that surprised me. And then I think the second big thing that surprised me, which. Learning from it has now helped us a lot in 2026 with our sales efforts is that, it's a lot easier to turn our library into an enterprise subscription. 'cause initially our hypothesis was if you make the song cheap enough, everyone's gonna jump on it and it's easy to expense, you know, a hundred or 200 bucks on a song.

Which rights holders obviously did not love that we were setting the prices for the songs that low. Counterintuitively, we realized it's easier for them to expense a lot more money if you forecasted it out for the year. So now we operate on a credit system and we've been able to jump the prices up a lot because they do have these budgets and it's just easier for them to commit the budgets when you've signed a contract that you know it's gonna be for a couple months or a year.

And so now thankfully we've been able to put our prices at a range that rights holders are much more happy with, but also it's become a lot easier to sell because now we're factoring in, we're factoring ourselves into a brand's marketing budget overall. So based on that, we've now kind of become much more of a typical enterprise SaaS startup where it's developing relationships with the brands, understanding their needs, understanding what genres they're looking for.

So that was, that was surprising for me as well. So ultimately now what I anticipate is once the subscriptions are there, the speed and the usage of the songs will come because the money's already committed. They have these credits, they're just gonna use a credit for a license, and that's kind of how it'll go.

So that was another surprising moment was, you know, going back to, it always goes back to SaaS, I guess, for a lot of tech people. But it's a great, great learning experience. Awesome.

[00:16:49] Jade: That's so cool. Yeah. I, I love to hear how you are, uh, adapting and learning and testing and taking these, moments that can be aha moments or, or surprising things and kind of, uh, implementing them really quickly.

That's just, that's so cool to learn about. I guess we've kind of, um, you know, really dived into this and so I just, one of the things I, I want to ask you is like, the future of like artists and brand partnerships and the future of the. Creator economy. Just I personally think it's kind of been a, you know, social media has been a long around for a long time.

Brand partnerships have been around a long time, but it kind of feels, something feels different now than it has in the past. Maybe more solidified or more, maybe it's more approachable or, I don't know. I'm just really curious what you think about like the kind of the future of this, world on social media where creators have leverage.

to work with some of the biggest, coolest companies, you know, that exist.

[00:17:41] Ferris: I think it's an exciting opportunity because music has become a lot more participatory and active than it used to be. It used to be a very passive experience. You're just listening and that's all you can really do. Now you're making content with the song.

Whether it's a new song that's just coming out or you're reviving old tracks. Distant Lover by Marvin Gaye over the last month or so has absolutely taken off on TikTok 'cause people are making all kinds of heartbreak videos and reminiscing over, you know, nostalgic old relationships. Doja Cat a couple days ago.

Made a video from, I think the movie's, Aristo Kats, the We Are Siamese song with some funny filter and she's doing a, funky dance and now other people are copying that dance. And so Doja Cat with a song that has nothing to do with her, she's all of a sudden revived an old animated movie song that people love.

so there's that on that level. Artists are having fun with their own songs and other songs. There's also now brands that are then tying into that, and I think the best example is last summer, jet Two, the budget airline in the uk. That sync that they had with Hold My Hand by Jess Glynn has been around for 10 years, but because people started posting funny travel fail videos or things that are just going wrong, jet two now has a very special relationship with that song and everyone associates it with things that go wrong when you're traveling.

So brands can do the same thing, and we've had tons of conversations with brands where they say, oh, you know, I want to use one song in 10 different videos because I want influencers to be creating a trend that ties back not just to the song, but to the brand specifically. Those kind of relationships between a brand, the song, and the content itself are great.

Examples of how now there's a whole new way music is being consumed and shared. So Cipher offers an avenue for artists to get into that world with brands and creators as well. You know, sometimes trends are completely organic and you never know where they're gonna come from. Sometimes as part of an album rollout, songs, Have influencers, you know, where rights holders are paying influencers to blow them up and create a dance. It's an entire ecosystem that exists now, and I think the brand aspect of this ecosystem is still very untapped, which is where we're trying to serve. Because at the end of the day, the brands have these budgets.

You know, influencers are getting paid five figures, even six figures for one post. And so imagine what kind of budget you can fit into as an artist when you know the influencers are begging for real music. And we know this because influencers have actually started Angel investing in Cipher pretty recently.

So we had back in, I want to say November. Brooke Monk, who has 40 million followers on TikTok. She's one of the most followed contact creators on the platform. Her and her manager put in checks into Cipher. We have another influencer who's very popular on Instagram, Emma Leger. She does all kinds of deals with hotels.

Recently, she went on a cruise, on a brand partnership deal, and she has music in all of her content as well. And so we're solving a pain point, not just for brands, but also for the influencers working with them, because at the end of the day. They have to show their authenticity and they have to come across as authentic to their followers.

'cause that's what got them viral in the first place. They've developed a trust with their community and a big part of that trust is looking native to the platform and using music that everyone recognizes. So all of these things give artists an opportunity to capitalize not just financially, but also distribution wise, and get their music really out there.

[00:21:18] Jade: So cool. I love what you're building. really excited to learn about this and, um, you know, excited for the future of Cipher. I'll ask you one last thing before we wrap up, and that's, what advice do you have for other, founders and solopreneurs and early stage companies just based on like, you know, it seems like got a ton of early traction and taking a lot of awesome.

Steps and there's been risk involved. Just curious, like what, what you would, uh, if you know, in a mentor session, like what you would tell someone that was just getting started or, uh, at really, at a really early stage.

[00:21:50] Ferris: The best piece of advice I received, uh, a long time ago was people always overestimate what they can get done in a year and underestimate what they can get done in 10 years.

So in my hubris when I first started, I really thought, you know, within two years we could get all these people done. We could start working with the biggest artists in the world and the biggest brands in the world. But I have been very humbled in my journey that it is a long game and patience is very important.

So that's, I would say, one of the most important lessons when you're starting anything. But especially in music, you know, you need a lot of patience. But with persistence, you can get a lot done. more done than you realize. That's the first piece of advice. I guess I have maybe two more. So the second one is, it's very much a relationship game much more than potentially in other industries.

Music is very much a relationship driven business. In our case, I've been surprised to learn that even social media is a relationship driven business. You know, a lot of brands. Social media teams know each other. They all chat, they all talk. They share what tools they use. And so I feel like maybe I'm biased just by experience, but I feel like in a lot of industries, they're a lot more relationship driven than we realize.

It's similar to music in that way. Music is very obviously built on all these networks of people that know each other and work together all the time, especially with how fragmented music rights are. But. You know, it can apply everywhere else, and so put relationships first in everything you do, because it'll pay off in the long run, even if it doesn't seem like there's much overlap in what you're doing with someone.

You know, always keep an open mind with your network and always maintain good relationships with people because that is what people invest in most. At the start when they wanna work with you, and even the brands that we've started onboarding very early on, a big value that they see in us is that my co-founder, Burke and I are working very closely with them to understand exactly what kind of music they're looking for and servicing that.

So don't underestimate the value of, relationships. And then the third one, the third piece of advice is. Try and prove as much as you can on smaller pilots, little projects, these little wins that you always, can get pretty early on. Capitalize on those and try and start small. Don't swing for the fences immediately as a music tech startup by making it mandatory that you need the majors to get your stuff done.

'cause that's gonna get you nowhere, especially in the beginning when you haven't proved anything yet. They're only gonna work with you if you can prove that you can bring some measure of success for what you're trying to do. In our case, we were lucky because on TikTok, the statistic is at least 50% of trending in viral songs are independent artists.

They've done a very good job of being a source of music discovery for a lot of artists, so that made it easier for us to not be as reliant on the majors in the beginning. We've since signed, you know, over 25 labels and publishers. All independent and we're very proud of that. And we're proud of the rights holders that we're, we work with.

But it's only through those partnerships and it's only through those early wins and case studies that we're building up that we've even begun having conversations with the major labels and understanding how they view social media because they have obviously a very different angle on all this too.

Independence, independent labels and artists look at us as a very easy revenue opportunity 'cause they see it very instantly. But the majors have very different priorities. You know, they need to protect their ip. They have much more content, copyright violations that they have to deal with than an independent artist or a guy with a studio who just happened to go viral.

the big number that everyone floats is, uh, one of the majors told us in our conversations with them that on average there are over 22,000, brands violating copyright per month. So you obviously have to have a very different working relationship with someone like that versus someone who, nobody's using their music illegally and they just love the idea of getting their songs out there.

So learn from these smaller case studies. Learn from, you know, the non-major music rights holders and artists that you can work with so that when it's time for you to scale up and when it's time for you to get ready. You have all of that infrastructure down, you have answers to all their questions, and you can get the, that relationship off to a good start.

Jade: Awesome, Ferris, thank you so much for chatting today. It's really great to learn about cipher and, and learn more about you. Um, I hope we have a great rest of your conference and, uh, look forward to, following the success of,

 Ferris: pleasure was mine. I'm glad we did this towards the end of the week when my voice came back after losing my voice yapping and chatting away throughout the week, but great to chat, Jade.

Let us know what you think! Find us on LinkedIn, and Instagram, or connect with podcast host Dmitri Vietze on LinkedIn.

The Music Tectonics podcast goes beneath the surface of the music industry to explore how technology is changing the way business gets done. Weekly episodes include interviews with music tech movers & shakers, deep dives into seismic shifts, and more.