Emmanuel Zunz: 300 Million Paid Streaming Subs in 3-5 Yrs.

“The definition of a modern music company is to be always evolving,” says Emmanuel Zunz, CEO and founder of independent digital distribution and client marketing solution company ONErpm. “Combine scalability with personalization to meet unique client demands.” The ONErpm platform, with offices in multiple countries, also boasts one of YouTube’s fastest-growing Multi-Channel Networks (MCNs) with over 3 billion plays per month.

Zunz recently stepped up to predict that worldwide paid streaming subscriptions will surpass 300 million in 3-5 years if labels and artists become more active in changing consumer behavior. Considering that streaming currently has only 50 million paid subscribers worldwide, his vision for the future represents quite a jump. It would also represent quite an increase in the pool of money available to compensate rights holders and creatives.

Now a Nashville resident, Zunz visited BossRoss corporate headquarters to discuss his vision for the future. Is reaching 300 million paid subs inside his time frame possible? I don’t know, but his articulate discussion was thought provoking. Below he discusses the size, shape and vision for his company and his plan for how the music industry can expand streaming subscribers over 600% in a brief five years! He also offers some great insight about maximizing exposure on Spotify and YouTube. Read on—see what you think…

BossRoss: What inspired you to start ONErpm?
Emmanuel Zunz: In 2005 I was a Boston musician into social enterprise. I formed Verge Records. The concept was to sign artists from impoverished or marginalized communities with content on the verge of something great. Verge is defined as “extreme edge or margin.” The goal was to use record sales to support education programs for at-risk youth in these neighborhoods. We operated for two years and during that time Verge won an NYU business competition in 2006. The grand prize of $50,000 gave me my first funding, but unfortunately I also quickly learned how easy it is to lose money in the music industry. We did however, successfully complete two youth-oriented projects, one in Rio de Janeiro and one in Harlem, NYC. I developed an idea for a bigger Verge, but didn’t own the Verge domain name. So we needed a new name and its domain. In 2008 ONErpm began. It became an acronym for One Revolution People’s Music. It’s built upon our original concept of doing good and making it scalable.

BossRoss: What does ONErpm look like today?
Emmanuel Zunz: At its core it’s a digital distribution company. But we’ve evolved into a much larger entity by adding label services. Artists can create a free album site and distribute it for free. We charge on the back-end. We have a very robust distribution business, but in terms of revenue generation it is only 10% of the total. The other 90% is from signing good artists, labels and management companies and providing high-end, high-touch services like a Kobalt might do. Over time we’ve developed into what I see as close to being a label. We currently have almost 60 employees spread across six offices: New York, Nashville, Mexico, Brazil (2) and Columbia.

BossRoss: So artists can choose services a la carte as needed?
Emmanuel Zunz: Yes. We’re especially good at getting artists featured on the platforms at release time and building long-term audience growth. For example, we make sure each artist has a verified Spotify profile and then start networking to add more subscribers. When you follow a verified artist on Spotify and they release a new song you get an email. But many artists still haven’t verified their profiles and fully engaged with the service. Same with YouTube and Apple music. Six months ago, our YouTube network had 33 million subscribers. Today we have 66 million. Our goal is 100 million by year end. So distribution is our core business, but we are solutions-oriented and very customizable. We can also pay rights holders if you don’t want to handle the accounting.

BossRoss: What about social media?
Emmanuel Zunz: We have expert online advertisers and can coordinate specific posts or social media campaigns (at release time), but we don’t act as an ongoing social media team. We also promote playlists or tracks through Spotify or YouTube ads. The distribution services themselves are becoming social platforms that make you money—unlike Facebook. (By the way, when is FB going to start making us money on video? They don’t pay video creators or the music industry anything, but they are making tons of money based on our content. I don’t understand that. At least YouTube shares with content creators.)

The next subscriber jump, within five years, should take us to 300+ million which will provide solid returns. 300 million paid subs in 5 years is realistic.

BossRoss: How did you build such impressive YouTube numbers?
Emmanuel Zunz: When we started in Brazil, iTunes was not a big thing and streaming really didn’t exist. YouTube was the only game in town. It’s all about building channels and audience growth. Yes, there are also content ID and rights management components, but to make money you must grow the audience. A way to facilitate that process we learned is through network cross-promotion, finding like-minded artists with similar fan bases. It’s like the concept of play listing on Spotify. If an artist has a video release and we have 100 other channels that are in the same genre, we make sure the video also appears on those other 100 channels, too. That multiplies the reach. We are an MCN (multi-channel network) for music and non-music and proud to be one of YouTube’s Top 20 partners worldwide. Right now we are doing 3 billion plays a month and growing about 14% month over month.

BossRoss: What needs to be done to improve streaming revenue for rights holders?
Emmanuel Zunz: We can’t just expect Spotify and Apple figure it out alone. We must be collaborative. At ONErpm we’ve had exponential growth in the last two years because we’ve been able to influence our artists and they in turn have influenced their fans to become paid streaming subscribers. If we all work together with the streaming services we will see good growth.

BossRoss: In the US we have about 20 million paid subs. Perhaps 50 million, worldwide. How should we implement your plan?
Emmanuel Zunz: There’s always an initial period of slower growth until you reach an inflection point or watershed moment. How much longer are we going to be in this early phase? Perhaps another year to 18 months. But then, assuming the industry begins educating consumers we should arrive at that point of rapid acceleration. Over the next two years we have to get to 100 million worldwide and that is doable. Spotify’s top markets are US, Mexico and Brazil—our three markets, and we are seeing tremendous growth, especially in Brazil (5 million paid now). We are helping change people’s behavior there. In Nashville, people still focus on downloads a lot, when streaming is our future. The next subscriber jump, within five years, should take us to 300+ million which will provide solid returns. 300 million paid subs in 5 years is realistic.

BossRoss: Isn’t 300 million paid subs in 3-5 years a tough fight though, especially when consumers have access to so many free opportunities?
Emmanuel Zunz: Changing behaviors is difficult, but it works. Our industry is still telling Apple and Spotify—”you guys figure it out.” But in markets like Mexico and Brazil we are educating creators and showing them how to make money. They in turn get their fans to subscribe and it becomes a virtuous circle.

BossRoss: Consumers love streaming, but what about the price point for subscriptions?
Emmanuel Zunz: It remains to be seen if we are at the right price point. Regardless, we must start building toward a sustainable future.

BossRoss: Do you agree we must increase the size of the streaming royalty pie?
Emmanuel Zunz: Yes, because then sustainable business percentages will be easier to negotiate. Part of my job is to think macro-economically about the business and industry, but I also must work within the reality of meeting my weekly or monthly objectives. I still feel very good about the future of the industry. 300 million worldwide paying for streaming is not a lot to expect in the scheme of things. We have the power to build this industry, we can’t just delegate it to other people. It’s up to every artist that is active on the platforms.

BossRoss: What’s Nekst for ONErpm?
Emmanuel Zunz: We are a medium size company trying to learn how to become big. My goal is carve out a larger share of the US business. Hopefully by the end of this year we’ll also have a new website with revamped and expanded data analytics areas. We want to provide clients with information and stats in real time about their streams. The more you know about your music, and the playlists featuring it, the better you can do.