Introduction to a startup that attracts celebrities and challenges Spotify and SoundCloud. TikTok chose it as its first music streaming partner, and Katy Perry and Linkin Park leader Mike Shinoda have already poured millions of dollars into the project.
The Audius project started in San Francisco in 2018. Co-founders Roneil Rumburg and Forrest Browning are at its origins. The project has two innovative ideas.
- Artists should earn a decent living from their work.
- The system for storing and transmitting audio recordings must be placed on a blockchain — a distributed and secure storage.
Perhaps the first idea made you smile – we all have heard a lot about the luxury that the stars are surrounded by. But in fact, modern show business is not so favorable to the artist. As the creators of the platform noted in their whitepaper, the music industry had a turnover of $43 billion in 2017, of which only 12% went to the musicians themselves. In comparison, American football players get 47% of the revenue generated by the US National Football League, while NBA players receive 49-51%.
The reason is that the modern show business industry has inherited the institutions that devour the lion’s share of revenues — labels, recording studios, physical media factories, and logistics firms for transporting records to stores.
The second idea of the project developers is to use blockchain capabilities for this, which will ultimately determine how it all will work. One of the Ethereum sidechains managed by the POA Network, which runs on a set of verified validators, was initially chosen as the content repository. However, in October 2020, it was decided to use a faster blockchain, and some of the hosting functions were transferred to Solana.
But unlike many blockchain projects, it was originally aimed at making interaction with the platform accessible to a person with any user experience.
Users won’t use your products if they’re harder to use than Google, Facebook, SoundCloud, Steam, or anything else.
When we talked about the music industry turning into shackles for musicians, it might have seemed that the streaming services, which have come into our practices as an alternative, carry a certain freedom. That’s not exactly true. The popular Spotify and SoundCloud also act as an intermediary between artist and listener, earning on this role.
Audius’s reward system and economic model is designed to remove all kinds of intermediation. The company itself sees its vocation in the creation of tools in the form of services, and the general project management is carried out by the community. The internal token AUDIO is used for this purpose.
Users can use AUDIO to pay for listening to music. Artists upload their tracks to the platform on their own and can set the desired cost for listening to the tracks. The funds paid by listeners are distributed according to the following scheme: 90% – to the artists, 10% – to the platform for the network development. The fee is used to reward validators that ensure security. Also, community members use these tokens to place bets when voting on proposals for any changes to the project. You can purchase a token on exchanges such as Binance, Mandala Exchange, FTX, HitBTC
There are also additional features and rewards. For AUDIO, listeners can get access to exclusive material from artists and purchase NFTs from celebrities. For some achievements — the best tracks, activity in social networks — the platform pays bonuses from time to time. In October 2020, for example, 50 million AUDIOs were distributed in this way among 10,000 artists and listeners.
A Billion for TikTok
Since its launch in 2019, the platform has reached 6 million unique users listening to tracks monthly. This is still not very significant when you consider that 400 million subscribers around the world use streaming audio services. But the project has already seriously raised the interest of many famous artists, who see it as an opportunity to open up a new audience and as a place for experimentation. Among more than 100,000 musicians who posted their videos, you can find famous and relatively famous Skrillex, Mike Shinoda, Mr. Carmack, Weezer, Diplo, Madeintyo, Odesza, Disclosure, Alina Baraz, Wuki.
In September 2021, it became known about an investment of $5 million in Audius, with top celebrities such as Katy Perry, Nas, and Jason Derulo among the investors.
“I knew blockchain would change the world since I invested in Coinbase five years ago, and I believe it might be the most important technology to ever hit the music industry,” — said the rapper Nas in his release. — “Everyone who uploads to Audius can be an owner. You can’t say that about any other platform”.
But the most significant boost to this startup came when Audius and TikTok signed an agreement that allowed artists to upload their music to TikTok for use in videos, and that instantly boosted the service to a billion-dollar market cap.