Blockchain-based music streaming platform Audius has partnered with TikTok, becoming the first streaming service to sign a deal with the social media app.
The problem Audius hopes to solve is the small cut of music income that goes to artists. It’s estimated that musicians earn just 12% of the revenues, with gross music income of $23 billion globally in 2020. Audius aims for artists to be paid directly every time a song is streamed. However, the functionality has not yet been enabled. As one Reddit commentator observed, Audius would first need to prevent someone from earning money by uploading pirated music.
For young content creators in the music industry, TikTok seems like the ideal platform to expose and promote their work. TikTok’s algorithm is built so that every video has a chance to go viral, and an account’s number of followers is not a factor in the recommendation system. This means that lesser known artists can pop up on other users’ “For You Page” if they view similar content, and as more users watch a video, the more likely it is to spread through the app. It is also easy to create and upload content and it has a faster speed of streaming than any other social media service.
Many artists have become popular with the help of TikTok’s algorithm, including rapper Lil Nas X.
One of the challenges for music artists on TikTok is exporting their work to the platform to include it in a video. The current ways to get new music on the app are complicated and low quality, especially for teenagers with little technical knowledge just trying to expose a written song.
The partnership with Audius will enable users to take any of their songs on the streaming service and directly export it to TikTok. Audius is also exploring how to help artists with a following on the app monetize their work more effectively.
Audius was launched in 2018, but it only grew significantly this year. The service accounted for a little less than one million active users in January. By August, that number had increased to five million. Now, over 100,000 artists upload their music on Audius, many of them unknown to the broader audiences, although some big-label acts like to upload “tastes” of their content.
Despite being centered around crypto technology, the feature is not used as a marketing tool, and according to Audius CEO, around 95% of users wouldn’t know blockchain is an aspect of the service. The technology is nevertheless a core aspect of Audius’ ethos of empowering artists by enabling them to distribute and (in future) commercialize content directly to fans as opposed to through middlemen.
Audius estimated revenues are still tiny compared to Spotify’s $9.5 billion. However, the partnership with TikTok not only has the potential to significantly increase its exposure to the app’s half billion users, but it also opens doors for monetization opportunities, depending on how TikTok develops its content distribution and compensation strategy.
Meanwhile, Ant Group operates a blockchain initiative to protect music copyrights. South Korea’s CJ Group supports a similar platform, and Sony Music participated in a $30 million round of funding of NFT marketplace MakersPlace.
