Blockchain-based decentralized music streaming platform Audius has secured $5 million funding from leading names in the industry, including Katy Perry, rapper Little Nas X, The Chainsmokers, and Jason Derulo. The Rolling Stone reported that Martin Bandier, the former CEO and Chairman of Sony/ATV Music Publishing, is also a backer. The funding was secured after the Spotify rival reached the six million user mark.
Music streaming services collectively account for over 443 million subscribers, with Spotify alone having 165 million paying users, and the industry is estimated to be worth $13.4 billion in 2020. A recurring issue with mainstream streaming platforms is that many musicians, especially those struggling for greater exposure, believe that they don’t get a sufficient cut of the revenues. In addition, when uploading content in these services, artists risk having their work copied or illegally monetized by outsiders.
Audius is addressing these challenges using blockchain. Through blockchain, artists can safely upload their music on the platform and have an immutable record of owning that content. However, Audius needs to make sure that the person claiming ownership is the actual artist. If the content is misused, artists can easily prove ownership of the intellectual property and take the appropriate measures to stop it from being used without their authorization. It also gives musicians more control on how to monetize their work and enables them to connect with fans directly.
“Streaming is just one small, albeit meaningful, part of its business model,” said Martin Bandier. “The blockchain is enabling entirely new revenue streams for artists and creators, like NFTs, social currency, and curation.”
Another feature of the app is its cryptocurrency token which is used for rewards. For example, tokens are awarded to top five weekly trending tracks or playlists and top ten uploads. Tokens are also occasionally awarded to artists with high levels of social media engagement. The capability to pay artists a cut of revenues is still a work in progress.
There are over 100,000 artists uploading their content on Audius. Many are smaller artists looking to monetize their work, but labels such as Diplo and Weezer also upload some tracks on the platform. Audius has become a place for more mainstream artists to test out music content before launching it on more popular services.
The new funding and the support from well-known investors is likely to contribute to Audius growth and popularity among music artists. It also enhances the platform’s credibility and further establishes it as a serious competitor to Spotify and Apple Music. Audius is working on giving a lot more to artists than the leading names in the industry, who may need to revise their strategy and compensation distribution to keep up with industry developments.
Meanwhile, Audius was the chosen streaming service to partner with TikTok. Japanese blockchain firm Gaudiy partnered with Sony Music, and South Korean CJ Group launched a blockchain app for music copyrights.
