A startup called Audius has raised $5 million from a roster of famous artists for its blockchain-based music streaming service. Katy Perry, Nas, and Jason Derulo are among the names that have poured money into the don’t-call-it-Tidal service, which is supposed to empower artists by giving them more direct relationships with their fans.
The company, which was founded in 2018, earlier this month landed a partnership with TikTok where small artists can upload their music to Audius and then offer it through the short-form video app.
LOTS OF IDEAS — It all sounds a bit amorphous but Audius says that, because the entire service is based on the blockchain, every user has their own wallet. A cryptocurrency called Audio supports Audius, and artists could theoretically earn Audio tokens paid to them directly by fans who stream their music or perhaps pay for access to exclusive content. Owning the token also gives artists ownership in Audius itself, similar to how Jay-Z’s Tidal worked before being sold to payments company Square.
Audius is not supposed to just be another Spotify. In an interview with Rolling Stone, the company suggests a lot of ideas for how cryptocurrency could help artists earn money. “Most people don’t realize it, but every single person that signs up for Audius actually has a crypto wallet created for their account. That enables us to build some really cool crypto features the mainstream is talking about — NFTs, etc — without all the extremely complex process of downloading and setting up extra apps.”
CRYPTO HYPE — That all sounds interesting, and certainly we’ve seen in the past year that people are willing to directly pay their favorite artists in exchange for exclusive work. Audius could also make it easier for artists to get paid quickly, because with cryptocurrencies all transactions occur near-instantaneously. The idea might be that an artist owns their own song, linked to the blockchain, and whenever a user listens, a small amount of the Audio token is transferred.
But right now Audius is completely free to use — you don’t need to pay artists to stream their songs — and all of these ideas are just that: ideas. The company is basically saying “We don’t know how we’re going to pay artists, but it’s going to involve crypto and it’s going to be great.” Audius says it is evaluating paid offerings.
NFTs themselves are still going through a hype phase, with people shelling out millions for random, low-quality digital artwork in what many believe are nothing more than MLM schemes, or people pumping up prices for the next sucker. The hope among proponents is that, even if only a small percentage of fans are willing to buy exclusive work, that could add a lot of additional income for artists. Maybe so, but exclusive content wasn’t enough to turn Tidal into a major streaming competitor. And its marketing as an artist-owned streaming service didn’t compel audiences to ditch Spotify either. But good luck to anyone who wants to support artists.
The Audio cryptocurrency is now valued at more than $2 billion, having jumped wildly on the fundraising news. You have to wonder what early buyers are doing with their holdings now.