When you play a song on major streaming platforms, money doesn’t just zoom straight into an artist’s pocket. But what if it did? That’s how payments are designed to work on Audius, a platform built on a blockchain — yes, the same technological network that NFTs run on.
And this three-year-old San Francisco-based company that employs fewer than 40 crypto-crazed people has officially piqued the interest of some of music’s biggest power players. Later today (September 16th), Audius will announce a $5 million round of strategic funding led by major music celebrities, the team exclusively tells Rolling Stone.
Artist investors include Katy Perry, Nas, The Chainsmokers via their Mantis VC, Jason Derulo, Pusha T, Steve Aoki, Linkin Park’s Mike Shinoda, and Disclosure. Mountain-moving executives from different sectors of the music industry are also shelling out: They include Martin Bandier, who ran Sony/ATV Music Publishing as its chairman and CEO for 11 years; Guy Oseary, Madonna and U2’s longtime manager, via an investment firm he launched with Ashton Kutcher called Sound Ventures; Michael Kives, founder/CEO of investment firm K5 Global, who also used to be a talent rep for the likes of Perry, Kate Hudson, Bruce Willis, and Arnold Schwarzenegger; and Hitco Entertainment founder and Bahamian recording studio owner Charles Goldstuck, who previously co-founded J Records with none other than Clive Davis, and helped build it into RCA Records.
The list actually doesn’t end there, but we thought your eyes deserved a mini-break.
Onward we go: Other spots on the money list belong to Electric Feel Ventures’ Austin Rosen, the founder of a management company of the same name, who has also quietly co-written mega hits for stars like Post Malone (“Rockstar,” “Better Now,” “Sunflower,” “Congratulations,” “Wow”), Selena Gomez (“Wolves”), and Jonas Brothers (“Sucker”); Three Six Zero CEO Mark Gillespie, who’s Calvin Harris’ longtime manager; John Josephson, chairman and CEO of SESAC Rights Management; YM&U’s Matt Colon, who co-founded Deckstar, the management company that represents Aoki, Blink-182, Travis Barker solo’s work, and crypto-savvy musicians like RAC and 3lau; and Tom Windish, the live music veteran who, perhaps most notably, sold The Windish Agency to Paradigm in 2017.
The last time a string of heavyweights dropped big dollars into a streaming competitor it was for Jay Z’s Tidal.
Rolling Stone asked the veteran chief executive Bandier, who’s watched the biz hit the highest of highs and lowest of lows in his multi-decade career, what drew him in. “Blockchain, which I understand to be a transparent and immutable ledger of transactions, should benefit songwriters and other creators in a way beyond what the current system permits,” Bandier says, adding that while he would “never pretend to be an expert” here, his 32-year-old son Max has been following crypto developments and advising him. “Songwriters need more avenues for revenue, and this model should also help expedite payments for their music as it streams across the world.”
Bandier was also attracted to Audius because it’s “not simply a Spotify 2.0″: “Streaming is just one small, albeit meaningful, part of its business model,” he points out. “The blockchain is enabling entirely new revenue streams for artists and creators, like NFTs, social currency, and curation. Audius is not only using the blockchain to add potentially significant revenue streams for artists, but it also allows them to cooperatively own the platform itself.” (With monetized streams on Audius, 90% of earnings move in real time — with 10% going to the community that makes the system run.)
“I believe [blockchains] might be the most important technology to ever hit the music industry,” Nas says in a statement provided to Rolling Stone. “Everyone who uploads to Audius can be an owner. You can’t say that about any other platform.” Bandier is on a similar page: “Historically, the music business has tended to be slow on the uptake to technological shifts, often fighting rather than embracing them. I do think blockchain is likely to be a commanding force in further empowering creators and more deeply engaging direct artist fan-relationships.”
Audius tells Rolling Stone that the platform, which recently struck a head-turning deal with TikTok, now boasts more than six million monthly users. Forrest Browning, co-founder and chief product officer, says incorporating more easy-to-use crypto features is a current goal. “We see ourselves as the onramp onto blockchain tech for less technical users,” he says. “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.”
Audius — currently carbon-neutral — is also looking at ways to become carbon negative. The Ethereum-based platform has been donating to offset its carbon omissions, but Browning’s team is now moving large parts of the system to the more energy-efficient Solana.
Finally, Audius is still completely free to use in its promotional period, but execs hint the business model will change soon. “The free-to-use aspect will likely be there forever, similar to most UGC platforms like YouTube,” Browning says. “We foresee the community likely keeping that in place, because it’s a great way to build a community, and then layering in paid offerings that perhaps let artists monetize their superfans in unique ways. The creator economy this year in particular has shown that even a small percentage of your audience paying you directly can have a meaningful impact on your revenue and help grow the pie for everyone.”
From Rolling Stone US