“It was SoundCloud’s opportunity to lose and now it’s ours” says Audius CEO Roneil Rumburg. Plenty of musicians and fans are sick of SoundCloud’s expensive hosting costs, haphazard content takedowns, and lagging user experience as the site’s status withers. Audius wants to be the opposite, and offer a new home for artists where they’ll eventually earn 90% of revenue earned and the startup itself can’t remove songs.
Today Audius launches its music streaming and free hosting service backed by DJs like deadmau5 and Zed’s Dead, plus $5.5 million in A-list venture capital. Music makers can upload their songs at no cost, and users can browse, follow, and get listening recommendations. The catalog is small to start with just a few hundred artists, but Audius has big plans for how to lure artists choosing between other SoundCloud alternatives from Mixcloud to YouTube.
The secret sauce is that Audius isn’t just a web and mobile site, it’s an open source protocol built on the blockchain, not that users need to be versed in cryptocurrency or do anything special to signup. Audius doesn’t actually host the music, but decentralizes it across independently operated nodes, which it believes will protect it from lawsuits and record label pressure. It’s distributing its own crypto tokens to incentivize artists that join early as well as the node operators with the insinuation that these might rise in value if the service grows popular.
Audius is completely free for listening at high quality 320kbps. For now, artists can’t make money, though many still can’t on SoundCloud. But in early 2020, the startup plans to let artists opt into requiring users to occasionally listen to ads or pay a few dollars per month for an Audius subscription. 90% of revenue will go to the artists and 10% to the node operators, and their are also plans to cut in playlist curators. Audius itself hopes the value of its tokens will rise so it can sell from its stockpile to generate revenue.
“Audius’ dedication to empowering artists through supporting direct relationships with fans, censorship resistance, and fair pay is so important in a time when artists are being mistreated regularly” writes dance music superstar Deadmau5 aka Joel Zimmerman who’s on the startup’s advisory board. Other artists like Zeds Dead, Mr. Carmack, and Rezz have pledged to put some exclusive music on Audius, ranging from finished tracks to rough drafts. They were attracted by the promise of bigger and faster payouts, plus a transparent copyright takedowns process.
The biggest challenge for Audius will be playing catchup recruiting artists and listeners over a decade after SoundCloud launched and when Spotify already has 108 million paying subscribers from is 232 million users. For now there’s not much special about the user experience, where you can listen to a feed of what you follow or library of saved songs, or check out trending artists and playlists At least sign up is easier than most blockchain apps, requiring merely an email address or Twitter sign-in, though crypto kids can use MetaMask. The lack of native mobile apps won’t help, though.
All the artists-first philosophy won’t matter if it never gains traction. But if Audius does grow, it has a savvy approach to preventing unnecessary content takedowns. Rumburg claims an estimated 80% of takedowns on apps like SoundCloud and YouTube are not actually infringing copyright, leading to great content disappearing. “Audius doesn’t have the ability to deplatform you or censor you” says Audius co-founder Forrest Browning.
First, since it doesn’t host the songs itself, it will just pass copyright holder complaints on to the uploaders themselves. Owners can be reassigned the revenue being earned by a song rather than have it taken down. And instead of pulling down a whole DJ set, the rights holder of a 5 minute song in an hour-long mix would get 1/12 of the proceeds. Browning tells me “A lot of artists are completely fine with their content being remixed or mashed up.”
If disputes aren’t resolved, rights holders can approach the operators of nodes hosting the music and file a local equivalent of ta DMCA takedown request, though the music might still live on other nodes beyond the law. In that case, rights holders file a complaint to the Audius arbitration committee made up of users. That group can vote on whether a track legally should be removed or its revenue reattributed, and both plaintiffs and committee members must put up a small financial stake they’ll lose if their claim is frivolous or they make erroneous decisions.
We’ll see if this hands-off approach to censorship actually flies with the law. If so, it could give artists confidence in joining Audius that they lack elsewhere. Many are frustrated after constantly having to rebuild their audience on different platforms from MySpace to iTunes to Spotify to SoundCloud, especially if their tracks are disappearing. One benefit of being open sourced and decentralized is that “Let’s say our company closes up shop in 5 years? Audius and the content will live on forever, as long as folks continue to operate the nodes” Rumburg explains.
To make sure it stays in business as it stretches its venture funding from General Catalyst and Lightspeed, Audius has plans for additional tools that could make it and artists money. From being able to crowdfund future albums to selling merchandise or VIP experiences, Audius could become a gateway to spending on independent music. It could have to compete with itself, though, since Audius’ on-demand streaming site is just one client built on its Open Source protocol. The founders say they hope other people will build Pandora-style radio clients, music discovery apps, and more listening options through its APIs.
Rumburg and Browning met the summer after high school at a camp of Stanford admits. Throughout college, the recent graduates got deeper into dance music subgenres by devouring everything on SoundCloud. But watching their favorite artists get music kicked off that app while their DJ friends struggled to break through the algorithms, Rumburg says they wondered “how can we remove the platform from this equation?”
Music businesses aiming to free art from “the man” so often end up becoming him. But by decentralizing control and funneling money directly to creators, Audius may code its way into music culture.