Quick take:
- Audius’ business model could pioneer a great shift in the music streaming industry.
- The Web3 music streaming service could take the power, profits and governance from centralised platforms to artists and fans, according to Bank of America.
- On Saturday, Audius said it was aware of the unauthorised transfer of Audio tokens, which some outlets estimated to be worth $6 million.
Just two months after Audius launched its mainnet in October 2020, The Conversation published a well-sourced report detailing the problems that have been plaguing the music streaming industry.
The report referenced the more than £1 billion that music label producers like Sony, Universal and Warner made from UK-based music streaming consumers. It also pointed to the hard fact that 8 out of 10 music creators earned less than £200 a year from streaming.
One of the reasons why music artists make so little from streaming platforms (one report estimated the average earnings at about £0.009 per stream) is because of too many intermediaries and a centralised ecosystem.
This is the problem Audius and several other blockchain-based music streaming platforms are trying to eradicate. And the Bank of America (BAC) thinks, despite the industry being in its nascent state, the disruptive power of a decentralised ecosystem could shape the future of the industry.
According to the investor note sent to investors on Thursday, Audius’ plans to distribute 90% of revenues to artists and 10% to node operators could be a game changer for music creators and their fans.
The company plans to achieve this goal by removing intermediaries like digital services providers (DSPs) and record producers from the ecosystem. This will result in a “decentralized DSP that shifts power, profits, control and governance from record labels and centralized DSPs to artists and fans,” the note says.
Audius last week launched a new monetisation feature that allows creators by allowing fans to send tips to their favourite artists using the platform’s governance token $AUDIO. The BAC thinks that the industry is destined for disruption, with decentralised distribution platforms slowly gaining traction.
The company also seems to be facing some teething problems in the early stages of integrating the new compensation feature. Audius said on Saturday it was aware of reports indicating there was an authorised transfer of $AUDIO tokens. The value transferred ranges from $1 million to $6 million, according to different outlets.
However, the report also cautions against the slower adoption of Web3-based music streaming platforms against DSP platforms that are looking to pivot into Web3. For instance, leading music streaming service provider Spotify has already forayed into the exciting new world of NFTs, giving its platform creators and fans more ways to earn. This effectively limits the number of creators and fans likely to jump to newer platforms like Audius.
Audius has already onboarded leading music artists including deadmau5, Diplo, Skrillex and Weezer, but growth seems to have slowed significantly since the beginning of this year.
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