INSUBCONTINENT EXCLUSIVE:
Audius wants to cut the middlemen out of music streaming so artists get paid their fair share
Coming out of stealth today led by serial entrepreneur and DJ Ranidu Lankage, Audius is building a blockchain-based alternative to Spotify
or SoundCloud.Users will pay for Audius tokens or earn them by listening to ads
Their wallet will then pay out a fraction of acent per song to stream from decentralized storage across the network, with artists receiving
roughly 85 percent — compared to roughly 70 percent on the leading streaming apps
The rest goes to compensating whomever is hosting that song, as well as developers of listening software clients, one of which will be built
by Audius.Audius plans to launch its open-sourced product in beta later this year
But it already found some powerful investors that see SoundCloud as vulnerable to the cryptocurrency revolution
Audius has raised a $5.5 million Series A led byGeneral Catalyst and Lightspeed, with participation from Kleiner Perkins, Pantera Capital,
122West and Ascolta Ventures
They&re betting that Audius& token will grow in value, making the stockpile it keeps worth a fortune
It could then sell chunks of its tokens to earn revenue instead of charging artists directly.Audius co-founders (from left): head of product
Forrest Browning, CEO Ranidu Lankage, CTO Roneil Rumburg&The biggest problem in the music industry is that streaming is taking off and
artists aren&t necessarily earning a lot of money
And it can take three months, or up to 18 months for unsigned artists, to get paid for streams,& says Lankage
&That what crypto really solves
You can pay artists in near real-time and make it fully transparent.&The big question will be whether Audius can use the token economy to
crack the chicken-and-egg problem of getting its first creators and listeners on a platform that might be less functionally robust than its
There are a lot of moving parts to decentralize, but there are also plenty of disgruntled musicians out there waiting for something
better.From Sri Lankan hip-hop star to serial entrepreneurMost startup guys don&t have Billboard charting singles on their bio, but Lankage
Born in Sri Lanka, his hip-hop songs in his native tongue of Sinhalese were the first of the language to be played on the BBC and MTV
He got signed to Sony and even went platinum, but left the label seeking greater control over his work
After going to Yale, he applied his music business knowledge to build a Reddit for dance music called The Drop with Twitch Justin Kan back
in 2015.The two teamed up again on a video version of QA app Quora called Whale, but that fizzled out too
Lankage next venture Polly, a polling tool built as a complement to Snapchat, inspired the now super-popular Instagram Stories polls and
But after an acqui-hire by Reddit fell through, he returned to his first love: music.&I&ve always been passionate about building tools for
But this time, he wanted to focus on helping them turn their art into a profession
He teamed up with CTO Roneil Rumburg, an engineering partner at Kleiner Perkins who&d build a crypto wallet called Backslash, and head of
product Forrest Browning, who&d sold his software metering startup StacksWare to Avi Networks.Their goal is to build a blockchain streaming
music service where listeners don&t have to understand blockchains
&Auser wouldn&t even know that they have a wallet,& says Rumburg
They&ll just hear an ad every once in a while, get a subscription, or pay per stream
Since Audius is open sourced, developers will be able to build their own listening clients on top, which could specialize in discovery of
certain types of music or offer their own payment schemes.&I have known Ranidu, Forrest and Roneil for a long time, and have always been
impressed with their ability to blend art, technology and business together,& says investorNiko Bonatsos of General Catalyst
&InAudius, they bring together all three skills, with a deep technical heart and a compelling solution for a very big marketplace.&Tokens,
not record labelsFor starters, Audius is focusing on signing up independent electronic musicians
These are the types that might be popular on SoundCloud but actually have to pay for hosting there while not getting much back due to the
platform weak monetization options
Don&t expect U2 and Ariana Grande on Audius, at least not yet
But the startup could differentiate by offering access to content you can&t find elsewhere.To get artists on board, Lankage tells me Audius
plans&to use token incentives.& Those willing to jump on first before there are many listeners could get a bonus allotment of tokens that
might be worth more if they help popularize the service
And where artists go, their fans will follow
Audius is hoping artists will share its links first because that where they&ll earn the most money.
Audius has also lined up a legion of
big-name advisors to help it develop its blockchain product and artist relationships
Those include Augur co-founder Jeremy Gardner, EDM artist 3LAU, EA co-founder Bing Gordon and more it can&t announce just yet.The linchpin
of Audius will be the user experience
If the system feels too complicated, listeners and artists will stay elsewhere
A DJ might earn more per stream from Audius, but if Spotify or SoundCloud offer better ways for fans to subscribe to them and generate more
plays long-term, they&ll still direct supporters there
But if Audius can hide the nerdy bits while solving the music industry problems, it has the potential to be one of the first mainstream
consumer blockchain projects that treats the tech as a utility, not just a new stock market to bet on.
