Audius: Should Artists Care? 🤔
Critical Review of the Crypto based streaming platform
Audius is a new Crypto based streaming platform looking to shake up the industry. It shapes up as a Soundcloud killer but some also view it as a Spotify competitor as well. Let’s dive into the specifics and see what it’s all about.
Here’s Audius explaining its monetization plans in a series of Tweets.
One thing to take note of here is that while Audius is a live platform where artists have their music available to stream, there is no monetization system. Artists on Audius currently have no way of profiting from their work so streams on the platform are earning them zero dollars. Paying out 90% of revenue to artists sounds great but, 90% of what revenue? Where’s the money supposed to come from?
I don’t get why they’d compare themselves to Spotify from the standpoint of payouts when artists are making zero from Audius, but we can investigate what they’re saying nonetheless. In the example they use with Daft Punk, labels are entitled to the same share of royalties no matter the platform. It’s not like Daft Punk would have ended up with a better split with their label by using Audius. Going by their example, with Audius’s proposed payout, Daft Punk would have been paid $11,571 from 100M streams instead of $9,669. That’s not exactly life changing money. If you’re talking about an artist without a label, you’re talking about $385,713 from Audius vs. $300,000 from 100M streams on Spotify. What also has to be considered is the likelihood of reaching that many streams on Spotify vs. Audius. Tidal pays more per stream than Spotify and Apple Music, but artists make more money from Spotify and Apple Music than Tidal because they get more streams there.
I saw someone comment this Tweet about their monetization and their reply gives some insight into their plans. Seems they’re looking to allow artists to set their own per-stream rate and tier off their catalogs. There was this issue with Adele and Spotify because she wanted to restrict her music to users on the Premium tier and Spotify said no, so she kept her music off Spotify. Why’d Spotify say no? Fragmentation! You can see how this has worked with Soundcloud and Soundcloud Go which allows some songs to be free and others restricted to Go. The response is that users go...to Youtube and stream the music there. In the sense of Go, they’re asking people to pay $5 for unlimited access to all music on the platform and they can’t get people to do it.
Considering Soundcloud’s struggles, I don’t see how forcing users to have multiple subscriptions to individual artists, pay varying amounts to stream individual songs, etc. is going to work well. Artists that can manage something like this already have Bandcamp and Patreon.
Here’s an uncomfortable truth. Artists that have fans willing to buy their music are selling music and making money from it. It’s not a problem that needs to be solved. The only artists having problems selling music are artists with music nobody wants to buy. Streaming allows artists to profit without people loving their music enough to buy through passive streams and playlists. That’s why artists put so much focus on Spotify. It’s the easiest way to earn money from your music despite how listeners actually feel about it. Audius says it wants to “give artists power to set their own per-stream rate & whether to monetize only parts or all of [their] catalog” well, Bandcamp already does that. It’s not a problem that needs to be solved.
$Audio is the Platform Token for Audius. It’s what they plan to use to pay the people that keep the platform running and reward users, both artists and fans, for participation and contributing to the growth of the platform. Users are also assigned certain privileges based on the amount of $Audio they hold in a process called Governance. $Audio can be used to vote on the direction of Audius which is seemingly how they plan to give artists control. The more $Audio coins, the greater the weight of your vote.
- Bronze 10 $Audio
- Silver 1,000 $Audio
- Gold 10,000 $Audio
- Platinum 100,000 $Audio
Audius Rewards is the platform’s system of distribution of its $Audio coin. Artists with certain weekly accomplishments are given an allotment of $Audio. We can take a look at how artists earn $Audio:
- Top 5 Weekly Trending Tracks - 100 $Audio every Friday
- Top 5 Weekly Trending Playlists - 100 $Audio every Friday
- Top 10 Monthly Trending API app - 500 $Audio every Friday
- First Verified Account Upload (Verified Twitter or Instagram account) - Undisclosed amount of $Audio
Here’s the issue with $Audio and $Audio Rewards. The whole bit about giving artists control seems wildly overstated going by their $Audio distribution system. Looks like they want the developers to have most of the power and say over the platform. It’s possible they split decisions up where technical things are put to a vote amongst the developers and things that are more feature related are put to a vote amongst artists, but that doesn’t appear to be the case. As far as I know, everyone with $Audio on the platform has a vote.
Audius Rewards is a popularity contest and the artists with the most means are the most popular. Artists with the biggest marketing budgets, with the resources to get on television, and radio. Audius says it welcomes all artists, even signed ones and rewarding those who sign up that have verified social media accounts is indicative of that. Let’s say Taylor Swift, Beyonce, Rihanna, Ed Sheeran, and Justin Beiber join Audius, there's your top 5 trending tracks every week and consequently, the artists with the most control over the platform. Audius Rewards pretty much feeds the same power structure as Spotify and all the other streaming platforms. Remember, the more $Audio you hold, the greater the weight of your vote.
They also speak against the control corporations have but $Audio coin can be purchased on exchanges. Any corporation could simply buy up all the coins available and take control of the platform. The creators could ensure that they always have the most $Audio or simply mint more and distribute them to whoever they decide they want to have control. In any event, the artists aren’t in control.
Giving Listeners monetary incentive to help artists earn more streams can lead to a lot of fraud with the usage of bots, users agreeing to play each other’s playlists on repeat, etc. that could be completely counterproductive to the point of it all. At the end of day, do artists really want people out there pushing their music on people like it’s some type of Detox Tea Pyramid scheme to rack up $Audio coins? I mean, it’s effectively a new kind of Payola.
Audius is like the Emperor’s new clothes. They’re trying to convince artists they’ve got on a great outfit despite the fact that they’re naked in the mirror. They don’t charge users a subscription fee so there’s no revenue there. Artists can’t charge for anything, so there’s no revenue there either. Instead, artists are kind of treated like unpaid interns busting their hump in hopes of a paid position, which in the case of Audius, would be an allotment of $Audio.
Calling out bad industry practices is great virtue signaling that can ingratiate them with artist communities but, what is AUDIUS doing though? It’s like a mechanic pointing out everything wrong with how another company repaired your car, you bring it to his shop and he has no tools. He says, “Leave your car here and when I get my tools, what I do to your car is going to blow your mind.” But, he can’t tell you when his tools will arrive and you need your car to be fixed ASAP. You’ve got to get back and forth to work and get your kids to and from school. Even if you believe him, you’ve got to take your car to another mechanic because you’ve got things to do.
In order for Audius to succeed, artists would have to choose to send fans there over other platforms. If they do that now, they’ll make no money because there’s currently no way to monetize on the platform. If they don’t, then Audius may never get to the point where they can monetize. It’s a chicken and egg type of conundrum.
Even with the tools, an argument can be made for whether Audius is necessary. The problems they seek to solve aren’t really problems that need to be solved. They talk about monetization and control but the artists they highlight include 3Lau who sold over 11 million dollars worth of NFTs from a personal website. That doesn’t speak to a lack of control or need for monetization. Artists can sell from their personal websites using eCommerce solutions like Shopify, Woocommerce, and Squarespace. If they find maintaining their own store too much to handle, there’s Bandcamp. Both options give artists a ton of control and pretty much all of the profit.
It seriously concerns me that Audius could put a product to market and market around solving monetization problems, with no means of monetization. When I say no means of monetization, I’m talking about the artists, because Audius monetizes through its $Audio coin which has a Market Cap of over 900 million dollars. They’re making money but the artists they have using their platform aren’t.
Audius has leveraged their free artist labor for a partnership with TikTok. The TikTok partnership allows artists to post their tracks directly to TikTok from Audius where they can go from earning no money for their streams to earning no money for their TikToks. Monetization doesn’t appear to be a part of the TikTok partnership so royalty free music is what they get out of it. What does Audius get out of it? Well, look at the price of their coin prior to the TikTok announcement and post the announcement. It jumped from about $1.5 to $3.
I remember when Tidal launched and had this whole thing about Tidal promises where they promised artists direct uploads, access to their fans, and access to stats. None of it came true. With Audius It’s all promises and if it’s one thing artists know well, it’s broken promises.