How Is Audius Decentralizing the Music Industry?
| KEY TAKEAWAYS: |
| — Platforms like Audius are decentralizing the music industry. — Digitalization and the advent of modern-day internet services have been a blessing to the music industry. They have enabled music creators to earn a living while doing what they love. — Still, the music industry and the economy today face the challenge of centralization and inequitable revenue distribution. Platforms like Spotify offer a level playing field to all, but they choose to implement a self-centric monetization policy. Which leads to a minority of artists being able to make a livelihood out of their art. — This changes with Web3 music platforms such as Audius. In this article, we will explore how Audius blends the best features of Web2 music platforms with blockchain and cryptocurrency to design a creator and user-centric music industry. |
If you’re wondering what decentralizing the music industry actually means, then you’ve come to the right place.
Music has grown into a multi-billion dollar industry that supports the lives of thousands across the world. The increasing accessibility of Web2 (the internet as we know it today) and the advent of Web2-based music platforms like Spotify, SoundCloud, and Deezer have fuelled the scalability of the industry. The time is gone when people had to physically own cassettes and vinyl records to listen to quality music. Now, all it takes is a few clicks on a smartphone to access millions of soundtracks.
These platforms have offered music artists a level playing field to show their talent and build a community of fans. This new and evolving music economy on Web2 has thrived so well that in 2014 the sale of streaming music across these online platforms crossed that of CDs for the first time.
Yet, not all’s sunshine and rainbows.
The Challenges Faced by the Music Industry
The industry as it is, faces challenges of centralization and unfair revenue distribution. A few stakeholders such as label owners have set rules, guidelines, and unfair monetization policies to control how music is created, distributed, and rewarded. Per the stats, music creators only get about 12% of a total of $42 billion that the music industry generates while the rest is bagged by record labels, streaming platforms and so on. What’s worse is that artists also often have to give up their ownership rights when signing a deal with major labels.
Besides, users don’t get a lot except for accessibility. Web2 music platforms fail to offer exclusive fan-artist interaction or even ownership of the music the user’s paying for.
This changes with Web3 platforms, such as Royal, Catalog, Songcamp, and Audius, that are already winning the hearts of millions of fans and music creators.
The one that’s currently making waves is Audius. Audius plans to offer as high as 90% of the total music revenue to its artists. The remaining 10% is expected to go to users of the platforms and the node operators who operate the network. With such attractive offerings in place, Audius has built a base of 4 million monthly active users since its launch in 2019. It has also attracted more than 100,000 artists who have so far added over 450,000 tracks.
Sounds interesting? Let’s find out more.
Audius: Democratizing the Music Economy
Blockchain and cryptocurrency promise ordinary people the freedom that should’ve been theirs long ago. It all started with finance, but it’s also disrupting the music industry today. And Audius is leading the way.
Audius is a blockchain-based streaming platform in the throes of decentralizing the music industry; it’s controlled not by a central entity but by its own users. The platform currently has millions of users and many popular artists including 3LAU, The Stafford Brothers, and Rezz. This has made Audius one of the most successful and widely adopted non-financial crypto applications.
Why Blockchain and Crypto, Though?
Integrating blockchain and cryptocurrency to Audius ensures music creators are more in control of their incentives and incomes. AUDIO, the native token of Audius, rewards creators with the revenue generated by their content in real-time. Furthermore, the platform negates all central entities and middlemen, ensuring there is no foul play and a fair revenue distribution model that benefits creators. Artists can even create and sell their social tokens on Audius to offer exclusive content access to their fans, which can further help them monetize their creations.
How Does Audius work?
Although a blockchain and crypto platform, Audius almost doesn’t feel like it on its front-end. It comes off as a regular music platform that we are all used to. However, the real magic happens in the background and the key element of this is the AUDIO token, which serves three purposes:
- Security
- Feature access
- Governance
First up, to make Audius decentralized, the platform does not use a central cloud such as AWS. Intead it uses a decentralized storage protocol AudSP hosted on the Interplanetary File System (IPFS). The protocol then requires protocol users to stake a minimum of 200,000 AUDIO (~$430,000) tokens and meet other criteria to become a node operator. Node operators can then start recording data, approving transactions, and earning incentives for the same. While the barrier to entry is very high, users can also stake and delegate their tokens to node operators in order to earn a share of the rewards.
Furthermore, fans and artists on Audius can hold and stake AUDIO to gain access to premium features such as the right to vote on governance decisions. That way, Audius allows its community members to become active participants and decision makers.
What Is There for Users?
Besides staking AUDIO tokens to earn yield, users can also earn rewards for supporting their favorite artists. Audius has its dedicated Audius ledger that acts as the single source of truth for fan-artist interactions, be it streaming content, following artists, liking a track, creating a playlist, or sharing tracks. The platform then rewards these fan-artist interactions in AUDIO tokens so that fans too have an incentive to support artists.
And It Solves the Adoption Problem
Simplicity and ease of use are key to adoption, and most dApps, dare we say it, fail to deliver this. Most are revolutionary innovations, but of what use are these platforms if they’re not user friendly?
Audius takes a different approach. In fact, it’s so different that landing on the home page or logging in on Audius never feels any different from other platforms such as Spotify or Apple Music. Neither fans nor artists need to know anything about crypto to join Audius. This is another reason why it has achieved success.
However, users have the option to connect their Web3 wallets to the platform to hold AUDIO tokens and participate in platform governance and staking, if they wish to.
Is This the Future of the Music Industry?
It wouldn’t be a stretch to say so! Centralized platforms and music labels have for far too long dictated the music landscape and set terms in their favor. But decentralization is already changing that. Audius, alongside other Web3 music platforms like Royal, Catalog, and Songcamp, is leading this change in the music industry. We can say that given their benefits and user-centric approach, Web3 music platforms might be igniting a new movement.
Knowledge is Power
Blockchain is not only decentralizing the music industry – it’s also revolutionizing art and human experience. Tune in to On the Ledger to find out more!