After several months of widespread hype for collectible non-fungible tokens (NFTs), we are starting to see real use cases emerge for this new asset class. The music industry in particular is benefiting from the innovations and unique capabilities of NFTs. Several projects have created decentralized platforms for artists and their fans, including Audius, which stands out by not using the Ethereum network (ETH).
Audius, the new Spotify competitor
Founded in 2018, Audius is a music platform on the border of Spotify and Souncloud. The company operates a decentralized music streaming service with a social networking component. It allows artists to share their tracks on the app and connects fans directly with artists.
From a technical perspective, it is a blockchain protocol that allows artists to produce immutable, time-stamped records of their work, secured by a decentralized network. Initially, Audius was based on a side-chain of Ethereum, but migrated to Solana to take advantage of the network’s performance.
Music streaming services have more than 400 million subscribers worldwide and generated $13 billion in revenue in 2020. Nevertheless, stakeholders in this industry feel that the artist is unfairly compensated. Audius’ value proposition is therefore to rethink the monetization of musical works.
Audius launched its private alpha in 2019, followed by its testnet in August of the same year. Then, the company opened its platform to the public in September 2019. Finally, Audius created iOS and Android apps in early 2020.
In July 2021, the platform claimed to have surpassed 5.3 million users, up from 2.9 million in 2020. Users listened to tracks 7.5 million times during April 2021, the busiest month for Audius to date. This entire ecosystem is built on the AUDIO governance token, which is currently capitalized at $3.2 billion. In addition, AUDIO saw a strong gain in September, concomitant with the announcement of Audius’ latest fundraising.
In August, Audius’ AUDIO token nearly doubled in value in one day thanks to the integration of TikTok. Audius was the first to use TikTok’s Sound Kit feature to enable the transfer of songs into the app.
5 million raised with support from the music industry
On September 16, Audius announced the closing of its Series B round for $5 million. However, this round of funding has a special feature. The investors are almost all artists and celebrities. Indeed, the backers of the project include: Nas, Katy Perry, Steve Aoki, Mike Shinoda of Linkin Park, Jason Derulo, Disclosure, The Chainsmokers and Pusha T.
Many of these artists are already in the digital asset industry. Shinoda, for example, already uses Audius to showcase his NFTs and has released his own NFTs to his fans. Rapper Nas was an early investor in Coinbase. Finally, The Chainsmokers have invested in various crypto startups.
“I’ve known that blockchain is going to change the world since I invested in Coinbase five years ago. In my opinion, it is definitely the technology that will have the most influence on the music industry. Everyone who publishes content on Audius owns it. You can’t say that about other platforms.”
Sound Ventures, the venture capital firm founded by Ashton Kutcher, also participated in the round, along with former Sony Music CEO Martin Bandier. In total, Audius has now raised $14.85 million in funding across multiple rounds conducted since 2018.
In 2018, Audius had already raised $5.5 million in its Series A round led by Pantera Capital. Then, in July 2020, it was Multicoin Capital and Blockchange Ventures that led a $3.1 million round for the company, with support from Coinbase Ventures and Pantera Capital. Will the platform’s potential be fully realized?
