Audius, the 'Blockchain-based SoundCloud Alternative,' Raises $5.5 Million
Audius is a new blockchain-based music platform that wants to revolutionize the way artists get paid by cutting out the middlemen.
Audius’ CEO, Ranidu Lankage, has set his sights on services like SoundCloud, with a direct payment twist powered by cryptocurrency. And just like Bitcoin, Audius hopes to trim the financial middlemen between two people when transferring money.
The result? A truly decentralized, direct-to-fan utopia. Ot at least that’s the idea.
Users of this new platform will purchase tokens directly from Audius to load their wallet balances. The service then pays out fractions of a penny to artists for each play their music generates, giving 85% of the earnings directly to the artist.
It looks like those payments will be in cryptocurrencies, instead of actual cash. That introduces wild fluctuations and the distinct chance of an overnight crash, among other problems. But Audius is betting those risks will be outweighed by broader direct-payment gains.
But can Audius fix the streaming system?
At a top level, platforms like Spotify and Apple Music give up to 70% of their streaming royalties back to creators. That translates into billions in the aggregate, but unsigned artists usually get stuck with embarrassingly low payments, based on micro-pennies per stream.
And artists signed to labels frequently get a tiny fraction of the money after it all trickles through.
Then there’s the question of what’s really wrong with SoundCloud. The platform pays little-to-nothing, though it’s becoming a veritable farm club for major label superstars, especially on the rap side. So who needs a crypto direct-payment when you’ve got a multi-million dollar advance from Capitol?
Audius has yet to launch publicly, but the development team has teased an open beta sometime this year.
The group recently raised $5.5 million in funding, backed by General Catalyst and Lightspeed. Kleiner Perkins, 122 West, Ascolta Ventures, and Pantera Capital also contributed to the first round of funding.
The developers are hoping the Audius token will grow in value — just like Bitcoin. If course, Bitcoin’s value has also taking an extreme beating this year, flattening much of the enthusiasm around crypto. Sadly, the story around ICOs is one of far greater despair, with many nascent coins flatlining or getting exposed as flat-out scams.
One of the first artists participating in this new venture is EDM artist 3LAU, a longtime proponent of cryptocurrencies.
He believes this new platform could revolutionize the way music is distributed, and the most recent round of investor funding echoes that idea. Investors at Lightspeed Ventures and General Catalyst have high praise for Lankage and his team, stating they believe the future of music distribution will evolve with a decentralized platform.
And of course, there’s tons of pain on the artist side. Now, the question is whether Audius can solve those problems using a crypto system that has so much pain of its own.