Team Talk is Music Ally’s interview series, where our marketing experts speak to music industry teams about their latest work, best practices, and smart strategies. You can find the archive here.
Music Ally first wrote about Audius in 2018, when its $5.5m Series A funding round saw it described as ‘SoundCloud on the blockchain’.
Since then the decentralised music service has raised more funding rounds, grown its network of artists and fans, inked licensing deals and introduced features to help artists make money from their music.
CEO Roneil Rumburg says the latter has been a key focus in the past year.
“The project got started six years ago, really just with the mission to give artists control of their distribution and their ability to reach fans. We went to market initially with a free product: so free to listen for users, and for artists a promotional tool or way to build audience,” says Rumburg.
“But over the last year we’ve really been focused on making this transition to having monetisation be front and centre in the product and in the Audius network and ecosystem, so artists can actually start to monetise these fan relationships.”
Rumburg adds that Audius now has “a number of artists that have started to earn meaningful revenue” on its platform “It’s a channel that they really care about and that’s become essential to their bottom line, so that’s been really exciting. But there is a lot more work to do to get to where we want to be.”
Audius has three groups of users. The first is artists and creators – including rightsholders when they are involved. The second is fans: people who come to listen. And the third are the ‘node operators’ who actually run servers and infrastructure that power Audius’s network, as well as developers who are building for it.
Rumburg says one important challenge for Audius is to keep these three communities healthy, happy and growing at a similar pace.
“For example, if artist and content growth is far faster than node-operator growth, the network could get to a place where there’s not enough capacity to actually host all the artists that are wanting to come on,” he says.
“Similarly, if artists grew without fans, it would lead to a lot of unhappy artists who can’t find an audience and can’t earn revenue. So we have to balance all three of these [groups].”
The last year has seen rapid growth for Audius’s communities of artists and developers, including a broadening out of its artist community beyond the electronic musicians who were its early adopters. Latin American and Spanish-language music is growing on Audius, for example, reflecting trends in the wider industry.
User growth is a more nuanced story for Audius. “We’re seeing a deepening of engagement in response to some of these [new] monetisation features, but slower growth in the total user numbers that are coming to the free product – “just because artists aren’t uploading as much free content any more now that they can monetise things,” says Rumburg.
A free-market approach to how artists make money
Audius has taken a free-market approach to how artists make money, giving them control of how much they charge for access to their music.
“We have some artists charging upwards of $50 to unlock perpetual streamming access, and they’re doing really well with that,” he says. “A smaller number of fans are converting, but it doesn’t take that many fans for it to be meaningful.”
How artists use Audius, then, is increasingly being driven by the revenue they hope to make on the platform, rather than by the number of free listeners they can reach.
“We have a pretty healthy mix of artists who have found their footing and got started on Audius, coming up natively within this community, and then a number of artists who are already well-established, but started engaging on Audius and brought a lot of their existing fans over,” says Rumburg.
Audius has been one of the most prominent music services associated with web3 technologies, although the hype around that sector – or rather, around its NFTs sub-sector – has diminished rapidly from its peak a couple of years ago. Does that help or hurt a company like Audius, whose focus is on other aspects of web3 like decentralisation?
Rumburg thinks that the NFTs hype-cycle subsiding is letting those other aspects shine through. “The speculative angle has really fallen by the wayside,” as he puts it.
“When NFTs were the topic du jour and everyone was talking about them all the time, we stayed away from launching any minting functionality on Audius,” he continues.
“We did launch some features to let artists gate access to content for a fan having an NFT and ancillary things like that, but we didn’t feel that the speculative element of NFT sales and trading was really aligned with our goals, and the Audius ecosystem’s focus on fan engagement.”
“If you looked at the data on who was collecting NFTs, the typical purchaser was someone who was already crypto-native, who was speculating on a lot of other things, and who was purchasing music NFTs not because they loved the artist, but because they saw an opportunity to make a buck,” he continues.
“There’s nothing wrong with that, but it was just not the game our ecosystem was interested in playing. But it did suck the air out of the room on anything ‘crypto music’, and to this day a lot of folks think Audius is an NFT platform and NFT minting tool. It’s frustrating at times, but we feel fortunate that as the hype cycle has died down, the focus has shifted back to what can you actually do with these decentralised tools and mechanics that wasn’t possible before?”
Rumburg is also thinking a lot about how to ensure Audius sticks around for the long term, rather than falling victim to what he calls the historical “ephemerality of platforms” in music-tech.
Community, ownership and ecosystem
The communities that emerged on the original MySpace died off in that platform’s latter years, for example, while he is also nostalgic for the “mid-2010s period of SoundCloud” and its community, which he feels was fragmented by “a series of decisions that deprioritised community content and prioritised what you’d call more institutional content”.
Audius wants to be the spiritual successor to those two communities, fuelled by an ownership structure that heads off the prospect of decisions that lead to its users decamping en masse to elsewhere. Rumburg suggests that the key is building a community and an ecosystem, rather than a specific product.
“We really think of Audius as this community and ecosystem, and doing it [building] in a way that empowers and franchises that community to control its own destiny, rather than me and my team trying to control it,” he says.
“My background prior to Audius was not in music, and neither was my co-founder’s. We were lovers and to some extent creators of music, but we weren’t professionally in music. One of the things that’s always struck me about the music industry broadly is this fear of losing control, or giving up control in any way. But if you embrace the lack of control and some of the chaos that comes from that, great things can come out of it.”
“I get why a lot of that behaviour in the music industry is motivated by fear of the unknown, and fear from the horrible times in the 2000s: that lingering memory of what happened when the industry lost control of how distribution happens,” he continues.
“Now that they have wrestled back control of it, there is fear of giving up some control once again. I get where that comes from… The right and ability to control is extremely important and it shouldn’t be taken away. It just should be exercised more judiciously… it’s when it’s used in ways that make it so difficult for anyone to move the ball forward in terms of how things work.”
However, he has also been encouraged by some of the signs within the industry about how it sees platforms like Audius, and the wider concepts of control and distribution around it.
“Much of the industry has started to get excited about Audius, and wanted to play with it and start engaging. I think the way folks perceive this ecosystem has come a long way in those years, but there is always more work to do!”
