✖️ Why Audius needs to be more like Roblox to succeed in creating a music economy
Instead of being the "anti-SoundCloud", it should look to partner with the industry and take inspiration from gaming economies.
Recently blockchain-based music streaming service Audius distributed tokens to 10,000 of its top users, giving them ownership of the platform and rights to vote on its future plus make changes to its structure.
While its advisory board — which includes Twitch co-founder Justin Kan and EA Games co-founder Bing Gordon — is impressive (though all-male), I have my reservations about the platform. I’ll explain why in a moment.
Despite my reservations, I do believe Audius is on to something. When it distributed the tokens, they didn’t all go to artists, but also fans. Music is in desperate need for a digital economy more complex than one-directionally spreading out subscription fees over stream counts.
From the beginning, Audius set itself up as “like SoundCloud, but not SoundCloud.” There’s a real difficulty in positioning yourself that way. SoundCloud is a company with more than half a billion USD in funding to date. It has relations with most of the music business, technical integrations with all kinds of hardware & software, and has spent over a decade building up its community, team and infrastructure.
The standards for music streaming are incredibly high now compared to the landscape that the current incumbents started out in. While I definitely think SoundCloud and other music streaming services of that generation are leaving space for newcomers to claim, I think it’s important to focus on what in particular a newcomer can do better and excel in that. In terms of doing a particular thing better, I’d argue Instagram has become the anti-SoundCloud.
How do you deliver a good user experience and an audience to people? How do you get them to regularly visit your app / platform? How do you grow beyond the front of the adoption curve? All of these have answers, but how do you do that better than others? Setting yourself up as a one-size-fits-all service creates expectations you can’t fulfill.
On to a more complicated matter. Audius, as a decentralized service, will pass takedown requests on to uploaders who will have to take action. If it can’t be resolved, it moves to an arbitration committee made up of Audius users:
“That group can vote on whether a track legally should be removed or its revenue reattributed, and both plaintiffs and committee members must put up a small financial stake they’ll lose if their claim is frivolous or they make erroneous decisions.”
I appreciate the idealism in letting its community resolve these issues. The financial stake part also makes sense, assuming the party issuing is on the platform, but it also reads like the type of maximalist thought usually associated with blockchain or “disruptive startup” culture. It assumes as a newcomer it can set a new status quo that everyone will have to interact with — even people who are not on the platform. In actuality, as a newcomer you’re an outlier and the type of strategy you have to employ is growth, so you can actually become the status quo.
What does not help growth is artists finding parts of their catalogue on the platform without uploading it themselves and then going through a tedious and risky process to right the wrong.
A more complex economy
Another company I had similar reservations about in terms of being able to stand out as a compelling streaming platform is Resonate, a community-owned cooperative. However what excites me about Audius and Resonate are their visions for a different music streaming economy. In particular, giving fans and artists equal participation in that economy.
Money in streaming flows in one direction and that’s away from fans. It feels like that’s the point, but it’s also a limitation. There’s a reductionist vision that music services are solely about listening to music. Yet what could be created by incentivizing platform participation? What if the $10/month subscription fee was more like an entrance ticket or season pass and there’s additional, optional value exchange happening on the platform, much like in video games?
Some users wouldn’t be able to afford a fee higher than that $10. As a matter of fact, I know music fans who only stream from free services. By participating in the platform’s economy they could still unlock perks they’re after. They could do so by creating value on the platform, e.g. by building experiences, creating fan art and other value for communities, or by participating in platform improvements like the cleaning of metadata or, I suppose, DMCA takedown arbitration.
This type of thing has been happening in games for years. A current prominent example being Roblox (est. 2004), which recently saw Lil Nas X perform in-game.
The starting point isn’t the economy though — it’s to envision what you want players to be able to do in the world created for them. From engagement flow the opportunities to shape an economy (another reason why I’m skeptical of consumer-facing startups whose value propositions focus on the economy more than the user experience). In order to create robust digital economies around music, the likely question to figure out is how to create a compelling platform for fan culture at large.
Then starting by focusing on a specific problem.
💿 If you enjoyed my article about recommendation algorithms for Water & Music last week (paywall), you’re going to love this look into how obscure B-sides can turn into bands’ most popular songs through Autoplay features on Spotify & other popular streaming services.
🤳 While LinkedIn and then Twitter adding a stories feature to their apps annoyed many users, Spotify’s latest story feature probably won’t. It allows artists to enhance albums and add more context to their release. A promo strategy for now — I wonder if this could ever be an avenue for generating more revenue per user inside the service.
🇨🇳 Tencent Music Entertainment has invested in Wave, the virtual concert platform / music’s answer to the metaverse. That investment is a big deal. Here’s why: “Under the partnership, TME will be able to air Wave experiences in China across all of its platforms, including QQ Music, Kugou Music, Kuwo Music and WeSing.”
🏙️ Across their forty investments spread out over yearly batches, Techstars Music have only had one black American founder, and only five startups had female CEOs. That, tragically, is way better than usual representation averages in venture capital. Now, the startup accelerator is doubling down on their commitment to diversity for 2021.
👩💻 Researchers from the University of Southern California and Facebook have been working towards rendering 3D models of people from 2D images and video using artificial intelligence (paper). The results? Quite impressive. The link to music? Way more opportunity for the virtualization of music experiences. You can see the work in an informing & entertaining video by one of my favourite YouTube channels, Two Minute Papers:
🇬🇧 In the UK, illegal raves are flourishing this year and moving indoors into abandoned warehouses.
🎥 Livestreaming company Driift is responsible for some of the more well-publicized concerts in the last year, working with people such as Nick Cave and Kylie Mynogue. Some numbers: a live-streamed concert may involve eighty to a hundred people, costs about $60,000 to produce, which means you have to sell five to six thousand tickets.
🎸 It’s not just labels that have been doing alright in the pandemic. Instrument sales are up and Fender is expecting a 17% year-on-year increase in revenue.
🏟 A while back my co-editor Maarten wrote about a scientific experiment in putting concerts back on called RESTART-19. Now VICE has a small video documentary about the event in Leipzig, Germany that was the staging ground for this experiment:
📢 “Artists don’t need more tools. They need an audience.” Pandora co-founder Tim Westergren launched livestreaming platform Sessions earlier this year. Now, they’re putting aside $75M to digitally advertise concerts on the platform.
Last month I launched a Patreon for MUSIC x. If you can afford it and would like to support the newsletter & other projects, please pop over. Tiers start at $2.50 / month. You can get backstage previews, access to polls, a personal thank you, 1:1s, and hopefully a warm fuzzy feeling.
MUSIC x is founded by Bas Grasmayer and co-edited by Maarten Walraven.
❤️ patreon - twitter - musicxtechxfuture.com - musicxgreen.com