“SoundCloud on the blockchain?” was the TechCrunch headline last night that made us spit out our tea in surprise. But this isn’t the actual SoundCloud, but rather a new startup called Audius whose business model lends itself to a catchy soundbite.
“Audius is building a blockchain-based alternative to Spotify or SoundCloud,” reported the tech site. “Users will pay for Audius tokens or earn them by listening to ads. Their wallet will then pay out a fraction of a cent per song to stream from decentralised storage across the network, with artists receiving roughly 85 percent… The rest goes to compensating whomever is hosting that song, as well as developers of listening software clients, one of which will be built by Audius.”
The company has opted to take investment – a $5.5m Series A round – in the traditional way, tapping VC firms including General Catalyst, Lightspeed and Kleiner Perkins. The company is founded by Sri Lankan DJ Ranidu Lankage, and like fellow DJ-founded blockchain service Choon, his company is initially focusing on signing up independent electronic musicians.
As ever with this kind of service, the big question is this: leave the blockchain aside and consider the prospects for a fledgling music-streaming service going up against Spotify, Apple Music, Amazon, YouTube and the rest. We await more details of how Audius plans to carve out a niche for itself, especially if (as is the case with a number of blockchain startups of this ilk) it’s restricted to working with artists who don’t have any label, publisher or collecting society ties.