Audius isn’t as big as other streaming services like Spotify and Apple Music, so everyone was surprised when the short video giant company, TikTok, has recently announced a partnership with this crypto-based digital music streaming startup.
The decentralized streaming service of Audius was the first-ever music platform that was granted a direct migle with TikTok’s sounds kit. Audius is now responsible for managing TikTok’s expansive internal music library.
This partnership allowed Audius’ artists to upload their music across TikTok’s platform, giving a chance to other creators to make full use of their tracks in videos and boost their reach on the platform.
Audius is the first-of-its-kind to run on a blockchain, which means there is an insane opportunity that waits for this blockchain start-up.
What is Blockchain?
Blockchain is a technology that made storing and transferring data records possible without the help of central authorities.
The transaction data on the blockchain ecosystem are stored individually and are called blocks. These blocks connect sequentially when linked by timestamps and chains, which are unique identifiers.
When it comes to music, the blockchain system assigns unique codes to every song and clears the records every time a song is played. This means that there will be more transparent and streamlined payments because of the decentralization.
On a famous streaming platform like Apple Music and Spotify, they use pro-rata in paying artists. This business model allows artists to have a cut from the overall monthly revenue of the platform coming from the subscription fees and ads. The payment will depend on the frequency of having their music played.
The pro-rata model sounds too good for artists. However, it has been criticized by some independent analysts and artists since it promotes income inequality among artists.
Popular artists will have the majority portion of the monthly revenue, while those who aren’t really famous would receive a small fraction of the monthly revenue. The pro-rata payment model gives a higher position to the superstar economy.
SoundCloud is also a traditional music company that has quite a lot of middlemen, so even when an artist’s music makes money, they can barely have it due to the cuts that the middlemen make.
In SoundCloud, digital music creators can make a 55% net revenue share for the music they upload.
Let’s say an artist makes $1000 with the platform, only $550 will be given to the artist, and the rest will be for SoundCloud. This is where Audius comes in.
Facilitated by the blockchain system, the crypto-powered streaming service makes use of the user-centric model.
The user-centric model permits artists to receive revenues that are generated by people who directly stream their music. Hence, there is a bigger opportunity for artists to earn without the need to compete and split up revenues against other superstars.
If artists on Audius decide to monetize their money, they will be receiving 90% of the streaming revenue. Only 10% is given to the platform for the maintenance of the operating notes that host Audius content.
An artist name Tory Lanez has sold 1 million copies of his NFT album in just 1 minute. He made millions on his own, and he was able to achieve this because he cut off the middlemen.
Although the biggest streaming players in the industry refuse to turn their backs on pro-rata payments, there is French music streaming that lays a bet towards user-centric payments. TikTok tread on the heels of it.
TikTok is Playing Huge
TikTok is massive and it is not a secret. Over the past few months, when the pandemic hit the world, TikTok has given a platform for content creators and musicians to showcase what they can do.
With more than 800 million active users around the world, TikTok is considered the world’s biggest short video platform. It has grown to be a valuable force in the music industry. Now, we are seeing TikTok haul up to the next level with the new partnership.
Artists need help from a publisher from companies like TuneCore or CD Baby to put independent music on TikTok. Of course, there’s a charge for that, and the middleman could even take a cut from the revenues.
By the partnership with Audius, an independent artist can upload his/her music directly on TikTok. The artist needs to upload the music first on Audius, then upload it on TikTok through the platform.
A blockchain system research claims that technology can help in improving tracking of intellectual property, helping independent authors to have higher royalty payments for their work. This may be true for blockchain-based music as well
Outside the Box of Music Censorship
If we would come to think of it, global censorship of music is already part of our lives. For instance, Iran banned rapped music, making underground scenes flourish.
More than the opportunity of having people to grow their platform, the partnership between Audius and TikTok signifies freedom for artists.
If we think outside the box, music isn’t just about being famous and making money from it. It is also about freedom of speech, and freedom of music.
Hence, having a platform where you can freely express the melody of your heart is the best thing Audius brought to the surface.
Audius’ Stumbling Block for Artists
Big streaming platforms like Spotify pay their artists in cash. So, it is safe to say that the value of money is guaranteed. On the other hand, Audius is backed by blockchain transactions, so it uses its in-house digital currency called $AUDIO.
$AUDIO is a cryptocurrency that is stored within public ledgers, instead of a centralized institution like a bank. Hence, its value varies depending on its performance in the market.
Given that the cryptocurrency market is extremely volatile, if the music creators would receive payments in $AUDIO, there will be no guarantee that the amount they will receive will have a good value against the traditional money.
The price of cryptocurrencies like $AUDIO fluctuates, so there is no telling if artists would receive fair compensation. On the bright side, if $AUDIO is performing really well, the artist may receive more than enough of their original compensation.
Is it Good to Buy Audius Stocks now?
Probably not. Just like buying other cryptocurrencies out there, buying Audius after its 90% pump up because of its partnership with TikTok is risky. The best time to buy cryptocurrencies, in general, is before its pump. Buying them during and after the pump is a high risk as history has shown.
Audius’ price has jumped up to $3.94, but now it is around $2.98.
Pumps usually happen because of good news. If the stock was really not good, it will decline in value after the news dies down. However, if the stock is actually good and could go long-term, you could wait for it to settle down before buying it.
Currently, there are over 100,000 artists on the platform including famous personalities like Diplo, Weezer, Skrillex, Odesza, and deadmau5. Some small-time artists may lay up more exposure because of the partnership.
Audius’ collaboration with TikTok is not just a massive deal for the platform itself, but for the entire cryptocurrency community. It shows the adoption of prevailing adoption of blockchain-based companies.
