Music’s biggest companies are determined to better monetize ‘superfans’ on streaming platforms. Audius is already doing it.
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Welcome to the latest episode of the series Global Music Business Audio file. MBW Podcasts powered by Music Volley. In this episode, MBW founder Tim Ingham talks to Forrest Browning, co-founder and Product Manager of California-based music streaming service, Audius.
Audius is one of the most talked about new digital streaming startups in the music business today.
Powered by Web 3.0 technology – remember that?! – it describes itself as a “global decentralized music community and discovery platform that puts artists in control”.
What that really means is that Audius allows artists to connect directly with their ‘crazy fans’, while also giving those die-hard fans the opportunity to pay more for the rights. Access to coveted digital products and treats – including rare catalog records or even official rights to remix a track.
Audius boasts over 7 million unique monthly users on its platform and has attracted investment from an impressive number of people – both music artists and music executives.
In 2021, Audius Has been approved One U.S. dollar 5 million USD The funding round includes sponsorships from the likes of Katy Perry, Nas and the Chainsmokers, as well as QUESTION CEO John Josephson, former Music Publisher Sony boss Marty Bandier, founder of Three Six Zero, Mark Gillespie, and all-around music business mogul Guy Oseary.
on this Global Music Business podcast, MBW founder Tim Ingham talks with Audius co-founder and Chief Product Officer, Forrest Browning, about what sets his company apart from other music streaming platforms.
Also discussed: how Audius’s model increasingly fits the opposition from major music company bosses, especially Sir Lucian Grainge of Universal Music Groupto have a better commercial relationship with diehard music fans.
Listen to the podcast interview above, or read an abridged version of Q&A below…
For those who don’t know, Forrest, can you point us to the Audius Quick Start Guide?
Audius is a music community and discovery platform that puts live artists in control. You can almost think of it as a decentralized UGC platform, reminiscent of how sound cloud was back in the day.
It empowers artists to have a direct connection with their fan base and interact on a deeper level than they can on other major DSPs.
Talk to us about some of the ways artists are using Audius to reach ‘avid fans’.
A lot of the things that we can do nicely are supported by Web 3.0, cryptocurrencies and the like. You don’t need to know any of that as a user, fan or artist. But it allows us to provide our customers and users with more functionality than they can get in the normal Web 2.0 ecosystem.
Our place here is, in many ways, all about die-hard fans.
Audius [today] has about 7 or 8 million monthly active users. Much of our early traction was on electronica and hip-hop, and a lot of the artists that have been successful on Audius don’t necessarily put up with the same categories they have on all the major DSPs. [like] Spotify or apple music.
Instead, what tends to do very well on Audius is this kind of grassroots direct interaction – maybe [via] b-side, or long DJ sets.
“Basically, what Audius has built at this point is 7 or 8 million monthly active fans.”
For many DJs, for every 10 songs that win on their album, 30 more are sitting on a hard drive in a closet somewhere, tracks that never came to light for this reason. or other reason. Those things end up on the Audius.
Honestly, places like TIDAL, Apple Music, Spotify… those are great apps for most of your fans. But the problem is [that approach] treat all fans basically the same. It doesn’t allow you to interact more deeply with those die-hard fans who want to really dig in and take it to a deeper level.
Maybe not all your fans are interested [rarities, or the chance to remix your tracks]. But some percentage of your fans totally agree – maybe the top 1% or 5% of your fans will go wherever you put that content because they want to engage on a deep level. more meaningful.
So basically what Audius has built at this point is 7 or 8 million monthly active die-hard fans.
[For example] a lot of electronic artists, when they upload a piece of music [to Audius], and upload the accompanying original files. So what’s interesting is that you can say: For my fans, if they follow me on Audius, they can download the drums or any other aspect of the song. And then you can hold remix contests [based on those samples].
This is the right time in the evolution of the music industry to speak to you. One of the key themes in this year’s MBW report is the evolution of the royalty-free streaming model. I’m sure you’ve seen the letter from Mr Lucian Grange hints at the idea that different levels of fans should be rewarded and monetized in different ways across streaming services. Do you think the music industry is making money by not charging die-hard fans on streaming platforms other than charging regular fans?
Correct. Audius has been operating since late 2019; We’ve been playing this drum for four or five years now. That’s at the core of what Audius does: finding ways to monetize and engage fans on different levels.
You can look back on the past 50 or 60 years of the music industry and the value of a [play] has decreased significantly, almost to zero.
In the past, you might have to buy an entire vinyl record just to be able to listen to a song. After that, there were cassettes and CDs and various developments, then iTunes split up [the album]. And with each step, the value of a particular song – or especially of a particular stream – decreased more and more to the point where you can hear it today. [any] songs on streaming services or YouTubeand supported by advertising [with] small size [royalty payments]basically a [fraction] one coin per thread.
I think the bigger picture, and this is where people miss the forest because of the trees, right? [streaming model] just value every listener at the same rate – including the casual fan. It’s almost the lowest common denominator on how you can make money [listeners].
“There is a world here where people move away from this happiness – where ordinary fans can continue to pay [roughly] what they pay right now on major DSPs, but die hard fans can pull out 5-10 [extra] dollars a month.”
Think of a bell curve – on the right side of the bell curve, the top 5% to 10% of your fans – those are no ordinary fans. Those are the people who are willing to pay a little extra to dig deeper and get additional content or additional access not available elsewhere.
I think there’s a world here where people move away from this happiness – where casual fans can keep paying [roughly] what they pay right now on major DSPs. But the aficionados can pull out 5-10 [extra] dollars a month and get fan club access or special access to content to get more content.
It’s ‘choose your own adventure’. We have reached a point where in the past few years [the value of a stream] frankly, bottomed out. The only place you can go from there is up. And I think we’ll back up and rebuild by adding more options for consumers.
We can’t expect that people will be fine waking up tomorrow and doubling the price they pay for Spotify every month. But I think there are interesting ways you can monetize different fans at different prices. [Casual video game giant] Zynga and all the others have proven this over the past few decades.
Are you excited – or not – to have a company as large as Popular music group start directing its attention to the crux of something you’ve developed over the past few years?
I think it’s awesome! Just to be clear, I think everyone in this entire music ecosystem [to date] acted rationally – especially the majors. Big [record company] DSP streaming revenue has been [growing at] almost in a J curve. So why kill the golden goose?
These major streaming platforms have managed to rebuild a way that [labels] could recoup a lot of the money that flew out the door in previous decades. So I totally get it [why they haven’t challenged the typical streaming model more regularly].
“There are only 300 million people in America. At some point, everyone knew about Spotify; They are paying for it or they have an ad-supported version. only [won’t be] add any person to withdraw the credit card.”
But now you can look at all the numbers, the curves, about [global streaming] subscriber growth and have a saturation point, right? There are only 300 million people in America. At some point, everyone on Earth, or at least everyone in the United States, knew about Spotify. They are paying for it or they have an ad-supported version. only [won’t be] more people draw credit cards. And so the amount you will earn monthly from that normal fan base is limited.
And so it’s obvious [next step]If you want to continue to grow your revenue, then start thinking about alternative monetization strategies. That’s where our audience comes in.
Four or five years ago, when we started Audius, people were like, ‘No – shut up! We’re finally getting the train back on track – everything’s finally settled! Why do we want to shake the boat?’
But now, it’s like, okay, things are so stable that maybe we [becoming] apartments from a revenue perspective. So if we want to get that [growth curve] Go again, we need to find new ways to add revenue.
Very importantly, Audius does not compete massively with existing DSPs. And I think that’s also how brands think about these things: You have to grow the pie, it can’t be a zero-sum scenario.
Hard Question: What is Audius’ most solid USP? As the music industry begins to move towards the discussion of ‘super fans’ mating with economic viability, what’s stopping Spotify or Apple Music etc from rolling out the elements you’re talking about : lock down their service areas for a more passionate fan base, for an additional price?
I think you are absolutely right. I’m sure all the services are available will try to do something to this effect. But to be honest, I’m very confident in Audius’s place in the ecosystem, [so] that won’t be a problem.
Honestly, at the end of the day, anything grows [streaming revenue] Better ecosystem for everyone, including Audius. If the third party [DSP] decide more [Audius-like elements for superfans], I don’t think it necessarily works well; I don’t think they will have the same level of interaction [as Audius]or data transparency [we have] about knowing which of your fans are avid fans, being able to engage on that deeper level, having transparency about what [individual superfans] pay and have [that money] straight to you as an artist, in seconds.
When it comes to Web 3.0, space moves quickly. Really, it’s hard to maintain that status, especially if you’re a Web 2.0 company.
