Audius and the Future of Music

Transcript

through this so we're going to do a nice speed run presentation here yeah all right five minute wait uh eight minute presentation cool what's going on guys i'm cooper it's very nice to see you all how are you feeling this morning first talk of bcc we're gonna kick it off talking about audience and the future of music so first of all who am i my name's cooper i do a bunch of work in crypto today i'm going to be speaking on behalf of audiences centralized streaming protocol outside of that do a lot of dowels work with the dial called friends with benefits one called pleaser down which is an ft collector dao rac social token manager work with a lot of creators on crypto crater crossover and advisor to variant rallies area on the defiant bunch of

other crypto projects i do a lot of token and governance design through fireeyes so i'm very well versed in this topic but today i want to speak about you know what is happening in the music industry with crypto today and what are we doing to help change this so today we're going to talk about audience what it is and does why it's necessary how we're building for mainstream crypto new competitive landscape and then talking a little bit about community ownership at scale so today i want to walk away from this talk having you guys with a good understanding of what audience is and then hopefully think a little bit more about how this applies to the music industry today so audience foundation for a new music industry owned by its artist what does this mean in the world that we have today there are a bunch of streaming platforms out

there most notably spotify soundcloud is some examples but these platforms are not historically owned by their artists there's a small set of stakeholders making most of the decisions what we're looking at audience is a system where the artists actually own the platform using a lot of the core tenants of crypto like governance and community ownership so today what i want to tell you guys about is how we're approaching this problem and how we've been able to find a product market fit with users who are not in crypto but are very excited to learn about what we're doing we've got a bunch of co-artists on board most notably from the electronic and rap industry so if you guys are familiar with edm we have some big guys like dead mouse and skrillex on there now getting a lot of people like rappers on board but overall just seeing a lot

of really great adoption for people who you wouldn't normally see in the crypto industry but i've designed the product in such a way that we abstract away a lot of the stuff that makes it complicated to get started in favor of using mainstream adoption this is a look at what the app looks like today you can see obviously it doesn't look like it's too much crypto there's no requirement to have a wallet to get started email and password login all very very simple and so what we want to accomplish with this product is basically building something that makes it very easy to use you don't have to have any crypto knowledge required to get started and give someone a look and feel that's very familiar to what they're used to today launched this in about 2019 and so far we've had some really incredible growth

you know i'm very proud to say that we now have about five million monthly active users which the best of my knowledge is one of the most used crypto applications on the planet right now as i said before i believe this is very much due to the fact that you don't need to know anything about crypto to get started you're able to sign in email and password stream music as you know and love upload and if you want to do some cool crypto stuff under the hood that's for you to do but it's not necessarily required to get started in the first place so i want to talk a little about why we're building this problem you know i basically said at the top of the talk here that a lot of the music industry today is predicated with a set of small stakeholders but more importantly

a lot of what happens in music today is that uh you know payments and royalties are very abstracted away oh there's no slides behind me all right um and basically only about 12 of the total music revenue is captured by the artist and so what we're looking to do is basically change the system to allow a vast majority of that revenue to be captured by the artist itself thoughts on slides we're figuring it out all right now everyone's gonna need to picture the slides in their mind as i'm uh talking through this here all right we're just gonna run with no

slides because there's not a lot of time here so basically artists only capture about 12 of the total music revenue today give you a picture of what this looks like when a track is 300 on spotify you don't see a payment for about six months this goes to a black box that's controlled by labels in the industry after a long period of time maybe you're able to claim your revenue from that but long story short it takes a very long time to get paid and more times than not you actually don't see a lot of that payment that you're originally expected to have there's a lot of middlemen in this industry and it's something that's very right for disruption in crypto and so we're very thankful and happy to have the systems in place today to be able to solve that so here's just a quick look

at what some of those different cuts are you know obviously this is a very over exaggerated example just to help highlight the picture but long story short there's a lot of people in the middle getting paid along the way what we hope to create with audience is a system where you're paying artists directly and able to help them out to make sure they get paid faster and more efficiently so you know like i said before with streaming you know there's a lot of payments that are happening in music but unfortunately a good amount of that is actually going directly back to the people who create the systems rather than to the artists themselves so what we wanted to do here is try and figure out a way to make sure that a lot of that revenue is going back to the artist a quick example i like to point out here

is if spotify is getting paid 88 of any given stream we want to invert that on its head and make sure that artists are receiving about 90 and that additional 10 is going to the users who are helping to secure the network so audience is a platform take zero percent on any monetization on the platform and instead that goes directly to our node operators our artists and our community members who are making and powering the platform obviously though we're not alone you know we're in an industry an hour there's a lot of great tools for creators i'm not going to sit here and try and say the audience is the only one trying to accomplish this you see everything from merchandise and record sales you know audience on the distribution side to ticketing from places like yellow heart and po-op which we all know and

love so thinking about the bigger picture here it's not just about audience there's a lot of other tools out there that are trying to help creators get paid but i am very happy to say that audio sits in a very unique lane where we're focused on digital distribution so what this means is similar to spotify if you want to go and find a track stream it for free in a fraction of a second be able to go on audios and find a catalog from a lot of artists that you know and love along with up-and-coming artists that are looking to build a name for themselves and build a community around that so above on the top merchant record sell side of things you know i do want to highlight nft social tokens there's a lot of really incredible things happening out there right now and ways for creators to get

paid and i'm happy to say that on audience we're sitting at the center of all that looking to find ways to identify what's valuable to artists and build that into our platform to support it even if you don't have a meta mask even if you've never used crypto before you know our intent is basically to allow you to find out what's happening in crypto be able to access that without ever having to done it yourself the one thing i'm really excited about is that we're no longer in a niche industry anymore a couple weeks ago we saw a big acquisition of square acquiring title for those not familiar title is a music streaming platform that was owned by jay-z and to me this was a really you know significant event because we saw jack ceo of twitter ceo of square recognizing that smart contracts exist

recognizing that ethereum existed and now we're seeing a big push for them to collaborate on helping to get artists paid so when people ask me you know what is audience who are its competitors in the industry today i actually look beyond the existing players and the crypto ecosystem that you'd see on coin gecko and instead look to something like title is someone that we're looking to help empower artists with and sort of compete together to make sure that this industry is bigger as a whole you know one thing i'll call out is last week jay-z changed his twitter icon to a cryptopunk there's a fantastic twitter space talking about the future of music talking about the future of data ownership and to me i think it just signifies that although it's very very early it's very clear to me that the players that exist today are recognizing there's

value to this industry and doing everything they can to keep up you know what i will call out though is audience having been started in 2019 i'd like to say we have a pretty good jump and foundation here you know everything we've built is built on web3 rails the entire system is built from the ground up with distributed file storage with content storage and node providers and so when you think about a big player like title coming into the picture there's obviously an opportunity for monetization but one thing i'm very happy about is the fact the audience has the rails to support all this new technology so things like i said before nfts social tokens governance staking the whole nine yards that's just v1 of what we see today and i'm very happy to say that as stuff comes in the future we're going to be here to be able to

build and support that but unfortunately you know it's going to take a long time to get there i don't think that we're in a spot today where people are able to understand what's happening with crypto most of the time obviously everyone in this room is very familiar with something like metamask but if you go and tell your friend to download it they're going to think you're insane still and so what i'm very happy to say with audience is that we've built a system where there's no requirement to know anything about crypto there's no requirement to have to store a seed phrase we basically help users get started in about five minutes with an email and a password login but under the hood every single account has an ethereum wallet baked into it and so if you're able to come to the platform you want to poke around with

some of the cool crypto features we have like connecting your wallet to display your nfts you can go into your profile at metamask at a wallet connect wallet and see everything that you've done in the wider crypto ecosystem without ever having to need that to get started in the first place what i like to say that this helps with is if you are an expert and you're able to show that you're more sophisticated you can go into your platform you can beef it up you can show people that you're very experienced in this industry but you don't need that to get started what we're excited about here is that with 5 million monthly active users if you're an artist who's selling nfts this is your distribution funnel you know today if you're trying to sell enfts as an artist you're basically screaming into the void on twitter

hoping that someone sees you but with audience if you have a profile with a couple thousand users that are looking for your mixes looking for your content and a few clicks they can find out where all your nfts are go to find them on openc go to find them on foundation superair zora whatever it be click out and go have a fun experience around that you know moving forward i do see a future we're able to support these more natively but i want to highlight that audience today is a very read-only side of things for web3 so if you're looking to do stuff with nfts we're not going to allow you to mint them directly in the platform but we are going to empower our partners at these other platforms to allow them to do what they do best but we do what we do best

so one thing i really want to highlight here is there's a lot of ways to earn ownership in the platform i think this is fundamentally the biggest thing that separates audience from any of the players that exists today namely in the sense that you can earn tokens representing ownership in this platform simply for being an active user the parallel i like to make here is what if you're on soundcloud in 2013 and you're able to own equity in that network for all of the value that you create as an artist we saw an entire generation of electronic acts basically make a career on the back of soundcloud and unfortunately none of them ever saw a cent when soundcloud went ahead and raised a 700 round so what we're building with audios is a new system where you earn ownership in the platform as you're an active user

of the protocol some things that i'll highlight here trending tracks playlists and underground so every single week if you have a top five track on the platform you earn 200 audio if you're an ap api provider who's streaming a lot of content to the platform you are an audio for doing that on a consistent basis if you want to get a grant we've set up an audio grants committee that's community run and operated by artists in the community to apply for a grant be able to give people prizes for things like remix contests live streams blog posts whatever it might be and so it's not about just having a top five track on the platform we want to create systems that regardless of how big you are as an act you can always find ways to earn tokens for usage of the platform this is going to grow over time

consistently as we add more ways to monetize and more ways to earn this ownership another thing i'll call out is staking and delegation so on audience today we have a front-end client that's completely non-crypto native you have an email and a log and password under the hood everything that's stored on audio is stored in a decentralized file storage system that's owned and operated by node providers so i can stake audio be able to run a node and as a delegate of that i can delegate my audio to them and then earn issuance in the platform right now this is sitting at about 25 apy per year this is something that feels like a very nice compliment to those who are more crypto native so you can come into the platform earn ownership for streaming tracks take that token and delegate it to a node operator and earn inflation from the

value that you're creating this is just one way that we like to create systems for anyone to earn ownership regardless of where you sit in the stack but also make it very democratized you don't have to have technical knowledge required to be able to participate in this network the last thing i'll call out here is a feature called fan clubs this is something i'm spending a lot of time on while it's very early we like to think of the concept of what does it mean to curate to artists that you like very early on in their career as someone who spent a lot of time in music prior to crypto i've always thought about the idea of how can i capture the upside of an artist that i find when they have a thousand followers that audience we believe that tokenized primitives allow us to do this at scale

we're now building out systems to support that where if i come to audience and i find a platform very early on i can take my tokens delegate though to an artist on the platform be able to see upside and private content as a result of supporting them very early on you know this is something that um i'm very passionate about you know sitting at the intersection of mainstream and crypto i live and breathe crypto every day it's what i've done for my career for the past five years and i'll continue to do into the future but i'm very happy about the fact that we're now looking at to a new audience and we're thinking about what does it mean to cross the chasm what does it mean to go and tell people about the core primitives of web3 that we know and love without smacking them over the head and

making them have to deep dive to get started so very slowly we're integrating different crypto primitives that allow people to see and highlight what this is that we're building without having them be required to use it to get started so one thing that i will highlight here in the bottom left that's our nft collectibles feature you can go ahead and connect the metamask wallet to any audience account show all the nfts that are holding in that wallet on the right side here we have vip tiers so if you hold tokens you access different features in the platform this is very similar to token gated access on discord as if it lived natively in the platform and so what i envision is instead of having a membership or you're paying a fixed cost per month to something like spotify you simply hold tokens in the network

and so long as you're representing ownership in that you're going to access features and benefits that allow you to have a better experience on the audience platform like i said before i think things like staking governance and access are super super important but i want to highlight that it's not for everyone so making sure that we have clear tutorials on how people can go deeper as they want to go deeper there's just one way that we're thinking about helping out the artist today being sure to support the artists that come tomorrow we have an open api so for the developers in the room if you guys want to build on top of audience we encourage you to do so there's incentives in place to be able to stream content uh to audience you know we have a front end right now that's hosting about 5 million monthly

active users i'm very happy to say this is an open protocol so if you're a game if you're a twitch partner if you're anything that likes to play live audio to support underlying content there's an open api with all the content available on audio open and ready for you to be able to stream this is very different from an api pull from something like spotify we need to know someone at the company or be able to have a special end to get started we're creating an open protocol so it's not just us at stock co-let's building you know we see a future very similar to d5 where there's dozens of interfaces hosting this music there's very different ways to display it what we wanted to create is an underlying protocol where all this content exists for now and forever and allows anyone to access it at their

own free will that's all i got for you guys today i know we're a little bit short on time so i want to leave a couple of minutes for questions but thank you all very much for coming out appreciate it we're right at times i'll give uh one question if someone has it go ahead right now it's completely free there's no royalties being paid on audience it's all free to play basically the same as soundcloud was early on and over the next year or two you're going to see systems where you might pay a fraction of a cent to stream that's going to be completely on the artist to decide whatever they want to set their own streaming rate at you're owning uh you're earning audience

tokens for the activity you have in the network and like i said monetization's going to come in about a year or two from now when we have some systems built out for that cool thank you guys very much appreciate [Applause] it you