In a groundbreaking episode of Validated, host Austin sits down with Ray Jacobson from Audius to explore how blockchain technology is revolutionizing the music streaming industry. As a decentralized music marketplace, Audius is at the forefront of empowering artists and reshaping the relationship between creators and fans. This in-depth discussion delves into the technical architecture, user experience, and future vision of Audius, highlighting the platform's innovative approach to music distribution and monetization.

What is Audius?

Audius is a decentralized music marketplace that leverages blockchain technology to create a more transparent and artist-centric ecosystem. Unlike traditional digital streaming platforms (DSPs) such as Spotify and Apple Music, Audius aims to eliminate the layers of intermediaries that have historically separated artists from their fans. By utilizing blockchain, Audius provides unprecedented levels of openness and direct artist-fan relationships.

Ray Jacobson explains the core mission of Audius:

"We see that in music, the evolution of time, especially with how we see DSPs today, the Spotify, Apple Music and so on and so forth, have built many layers. Over time we've seen just layers and layers of black boxes being built between the artists and the fan that have pulled them further and further apart."

The Audius Advantage

Audius sets itself apart from traditional streaming platforms by offering artists greater control over their content and monetization strategies. The platform enables various innovative features:

1. Direct fan engagement
2. Customizable monetization methods
3. Remix competitions
4. Pre-release options
5. Transparent accounting

These features are designed to empower artists and foster deeper connections with their audience. Jacobson emphasizes the importance of this approach:

"We think we can give artists a bigger say and a lot more control in how they choose to monetize in a marketplace, how they choose to find their fans, whether that is anything from hey, I wanna charge $5,000 for my latest album release and only drop it in the Bermuda Triangle for one week and then remove it or do something as normal as like, hey, I want to let people subscribe to me and listen to content that I upload for the sort of couple dollars, $10 a month that is expected elsewhere."

Blockchain as the Foundation

The use of blockchain technology is fundamental to Audius' mission of creating a more open and transparent music ecosystem. By leveraging blockchain, Audius aims to solve long-standing issues in the music industry, such as opaque royalty systems and lack of direct artist-fan relationships.

Jacobson explains the significance of blockchain in the Audius model:

"We really see the technology of blockchain as a whole, crypto being a piece of that. But blockchain in general is being the biggest unlock from a technical perspective that we've ever seen in this space before. And that can bring in an unprecedented level of openness and transparency and direct relationship between artists and fan that you just really can't get anywhere else."

User-Centric Design

Despite its blockchain foundation, Audius prioritizes user experience, ensuring that the platform is accessible to both crypto-savvy users and those unfamiliar with blockchain technology. The platform boasts over 4 million monthly active users, with the majority unaware of the underlying blockchain infrastructure.

Jacobson highlights this approach:

"We've really taken our time being patient and thoughtful with UX being the number one priority of what we're doing. And I think some of this information is public and you can check out our public dashboard for it. We have north of 4 million monthly active users these days, but the majority of those users don't understand anything about the tech."

Solana Integration

Audius has partially migrated from Ethereum to Solana, leveraging Solana's high-performance blockchain to enhance user experience and scalability. This strategic move allows Audius to offer seamless social experiences and innovative monetization features.

Jacobson explains the rationale behind the Solana integration:

"That's where Solana has really come into the picture for us as a huge unlock. Cause that's where we built all of the cool social experiences and the like in product stuff and all the ways that you can monetize your music and control who has access to your music and do that all in a way that's very seamless."

Technical Architecture

The Audius platform is built on a complex technical architecture that combines elements from both Ethereum and Solana blockchains. The system consists of two main components:

1. Discovery nodes: Responsible for content discovery and search functionality
2. Content nodes: Store and serve music files

Jacobson elaborates on the platform's architecture:

"There's two node types that live with an audience. One of them is this thing called the discovery node, which essentially is like how you find content and audience kind of this like search and explore type service. And the other one is this thing called the content node, which is where we store all of our files."

Artist Onboarding and Experience

For artists joining Audius, the platform offers a user-friendly onboarding process that abstracts the complexities of blockchain technology. Artists can easily upload their music, set pricing, and engage with fans through various features.

Jacobson describes the artist journey:

"You basically log in, you have, you know, a wallet behind the scenes. You're able to like prove your identity to the network by cryptographically signing things and you send your wave files to this one of these content nodes."

Monetization Opportunities

Audius provides artists with flexible monetization options, allowing them to experiment with different revenue models. These can include:

1. Direct sales of tracks or albums
2. Subscription-based access to content
3. Remix competitions with entry fees
4. Pre-release exclusives

The platform uses USDC as the primary payment method, making it accessible to users unfamiliar with cryptocurrency.

Decentralized Audio Protocol

Audius aims to become more than just a music streaming platform; it envisions itself as a decentralized audio protocol for the internet. This ambitious goal could potentially revolutionize how audio content is distributed and monetized across various platforms and applications.

Jacobson outlines this vision:

"We want to pick the best tool for the job. And it's not like, you know, users who got comfortable with not having to log into their music player every time, like know about session cookies and know all those details. Like that doesn't matter. Right. Like the thing that matters is like what they're getting out of it."

Integration with Traditional Music Industry

As Audius grows, it is working on integrating with the traditional music industry, including major labels and publishers. This integration involves supporting industry standards like DDEX (Digital Data Exchange) for content ingestion and developing systems to handle complex royalty distributions.

Jacobson explains:

"Our labs group is working on onboarding the sort of like traditional music partners onto the audience protocol by basically providing a, you know, white glove first head experience of like, hey, we support DDEX and we will work with the, you know, existing systems to help on board content into the audience catalog."

The Future of Music Streaming

Audius is positioning itself at the forefront of a potential shift in the music industry, moving towards a more creator-centric economy. The platform's approach aligns with broader trends in digital content creation and consumption.

Jacobson reflects on this trend:

"I think overall we're moving much more towards this like creator consumer economy rather than the like you know there is one artist that everyone listens to that distributes through this one channel I think it's going to be a couple more fragmented and I think trying to make sure that we build the best tools to lead into that is really like our goal."

Challenges and Opportunities

While Audius presents an innovative solution to long-standing issues in the music industry, it also faces challenges in terms of mass adoption and integration with existing systems. The platform must navigate the complex landscape of music licensing, royalty distributions, and user expectations.

However, these challenges also present opportunities for Audius to pioneer new models of music distribution and artist empowerment. By leveraging blockchain technology and focusing on user experience, Audius is well-positioned to drive significant change in the industry.

The Role of Blockchain in Transparency

One of the key advantages of Audius' blockchain-based approach is the increased transparency it brings to the music industry. Traditional streaming platforms often operate with opaque accounting systems, making it difficult for artists to understand exactly how their royalties are calculated and distributed.

Jacobson highlights this issue:

"Over time we've seen just layers and layers of black boxes being built between the artists and the fan that have pulled them further and further apart. We really see the technology of blockchain as a whole, crypto being a piece of that. But blockchain in general is being the biggest unlock from a technical perspective that we've ever seen in this space before."

By using blockchain technology, Audius creates an immutable record of plays, transactions, and royalty distributions. This transparency not only benefits artists but also helps build trust within the entire ecosystem.

Community-Driven Development

Audius places a strong emphasis on community involvement in its development process. The platform's open-source nature allows developers to contribute to its growth and create new applications on top of the Audius protocol.

Jacobson encourages developer participation:

"If you're a developer who's interested in building on this and building the next killer music app experience and have some great idea about the stuff we talked about today around like monetize playlists. Go to docs.audius.org and take a look at our SDKs there and definitely reach out join our discord if you have you know questions we would love to help you build on what we're doing."

This community-driven approach not only fosters innovation but also ensures that the platform evolves in ways that truly serve the needs of artists and listeners.

The Power of Decentralization

Decentralization is a core principle of Audius, extending beyond just the technical architecture to the very way the platform operates. By distributing control and decision-making power across a network of stakeholders, Audius aims to create a more resilient and fair ecosystem for music distribution.

Jacobson explains the importance of this approach:

"We want to build a protocol that can withstand the test of time and withstand even like our contributions as a contributing company to it and be fully owned and operated by a community that are incentivized to do so."

This decentralized model not only protects against single points of failure but also aligns the interests of all participants in the network, from artists and listeners to node operators and developers.

Innovative Features for Artist Engagement

Audius has introduced several innovative features that set it apart from traditional streaming platforms and enhance artist-fan interactions. One such feature is the ability to host remix competitions:

"One of the other things that's worked really well for us that's been a novel sort of feature offering is the ability to do these remix competitions where you upload files and stem files and other pieces of content that you use to create your works yourself and then for your fans who are also creators for them to be able to use those things and participate in direct engagement."

These competitions not only provide a new avenue for fan engagement but also create opportunities for emerging artists to gain exposure and collaborate with established musicians.

The Economics of Audius

The economic model of Audius is designed to align the interests of all participants in the ecosystem. The platform uses its native AUDIO token to incentivize node operators and govern the protocol. Additionally, the use of USDC for direct artist payments provides a stable and familiar currency for transactions.

Jacobson elaborates on the platform's economic structure:

"Everything is really kind of honed in on this sort of access pattern where some payment has to happen and it's why we've chosen USDC mostly is like the way people directly pay each other with you know a eventuality where you know portion of that is kick back to the rest of the network right now it takes place in the form of inflation but like the people who are running the network are earning on the audio token which is you know essentially like directly tied to how the network is growing overall."

This model ensures that as the platform grows, all participants can benefit from its success.

Addressing Industry Pain Points

Audius is tackling several long-standing issues in the music industry, particularly around royalty tracking and distribution. The platform's blockchain-based system provides a solution to the problem of unattributed royalties, which has plagued the industry for years.

Jacobson points out:

"Spotify famously has several billion dollars in an account somewhere that it doesn't know who it owes money to, but it knows it owes it to someone. Just because the royalty tracking system is very poor across across, you know, music catalogs in general."

By creating a transparent and immutable record of plays and transactions, Audius aims to ensure that artists receive fair compensation for their work.

The Role of Solana in Audius' Success

The integration of Solana into the Audius ecosystem has been a game-changer for the platform. Solana's high-performance blockchain allows Audius to offer features and experiences that were previously challenging to implement on Ethereum alone.

Jacobson highlights the benefits of Solana:

"Solana tends to get a decent amount of like flack from like some parts of the crypto industry being like, oh, that's not how you do it. It has to be much more like, you know, theory and like that's the only way to do things. And for us, we really care if it works for users. And that's what we've focused on. And that's why we've moved some things to Solana."

This pragmatic approach to blockchain selection demonstrates Audius' commitment to providing the best possible user experience, even if it means challenging established norms in the crypto industry.

The Future of Music Consumption

Audius is not just reimagining music distribution; it's also envisioning new ways for fans to consume and interact with music. The platform's approach allows for more personalized and engaging listening experiences.

Jacobson speculates on future possibilities:

"Maybe I don't need everything right but I would actually engage on like a maybe $1 a month to access the entire snarky puppy to biography and flack or something like that."

This level of granularity in content access and pricing could revolutionize how fans engage with their favorite artists and discover new music.

Building for Mass Adoption

While Audius is built on complex blockchain technology, the platform's focus on user experience is key to its strategy for mass adoption. By abstracting away the technical complexities, Audius aims to make blockchain-based music streaming accessible to everyone.

Jacobson emphasizes this point:

"The majority of those users don't understand anything about the tech. And that's been really our bread and butter is like, you don't necessarily need to be a crypto native person to enjoy the openness and benefits of what something like blockchain can give to music."

This approach positions Audius to potentially bridge the gap between the crypto-savvy early adopters and the broader music-loving public.

Collaboration with Traditional Music Industry

As Audius grows, it's not seeking to replace the traditional music industry but rather to collaborate and integrate with existing systems. This approach involves working with labels, publishers, and performance rights organizations to create a more efficient and transparent ecosystem.

Jacobson explains:

"Now more than ever have a lot more deep relationships with partners in the music industry at large, which is pretty incredible for a crypto project in general."

This collaborative stance could be key to Audius' long-term success and impact on the industry as a whole.

The Potential for New Monetization Models

Audius' flexible platform opens up possibilities for innovative monetization models that go beyond traditional streaming royalties. Artists can experiment with different pricing strategies, exclusive content offerings, and direct fan support mechanisms.

Jacobson highlights this potential:

"We've seen this on audience and we've seen evidence with other platforms like patreon that like you're even you know only fans like we see that people are willing to pay subscription fees to individual creators."

This flexibility could lead to a more diverse and sustainable ecosystem for artists of all sizes.

The Impact on Music Creation

The transparency and direct connection between artists and fans enabled by Audius could potentially influence the creative process itself. With more immediate feedback and financial support, artists might be empowered to take more risks or cater more directly to their core fanbase.

While not explicitly stated in the interview, this potential shift in the dynamics of music creation is an exciting possibility enabled by platforms like Audius.

Challenges in Scaling

As Audius continues to grow, it will face challenges in scaling its decentralized infrastructure to meet increasing demand. The platform's hybrid approach, utilizing both Ethereum and Solana, provides some flexibility, but continued innovation will be necessary.

Jacobson acknowledges the ongoing nature of this work:

"We've changed how we think about a lot of the problems that we deal with and work on."

This adaptability will be crucial as Audius navigates the complexities of becoming a major player in the music streaming industry.

The Vision of a Decentralized Audio Internet

Ultimately, Audius aspires to be more than just a music streaming platform. Its vision is to become a fundamental protocol for audio on the internet, potentially powering a wide range of applications and services.

Jacobson outlines this ambitious goal:

"We want to pick the best tool for the job. And it's not like, you know, users who got comfortable with not having to log into their music player every time, like know about session cookies and know all those details. Like that doesn't matter. Right. Like the thing that matters is like what they're getting out of it."

This vision of Audius as a decentralize*d audio protocol could have far-reaching implications for how we create, distribute, and consume audio content in the future.

In conclusion, Audius represents a bold reimagining of the music streaming industry, leveraging blockchain technology to create a more transparent, artist-friendly, and innovative ecosystem. By building on Solana's high-performance network and focusing on user experience, Audius is well-positioned to drive significant change in how we interact with music in the digital age. As the platform continues to grow and evolve, it has the potential to not only transform the music industry but also set new standards for decentralized applications in the broader entertainment and media landscape.

Facts + Figures

• Audius has over 4 million monthly active users
• The majority of Audius users are unaware of the underlying blockchain technology
• Audius uses USDC as the primary payment method for transactions on the platform
• The platform consists of two main node types: discovery nodes and content nodes
• Audius has partially migrated from Ethereum to Solana to enhance user experience and scalability
• The platform supports industry standards like DDEX for content ingestion
• Audius aims to become a decentralized audio protocol for the internet
• The platform allows artists to host remix competitions and pre-release exclusives
• Audius is working on integrating with traditional music industry partners
• The platform's economic model uses the AUDIO token to incentivize node operators
• Spotify reportedly has several billion dollars in unattributed royalties
• Audius supports both independent artists and is working towards supporting major label content
• The platform offers flexible monetization options, including direct sales and subscriptions
• Audius is built with a focus on user experience, abstracting away blockchain complexities
• The platform's open-source nature allows developers to contribute and build applications on top of it

Questions Answered

What is Audius and how does it differ from traditional music streaming platforms?

Audius is a decentralized music marketplace that leverages blockchain technology to create a more transparent and artist-centric ecosystem. Unlike traditional platforms like Spotify or Apple Music, Audius eliminates intermediaries between artists and fans, providing greater control over monetization and direct fan engagement. The platform uses blockchain to ensure transparency in royalty distributions and offers features like remix competitions and pre-release options.

How does Audius use blockchain technology to benefit artists?

Audius uses blockchain technology to create an immutable and transparent record of plays, transactions, and royalty distributions. This allows artists to have a clear view of their earnings and engagement metrics. The blockchain infrastructure also enables innovative features like customizable monetization methods, direct fan interactions, and the ability to set unique access rules for content. By leveraging blockchain, Audius aims to solve long-standing issues in the music industry such as opaque royalty systems and lack of direct artist-fan relationships.

What role does Solana play in the Audius ecosystem?

Solana plays a crucial role in the Audius ecosystem by providing a high-performance blockchain that enables seamless social experiences and innovative monetization features. Audius has partially migrated from Ethereum to Solana to enhance user experience and scalability. The integration of Solana allows Audius to offer features that were previously challenging to implement on Ethereum alone, such as real-time interactions and cost-effective transactions for smaller amounts.

How does Audius plan to integrate with the traditional music industry?

Audius is working on integrating with the traditional music industry by supporting industry standards like DDEX (Digital Data Exchange) for content ingestion. The platform is developing relationships with labels, publishers, and performance rights organizations to create a more efficient and transparent ecosystem. Audius aims to provide a white-glove experience for onboarding traditional music partners onto their decentralized protocol, allowing for a seamless integration of mainstream content alongside independent artists.

What are some unique features that Audius offers to artists?

Audius offers several unique features to artists, including the ability to host remix competitions where fans can access stem files and create new versions of songs. Artists can also offer pre-release exclusives, set custom pricing for their content, and engage directly with fans through the platform. Additionally, Audius provides flexible monetization options, allowing artists to experiment with different revenue models such as direct sales, subscriptions, or pay-per-access content.

How does Audius ensure a good user experience despite its complex blockchain infrastructure?

Audius prioritizes user experience by abstracting away the complexities of blockchain technology. The platform offers a familiar interface similar to traditional streaming services, with features like user profiles, playlists, and search functionality. Behind the scenes, Audius handles wallet creation and blockchain interactions, allowing users to enjoy the benefits of decentralization without needing to understand the underlying technology. This approach enables Audius to appeal to both crypto-savvy users and those unfamiliar with blockchain.

What is the long-term vision for Audius?

The long-term vision for Audius is to become a decentralized audio protocol for the internet, potentially powering a wide range of applications and services beyond just music streaming. Audius aims to create an open and transparent ecosystem for audio content creation, distribution, and monetization. This vision includes fostering a more direct and meaningful relationship between creators and consumers of audio content, while also providing the flexibility for developers to build innovative applications on top of the Audius protocol.

How does Audius handle royalty distributions and payments to artists?

Audius uses a blockchain-based system to handle royalty distributions and payments to artists. The platform has developed a "payment router" smart contract on Solana that manages the distribution of funds according to predefined splits. When a payment is made, the smart contract automatically divides the payment among the relevant parties. This system ensures transparency and accuracy in royalty distributions, addressing the industry-wide issue of unattributed or misdirected royalties. Artists can receive payments in USDC, making it accessible even to those unfamiliar with cryptocurrency.