podcasts

Bringing NFTs & Blockchain to TikTok, with Roneil Rumburg of Audius

podcasts

Bringing NFTs & Blockchain to TikTok, with Roneil Rumburg of Audius

Audius reduces the distance between artists and fans, enabling them to connect directly. Learn about their network directly from Roneil Rumburg, their Co-Founder, and the path that they have taken to reach who they are today.

Posted by Bringing NFTs & Blockchain to TikTok, with Roneil Rumburg of Audius - March 2022

Background

Bringing NFTs & Blockchain to TikTok, with Roneil Rumburg of Audius Outlier Ventures

  • Co-Founder and CEO of Audius
  • Comes from a software engineering background. In college, his interest lies in distributed systems, which eventually paved the way towards crypto
  • While at school, his group of friends started a mining operation to mine Dogecoin and Litecoin

I first got excited about crypto cuz I was like, what a great way to earn some beer money.

– Roneil Rumburg

  • In 2013/2014, he co-founded a Bitcoin peer-to-peer payment company called Backslash. Spoke to their users and realized that people wanted to receive Bitcoin and not send it. This led to a broken marketplace
  • After that, he went to Kleiner Perkins and co-founded the Kleiner Perkins’ early-stage seed fund. He covered crypto and computer vision
  • Left Kleiner Perkins to work on Audius in early 2018

Finding His Co-Founder

Bringing NFTs & Blockchain to TikTok, with Roneil Rumburg of Audius Outlier Ventures

  • His Co-Founder, Forrest Browning, was part of that mining group in college
  • Had worked on many projects together for the past 7-8 years before co-founding Audius together
  • They first met each other at a summer camp in high school. Both ended up going to Stanford, where they reconnected
  • Both of them were into dance music, which ultimately led to Audius

The Audio Economy

  • Things like BitTorrent, LimeWire, and Napster demonstrated that it is possible to distribute music content in a decentralized manner
  • Observed what happened to them. Formulated their thesis around Audius that decentralization should be possible, with rights still respected
  • In Audius, node operators are responsible for the content that they host in the network. They come with a mechanism where people can submit DMCA takedown notices
  • Hence, node operators are compliant with all local laws and regulation, while still being decentralized
  • Artists and fans get to directly interact with one another with no intermediaries. Audius is neither able to take away someone’s account nor change the rules of their API
  • SoundCloud decided to switch off their API. Because of that, tools that people have built on it were rendered useless overnight
  • Inspired them to build Audius as audio distribution is fundamentally important to the business of being an artist. Artists should own their means of production

In music, there’s a lot of margin going to people who aren’t necessarily adding commensurate amount of value to the supply chain.

– Roneil Rumburg

  • Increasing digitalization of the music industry, pushing the marginal cost of distribution down. However, artists are not seeing the value go to them

Audius – A Platform Or A Network?

Bringing NFTs & Blockchain to TikTok, with Roneil Rumburg of Audius Outlier Ventures

💡 Audius is a decentralized SoundCloud

  • Would like to call it a network rather than a platform
  • At a super high level, Audius is a digital streaming service that connects fans directly with artists and their exclusive new music

The way we market and talk about Audius is just talking about the benefits that it can provide, not the technology stack that it’s built on. Because ultimately, artists don’t care if it’s decentralized, right? What they care about is that they get better access to their fans, more data about their fans, the ability to share as much content as they want.

– Roneil Rumburg

  • Is a network of artists, fans, and node operators that operate streaming services like a cooperative
  • The company’s role is to steward that growth and help support the community
  • Went to great lengths to make onboading as fluid and straightforward as possible. Many of the artists didn’t even realize that crypto is involved

Economics Of Audius

  • Two sides of economics
    • Contributing content and doing work that is useful for the broader network and community. Earning tokens from doing this
    • Charging fans directly to consume content
  • Artists are able to charge fans directly for access to a specific track or maybe a selection of tracks. Audius provides these artists with the ability to set any access conditions that they wish
  • 10% of payments get distributed to people staking the token
  • People can stake the token to run a node to host content, index the metadata, etc. This is how the network is able to fully decentralize
  • The company doesn’t actually make money. Their role is to make open source contributions to the community alongside other community developers
  • If the community feels that they are not doing a good job, they could choose not to allocate them any grant money

Evolution Of Music

  • Consumer behaviour towards music is that it is free
  • Evolving towards another model where the artist’s catalogue is used to draw people in as fans, ultimately monetizing that fandom in indirect ways
  • NFTs as digital merchandise where scarcity can be programmed into it
  • Excited to see how artists use content unlock tools (e.g. can only listen to an album if you hold that NFT)
  • Heard from artists that their biggest frustration is not having the ability to segment their audience (e.g. allowing a subset of their fans listen to a particular piece of music not available to other groups). Audius will be looking into this area

Solving The Supply/Demand Dilemma

  • Jamie has encountered multiple music/audio start-ups in their accelerator. For such start-ups, the problem is always about how they can create enough supply to meet demand, such that it gets the flywheel going
  • Within the first week of launch, Audius reached 30,000 users
  • Eventually, they reached some sort of tipping point that, if a user shows up on Audius, there would be sufficient amount of content (specifically, dance music) for them to enjoy
  • Did not do anything different. Spent their 1st year just grinding and trying everything they possibly could to get people on board. There was no special marketing campaign or special thing that they did that pushed them over the tipping point
  • Finds that it was easier to build in winter rather than today where there’s too much noise in the space

Was The Selection Of Dance Music Deliberate?

  • It was not deliberate
  • Approached artists who had dormant accounts on SoundCloud
  • One of the first genres of dance music that Audius really broke out in was called Jersey Club. It was a small niche centred around Central & Northern New Jersey
  • Added a Jersey Club tag for them. Fans who came to Audius were able to find their favourite artists already there
  • Realized that they can hyperserve small communities that other people are ignoring, and working their way up to the top umbrella category

They were like, oh my god, no one’s ever noticed us [Jersey Club Community] right? Like SoundCloud never added this genre and we’ve been asking them forever and ever. And within like a month of us launching we had kind of like saturated that Jersey Club music scene.

– Roneil Rumburg

TikTok Partnership

  • TikTok recently launched a sound kit product that allows for groups that they work with to push audio content directly into TikTok
  • Previously, what artists did was to hold their phones with the TikTok app to their laptops and playback their own tracks to it. With this integration, artists can now click a “Share to TikTok” button and it would be done
  • More like a programmatic integration rather than a partnership

Bringing NFTs & Blockchain to TikTok, with Roneil Rumburg of Audius Outlier Ventures

This podcast summary was prepared by The Reading Ape in collaboration with Outlier Ventures. The Reading Ape is a humble servant of the written word.

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