The Wolf Of All Streets - Creators Are Getting F*cked. Empowering Them Through Web3 | Roneil Rumburg, Audius

Starting point is 00:00:00 My DJ and music production career effectively ended when I was deplatformed from SoundCloud. Seeing that very problem, Renil decided to go ahead and invent Audius, a platform that allows the musicians to monetize their content without the fear of being removed. This is a topic that's very near and dear to my own heart. It's actually what basically led me into a career in crypto, so you definitely don't want to miss this conversation. In my former life, my pre-crypto and podcasting career, I was a DJ and a music producer for about 20 years. And SoundCloud was my core base.

Starting point is 00:00:48 And I had tens of thousands, hundreds of thousands of followers, tens of millions of streams. And the death of my entire career was being removed from SoundCloud. For so many people, it was, right? And there was no recourse there. There was no even transparency whatsoever into what policies were driving all of that. It was just the artist community was completely taken for granted there, despite being the source of all of the value on SoundCloud, right? I mean, that was the inspiration that led us to building Audius was like, you know, I was just a big dance music fan. And I saw all of my favorite creators either like getting kicked

Starting point is 00:01:23 off of SoundCloud or choosing to leave SoundCloud from 2014 to 2016 or so. And yeah, that was what led my co-founder and I to say, I mean, there has to be a better way to include artists in that policymaking and in that approach to actually operating these streaming commons, right? Yeah. So I've been a very big fan of what you're building. Basically, since the very beginning, I worked for another company that was not crypto-based, that was trying to do the same thing and somewhat failed. But it's very near and dear to my heart, obviously, because A, I was removed, which meant my widgets were removed from every blog, everywhere. The music was basically erased from the entire internet. But B, I was never able to monetize that content. So talk about how you can actually do that as an artist now. Yeah. So on Audius and really broadly across this Web3 music movement, but I can talk to

Starting point is 00:02:17 Audius specifically, you can gate access to content on tipping and other mechanisms to actually charge your fans to access portions of your catalog, things like that. Yeah, the use cases of Audius that we've seen to date, about 7 million fans listening every month right now, around a million tracks shared so far, have been a lot of the stuff that you probably used to use SoundCloud for and see SoundCloud be used for, like people sharing, you know, works in progress and, you know, the beat I made over the weekend, see what my fans think of it. It's the stuff that like super fans just go wild for, right? And that audience we found also has a very high propensity to pay for things because those are,

Starting point is 00:03:06 like, that's the segment of, like, your fan base back then that was, you know, probably, like, going to all of your shows and, like, religiously following everything you say, everything you do. And yeah, so, you know, at a super high level, like, the thesis of Audius was just to create a direct relationship between artist and fan that no one could take away from them, right? In the way that your entire fan base and ultimately like your ability to reach your community was ripped away from you by SoundCloud. In the case of Audius, it's not possible for us to take that away from you, right? You will retain access to your fans for, you know, for as long as you want to

Starting point is 00:03:46 keep using these tools, right? Our company could go away and it would all still keep working. Well, how does that work? Yeah. So it's the way Audius hosts content, distributes content, and, you know, helps artists monetize content. All of that whole end-to-end flow is decentralized. So it's being run by community members of the Audius ecosystem who run servers and help curate content. All of the way, everything from content hosting to content discovery is community run on Audius. And yeah, putting all of that together, the little team that I work on and run, we build and ship open source content, like code, sorry, that the community is then using to operate this ecosystem. If the community decides we're not doing a good job, they can vote to defund us, fund someone else, fund five teams. They can do

Starting point is 00:04:45 whatever they want, right? This isn't our property. It's theirs. And I think that, like, at its core is what has allowed us so far to be durable to some of the poor decision-making that SoundCloud made, but also has allowed us to kind of, you know, build trust early on with our community that, you know, like, in a way, you don't have to trust us, right? By removing the need to trust our team, we increase trust in this product and ecosystem for our users. If you've been following me for the last few months, then you definitely know that I've been trading and investing on BitGet. Now, listen, it took me six months to decide that they were going to be the sponsor for the newsletter. But once I saw their partnership with Juventus, that they

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Starting point is 00:06:12 slash BitGet. Claim that huge reward and use the world's best trading platform. How do you address copyright claims and issues if you're decentralized? Yeah. So the node operators that run on the Audius network do still have a responsibility with respect to what they're hosting. So they actually run a DMCA process. So those node operators field inbound requests, process them. And I guess in our eyes, there's a distinction between the open community of node operators and content hosting has no obligation to host a given artist's content,

Starting point is 00:06:57 but that should not mean the artist losing their ability to reach their fans and to have distribution, right? And, you know, ultimately, if you as an artist feel that, you know, your like content is being taken down of yours unfairly or unjustly, you know, there is an appeals process. But beyond that, you can self-host your own node, right? It's just a free market for this, right? Like as a node operator, realistically, they don't, you know, they're wanting to, you know, operate this at a scale that, you know, with the liability protections, everything else that the DMCA provides. But, you know, you as an artist can disagree with that if you want to, um, you know, to date though, we haven't seen, you know, folks have issue with it.

Starting point is 00:07:49 Honestly, I think the difference in audiences, the audience ecosystems cases that this is all transparent and well understood. It's understood when that's happening, why that's happening. There is an appeals process that functions unlike, you know, probably when you appealed things on SoundCloud. Six months later, it was like, you know, you appeal things on SoundCloud. Six months later. It was like you're sending an email into the ether and nothing's happening. So yeah, we think this approach is working and will continue to work.

Starting point is 00:08:16 So you can have a track taken down or rejected, but you're not going to be deplatformed. Yes. Yeah. So it's more of a case-by-case basis. On SoundCloud, they could take one track down, and then that would be a sweeping end of everything. And to your point, you wouldn't be able to get it back. Yeah, you would.

Starting point is 00:08:32 And, you know, it's not even like on YouTube and other platforms, actually, you can. Yeah, they just monetize it for the original content. Exactly, right? You know, so that's where it's not like it was a legal issue for SoundCloud. It was just poor policymaking and poor decision making and to alienate that core community of folks like yourself that made it special, right? all these playlists I'd made, all of, you know, how, you know, our, all those memories that, you know, my friend group and community had centered around the music we used to listen to when we like through parties and went out and everything else just went away. Right. And, you know, it was one part folks getting deplatformed. It was also one part, you know,

Starting point is 00:09:20 folks losing confidence in SoundCloud and like choosing to deplatform themselves in a sense because, you know, why continue to invest money, time, energy in building a channel that can be ripped away from you at a whim, right? Yeah, but the problem was that a lot of people deplatformed themselves and then none of the platforms they went to ever gained traction. Yes, that's fair. So obviously you hope that you can gain that market share, even though we're years later, and sort of recapture that interest and faith. That's exactly right. And I think doing so with monetization being a native part of the tools here, right? So, you know, to date, Audius has been a really great place to find your first few fans, to build a fan base.

Starting point is 00:10:08 And then for larger artists to, like I mentioned earlier, experiment with things and share, you know, those works in progress, the things that otherwise wouldn't be seeing the light of day. But, you know, we, yeah, in about two years now, two and a half years of product has been live in the market. We have over 7 million people listening to stuff every month. And that growth shows no signs of stopping. hosting an infrastructure team, like it was possible, I think, for this network to scale far, far more quickly than those traditional networks, just because, you know, they were very capital intensive. They required, you know, these big, huge teams and a lot of money for bandwidth costs, everything else that in Audius's case, the community is collaboratively providing and getting paid by the network to do so. And you've also done a partnership with a huge social media platform, correct?

Starting point is 00:11:11 Yeah, yeah. So we had a partnership with TikTok went live about a year ago. And it's a really simple integration. So, you know, it's gonna sound so stupid when I say it, but there's like not an easy way to get raw, high quality audio content into TikTok, right? To a point where like we had artists in our community literally taking their phone and holding it up to their like computer speaker to record their own song into TikTok, right? And so this is just a really simple thing, right? To say, hey, you know, if you've uploaded something to Audius, you can now click one button and push that straight into your TikTok account. And then there's kind of a link back to Audius from that. And it ended up, ended up, yeah, driving a good amount of usage, engagement, and excitement. I think the kind of public narrative around it was kind of a little bit overblown in proportion to this very straightforward thing I described,

Starting point is 00:12:14 which is just a better way to describe it. It was an integration. It wasn't TikTok saying that every song that's ever going to be on TikTok in history is going to have to come from Audius, which I think some people did take it that way. Yeah, dude, I don't know where all this misinformation came from originally. Well, it's 2022, man.

Starting point is 00:12:30 Yeah. I think you have a 99% shot at there being some misinformation. Yes, yes, fair enough. So how does, I mean, now we're seeing, I think, the early iterations of how Web3, and if that's what we even want to call it, because when he created it, there was no such thing as Web3, right? But we'll call it Web3, can empower artists to build their own community outside of this predatory label system that's existed

Starting point is 00:12:58 for basically as long as music has been distributed. What things can we look forward into the future? How can artists utilize this to make sure that they own their own content and can make a living? Yeah, I think it's, you know, so the tools we're building and others in the community are building are a great first step. It's like giving, and I would characterize that first step as giving artists the means to, you know, build and aggregate a fan base that they have control of. I think the next phase that's still a work in progress for everyone is, you know, it's one thing to have that fan base. It's wholly another thing to be able to port it between different places, right?

Starting point is 00:13:41 In the way that, think about someone who runs like an email mailing list, right? Like they can export that list of emails. They can move it from, you know, Substack to like MailChimp or whatever thing they want to use. In music, that doesn't work that way, not yet, at least. And while artists have sovereignty over their data in Web3, there's not yet like a good interoperable standard for, you know, mapping fan bases and fan relationships across these experiences. Audius is seeking to be that. And we're very excited for, you know, I think that's like the next few years of work for our community are centered around that platform opportunity, around fan relationship management, and these monetization tools that we're continuing to flesh out. But I think that's still an unsolved

Starting point is 00:14:31 problem. And, you know, until we can fill in that missing puzzle piece, I think a lot of the promise of this direction of work, of this technology, you know, will not come to pass. If we end up with 50 different siloed sets of fan relationships across different products, we'll come back where we were. You have to be able to bring your fans with you. Absolutely. And do you find that because that's the state of the market right now, that the content that's being posted on Audius is also being posted on Spotify and Apple Music? So it's just another outlet, but not the exclusive outlet for an artist's music? So that's a really good question. Yes and no.

Starting point is 00:15:15 So we do see artists sharing a lot of things on Audius that they're sharing elsewhere. But we actually see them sharing more on Audius and earlier on Audius than they're typically sharing on other channels. Almost a proof of concept. Exactly, right? So, you know, we have a few bigger artists, for example, that, like, have uploaded, you know, weekly works in progress of the same track

Starting point is 00:15:40 and kind of gotten feedback along the way, iterated on it. Their communities will actually, like, you know, same track and kind of gotten feedback along the way iterated on it um their communities uh will actually like you know go track all those works in progress and discuss them in in uh um you know in in the community and say hey you know i like i actually like the old one more than this one whatever and then the artist finally makes uh whatever decision that they're going to with the final version and it's interesting to see kind of like, you know, some portions of community like saying, oh, you know, like, I think the other one was better. I think they should have done this, whatever. Like, but, you know, quite a large

Starting point is 00:16:16 contingent as well saying, you know, like, it feels like it's, you know, it's still not done, right? We need more versions. We need more iterations. So in that sense, we also have seen, I think there's a level of sort of like polish and everything else that artists typically associate with their brands on those major DSPs that on Audius, there's, there's kind of a, um, I don't know if this, this is maybe just the, uh, ethos and, and sort of full out the philosophically how our community has behaved over time. But, um, there's not that same level of like seriousness, right? It doesn't have to be on its fifth master and radio ready and sound good in your car and on your TV. Exactly. Yeah. And, uh, uh, yeah. And we see folks

Starting point is 00:17:05 uploading, you know, like, oh, I made a random beat when I was like high yesterday. Right. That's, that's the stuff that like super fans love hearing, seeing, engaging with. And, um, yeah, so, so we do, I think it's, it's, it's a, uh, it's a disjointed use case from what people are using those major DSPs to do. Um, do. And if you want to listen to the major hits of your favorite artists, Spotify is a great place to do that. We're not trying to compete with them. What we are trying to create is kind of a commons for that any and all content that an artist may want to distribute and or gain access to for that sort of longer tail of their catalog. So you don't necessarily expect to be a Spotify competitor, so to speak.

Starting point is 00:17:51 You're not a platform where people can grow a super fan base and then engage with them. My wife is in internet marketing. And when I was, you know, kind of in the core of my career, we always talked about the fact that if you had maybe a thousand super fans, you know, kind of in the core of my career, we always talked about the fact that if you had maybe a thousand super fans, you could build an entire career just off of those thousand people. And I don't mean that in a predatory or negative manner, like it sounds, but if you have a thousand people that will tell their friends and will consume everything you have, but back then that meant selling them a CD or a t-shirt and shipping it to them. There was no way to monetize that directly. Not at all.

Starting point is 00:18:26 And there was no way to even keep track of those relationships with your fans. I mean, think about it. Like 20, 30 years ago, if you were an independent artist producing your own physical records, you still had to find distribution through retail shops, swap meets, all of those. Literally walk into every single store and convince them.

Starting point is 00:18:49 Yeah. But then you don't know who's buying it on the other side. You have no clue. You have no ability to reach them. I would argue that the status quo today on Spotify, Apple Music, and these major DSPs is no different. You don't know who your fans are. You don't know where they are. You don't have any ability to reach them. And as a broadcast medium and a mass audience medium, that's okay. But I think it's going to be challenging for those products and product experiences, you know, where they don't even have a relationship with the artist typically, right? They're receiving content through a professional distributor, and then they're paying out through either that distributor or the PRO or, you know, whomever, right? You know, the DSP has no relationship with the artist, and therefore, you know, the artist has no nexus of understanding towards what their fans are actually doing.

Starting point is 00:19:42 There's too many layers sitting in between all those folks. And yeah, to your point, the thousand true fans should be possible today in music. It is possible in other forms of media, but music is still, they're still not a good place to actually monetize a fan base in that manner. Right. Um, the folks who use Patreon and, and, uh,

Starting point is 00:20:08 we actually know of some musicians using OnlyFans too. And, uh, like they, that kind of, uh, the core issue with those channels is they're like having to beg people on their socials and, you know, whenever they do get an audience to say hey like go find my patreon go find my you know like back in the day when when the running joke was like uh uh you know go listen to my soundcloud like on twitter and those uh social channels people would drop soundcloud links everywhere kind of feels like uh that's what's having to happen with uh folks who are using. They're just having to beg.

Starting point is 00:20:48 Yeah, the innovation of SoundCloud that nobody talks about is just the widget. Yeah. It's like the ability to put your music all over the place, which is why actually it still blows my mind that MySpace failed because they actually had the music player that was built in. It was incredible. It was. I mean, they were the – people don't give them enough credit. They were the originator of this self-hosted, self-distributed music concept. I guess I came up listening to music in that era, but that was where the music community I was part of at that time, the post-hard and like metal, uh, uh, kind of community was all

Starting point is 00:21:26 on my space. Actually I'm dating myself. Say I'm 45 years old. So I still remember who was in my top eight. Um, which is hilarious. I remember I started when I started dating my wife, when she told me I had to put her into my topic. I remember it, remember it vividly. So what you're building, is it as applicable for a huge label artist as it is for an independent artist? Or is there conflict sometimes with the labels potentially? Because I know a lot of artists are under certain kinds of contracts and restrictions of what they can and can't post in different places. Yeah. So today, Audius is predominantly really all used by independent artists. So it's folks who own their own rights, both master and publishing. It's just much more straightforward for them to share on a new platform that way, right? There are some labels experimenting

Starting point is 00:22:20 with Audius that we're aware of, and we're excited to see that happen more. There's no technical reason these things have to be mutually exclusive. I think it's just that, you know, labels and institutional folks generally move a little bit more slowly than the independent artist, right? The independent artist, if, you know, they can try low stakes experiments, you know, with very little kind of, you very little to lose if things go wrong, the institutional folks, it's like, oh, there are 15 people that need to say yes and you need to go through all this, whatever. Which is not to say there's not a desire from our community to work with them though, right? I think, you know, these, that promise of directly engaging a fan base, growing it over time, and owning the ability to monetize it, which we feel will lead to, you know, and this is actually already proven out to date, like a fan on Audius being more valuable financially to you as an artist than a fan on another platform. No question.

Starting point is 00:23:26 You know, all those things apply equally well to larger and institutionally, you know, managed artists as well, right? It just takes more time. Are you talking about how slow they are, these behemoths? Anyone who's in music would know, and most people don't, talk about a slow process. Let's talk about royalties. Yeah. Sound scan, right? I mean, you wait six months to find out how many people listen to your thing to get your like $4 check. And that's if you're domestic, right? Like if someone in the UK listens to your music talking years, and yeah, you have no idea. I have a friend who was, you know, for a brief period from like 2005 to 2007, eight, you know, a pop artist.

Starting point is 00:24:10 And he had a few a few hits go, you know, get get some pickup and large listenership worldwide. He still gets royalty checks today for radio plays that happened in like 2007. He'll get a check for like 80 cents from like Estonia or something, right? And he's like, I don't know who played this, when they played it, how. There's just like money showing up. You also don't know if it's accurate. Yeah. And these are all- Talking about having to trust a third party.

Starting point is 00:24:41 Yeah. It seems arbitrary. You just get a check every once in a while. Oh, it's completely arbitrary. These are all edge cases, to be fair. But even in the best case, let's say you're an American artist, you're using an American distributor, or working with American label and distributing on an American DSP, so all in the same country, you're still talking six to nine months to, you know, from listening happening to money in your pocket. And you have no visibility into what drove that number, right?

Starting point is 00:25:10 Right. You're just getting a check. And it's like, well, you know. It's so true. Every once in a while, you just get a bigger check. And it would have been great to have understood where that happened so that you could have maybe capitalized it or leveraged that for another song or marketing efforts. A hundred percent. And, uh, and, and that's where the power of like owning that relationship with the fan kind of comes back, right? Like on, on audience, you could actually, I mean, the, this tool doesn't exist today, but the data does exist and is exposed to you as an

Starting point is 00:25:40 artist. You could, for example, say like, who are my fans in Cleveland? Like, I'm going to play a show there next week. How about I offer my top 10 fans in Cleveland, like the ability to buy a ticket in advance before anyone else does, right? Like that's, that's possible when you have that data and understanding. You know, one of the craziest stories I heard about like the traditional DSP latency around data, um, because there are, uh, institutional folks that have that data in real time. The artist is just the one that doesn't, um, people will actually like front run artists in, uh, the process of signing them or re-signing them. Right. Like imagine if, if, um, you know, I'm a, uh, a label and you're an artist, I might know that you're breaking before you yourself know that you're breaking. And it's just wild.

Starting point is 00:26:32 It's wild. That data should be on a level playing field and openly accessible to anyone the artist wants to share it with. So let's say that you dominate market share, this becomes a behemoth as big as you could ever dream of. What is the grand vision of what Audius would look like in that situation? Yeah. So 10 years from now, you know, we, like Audius or no Audius, we think the way the music industry is heading is towards this economy predicated on direct engagement, direct financial engagement, right? Where you as an artist are able to sell merch, concert tickets, content access, you know, fan club access, ability to engage with you directly to your fans and at a scale where,

Starting point is 00:27:19 you know, you're, you're able to, to manage that without like, you know without going and talking to every single fan, right? Where Audius fits into that vision of the future, though, we see Audius being the foundation of that artist-fan relationship, like the sort of fan CRM of sorts you could think of it as, right? We really think, you know, the core of your relationship with your favorite artists is you like their music. That's why, you know, the way Audius as a product has been across all of the different product experiences and touch points you have with your fans. The audience core product is not going to do all of those things, but the relationships that you have with fans that you could build up here should have value across all of your touch points and vice versa. You know, again, because it is this community owned commons, it's not like, you know, as an artist, you have control of all of that data and all of that, all of that kind of channel power that comes with it. You know, there's, there's, you know, there's, there's sort of kind of a, in our eyes, a clear path to getting to that future of where a ticketing company would want to allow folks to market through this channel or a merch company would want to allow people to effectively increase their credibility score in the eye of the artist based on how much merch they're buying, how much money they're spending on that artist across all these channels. We all take for granted in the tech community that you can

Starting point is 00:29:10 understand everything that's happening about your users when you throw a Google Analytics tag on your website and throw your hands up. In music, we're so far from that reality. And that's where we think Audius, you know, will serve kind of a pivotal role for the artists of the future. Well, if Audius had existed in 2015, 2016, we might not be having this conversation because I still might be behind the decks of DJing. So I can only cheer for the future generations

Starting point is 00:29:41 of musicians that this works out and becomes the effective tool for everyone to monetize their audience. But thank you so much. I love what you're building. I can't wait to see the final iterations.

The Wolf Of All Streets - Creators Are Getting F*cked. Empowering Them Through Web3 | Roneil Rumburg, Audius

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