EDM. That is the first three-letter acronym one hears when meeting Roneil Rumberg, founder of Audius, one of the biggest music platforms in web3. Not NFT, and not DAO. 

Instead, electronic dance music is at the top of this soft-spoken founder's mind. A long-term fan of the genre, Rumberg now helms a streaming platform utilised by millions of fans and artists worldwide.

“My co-founder and I have been dance music fans since 2011,” says Rumberg, referring to Audius’ Chief Product Officer, Forrest Browning. “Our university friend group were regulars in the club scene in San Francisco.”

Rumberg explains how, between shows, he and his friends would take to SoundCloud and Spotify to follow up on their favourite new artists. “We kept running into walls when it came to discovering music and recognising artists. Incentives were completely one-sided, in favour of the platforms,” he recalls.

What is more, just 12% of the music industry’s $43 billion annual revenue heads towards artists directly. Most painful, however, Rumberg says, is that “there was no sense of community being built.” 

It was a perfect use case for the decentralisation that gives web3 its value — but critically, as a means, not an end. In the years since founding Audius in 2018, Rumberg, Browning, and their now 30-person team have created a community of over 7 million musicians and listeners, retaining a strong connection with its EDM roots; 45% of music on the platform stems from this genre, followed by hip-hop.

The goal, Rumberg notes, is not to upstage incumbents like Spotify with the blockchain. His objective is to connect listeners directly with artists, without forcing them to be at the mercy of overbearing intermediaries. Web3 just happens to be the most effective way to get this done. 

“Incentives were completely one-sided.”

— Roneil Rumberg

For musicians and fans alike, how it works is not too complex. When artists upload music to Audius, their content is not tethered to the platform as it would be with, say, Spotify. Instead, it is stored with the decentralised storage protocol IPFS, such that no single intermediary holds custody of the asset. Indeed, everything from artists’ music to their follower counts is hosted and operated by the community, rather than servers that Audius itself controls. 

In turn, Audius becomes a platform where fans and artists can freely interact. Not only is it free from the traditional monopoly when it comes to setting the platform’s rules — the community sets those —, but it provides the functional tools needed for fans and artists to cultivate relationships more directly than through traditional channels.

“We knew when building the first version of Audius that our product had to be accessible to bring in as broad an audience as possible,” Rumberg explains. “The first problem to tackle was identity — how would users manage the keys that they would need to interact with the network?” 

For context, because most patrons of blockchain applications hold onto their content directly, rather than delegating ownership and storage to third parties, they typically have to manage those assets with a virtual wallet and use a complex alphanumeric or seed phrase key to unlock it. But Rumberg says that such a solution was not acceptable for Audius.

“No solution available met the usability requirements we had,” Rumberg explains. “So we designed Hedgehog, a non-custodial crypto wallet secured by a username and password.” 

Rumberg credits this decision as being particularly critical to broadening Audius’ user base: fewer than 10% of its users today arrive with a crypto wallet already set up.

From a general market perspective, tastemakers have taken notice. Audius’ investors include bold-faced names such as The Chainsmokers, Steve Aoki, Lil Nas X, Katy Perry, and Jason Derulo, all of whom Rumberg hopes will significantly further the app’s credentials beyond indie artists and their fans. 

That is not to say it has been all smooth sailing. In June 2022, attackers exploited a vulnerability in Audius’ network governance to steal the equivalent of $6m from its community coffers, a shared pool of funds used to manage shared back-end infrastructure.

Moving into 2023, the value of Audius’ native cryptocurrency, $AUDIO, which users can use to reward artists and vote on governance decisions, is also yet to bounce back from anaemic levels, although, it can still boast that it hit a milestone this year by gaining a listing on Coinbase. Like all crypto, it remains subject to ongoing macro gyrations.

“There was no sense of community being built.” 

— Roneil Rumberg

And while Audius’ user base is enviable in the web3 ecosystem, it remains orders of magnitude away from the paying subscriber count at mainstream streamers, which work just fine for the average Taylor Swift aficionado. 

Accordingly, Audius’ ambitions for 2023 are abundant, including rolling out monetisation tooling. “Even if Spotify were to pay 100% of revenue to creators and rights-holders, an individual stream would be worth a measly $0.0057,” Rumberg notes, suggesting that a fundamentally different model is required to sustain the modern creator economy.

“It’s time for digitally-native business models that increase value per fan interaction.”

— Roneil Rumberg

“Streaming bridged the music industry into the digital age in the 2000s and early 2010s, but it’s time for digitally-native business models that increase value per fan interaction.” By giving artists direct access to their audiences and facilitating higher-value interactions, Rumberg’s goal is for Audius to drive heightened creative experimentation when it comes to fan-facing offerings, moving beyond the “one-size-fits-all streaming” of the 2010s.

This includes integrating and exploiting synergies with SoundStage.fm, the Barcelona-based startup that Audius acquired in November 2022. A virtual concerts platform, SoundStage lets fans dance, interact, and socialise with artists in a high-fidelity video environment. For Rumberg, “it’s a natural extension of what the Audius community is building.” 

Absent from Rumberg’s vision is unchecked growth: “It’s trite but true that a journey of a thousand miles begins with a single step. Audius has come a long way, but it has much further to go. Our community is excited to tackle the challenges ahead and has been incredibly resilient to the ups and downs of the past few years.”