Audius wants to cut the middlemen out of music streaming so artists get paid their fair share. Coming out of stealth today led by serial entrepreneur and DJ Ranidu Lankage, Audius is building a blockchain-based alternative to Spotify or SoundCloud.

Users will pay for Audius tokens or earn them by listening to ads. Their wallet will then pay out a fraction of a cent per song to stream from decentralized storage across the network, with artists receiving roughly 85 percent — compared to roughly 70 percent on the leading streaming apps. The rest goes to compensating whomever is hosting that song, as well as developers of listening software clients, one of which will be built by Audius.

Audius plans to launch its open-sourced product in beta later this year. But it’s already found some powerful investors that see SoundCloud as vulnerable to the cryptocurrency revolution. Audius has raised a $5.5 million Series A led by General Catalyst and Lightspeed, with participation from Kleiner Perkins, Pantera Capital, 122West and Ascolta Ventures. They’re betting that Audius’ token will grow in value, making the stockpile it keeps worth a fortune. It could then sell chunks of its tokens to earn revenue instead of charging artists directly.

Audius co-founders (from left): head of product Forrest Browning, CEO Ranidu Lankage, CTO Roneil Rumburg

“The biggest problem in the music industry is that streaming is taking off and artists aren’t necessarily earning a lot of money. And it can take three months, or up to 18 months for unsigned artists, to get paid for streams,” says Lankage. “That’s what crypto really solves. You can pay artists in near real-time and make it fully transparent.”

The big question will be whether Audius can use the token economy to crack the chicken-and-egg problem of getting its first creators and listeners on a platform that might be less functionally robust than its traditional competitors. There are a lot of moving parts to decentralize, but there are also plenty of disgruntled musicians out there waiting for something better.

From Sri Lankan hip-hop star to serial entrepreneur

Most startup guys don’t have Billboard charting singles on their bio, but Lankage does. Born in Sri Lanka, his hip-hop songs in his native tongue of Sinhalese were the first of the language to be played on the BBC and MTV. He got signed to Sony and even went platinum, but left the label seeking greater control over his work. After going to Yale, he applied his music business knowledge to build a Reddit for dance music called The Drop with Twitch’s Justin Kan back in 2015.

The two teamed up again on a video version of Q&A app Quora called Whale, but that fizzled out too. Lankage’s next venture Polly, a polling tool built as a complement to Snapchat, inspired the now super-popular Instagram Stories polls and questions stickers. But after an acqui-hire by Reddit fell through, he returned to his first love: music.

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