Under the traditional listen-to-earn system, websites incentivize users to listen to music and leave artist reviews. The amount of income a user earns varies from one platform to the next. In general, however, income depends on the length and quality of the reviews and how many hours are spent listening to music.
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Understanding listen-to-earn
Listen-to-earn is a system where users earn rewards by listening to music and writing reviews.
Listen-to-earn platforms that reward users with cryptocurrency have also become more popular in recent times.
With most concerts canceled because of the pandemic, musicians have been forced to find another way to reach their fans and earn a living.
Platforms based on cryptocurrency tend to be more complex and diverse in function than the traditional model outlined above.
Some platforms foster intimate relationships between artists and fans to crowdfund new projects, while others focus on the social media or streaming aspect of listen-to-earn.
In the next section, we’ll take a more detailed look at this exciting and emerging industry.
Listen-to-earn platforms
Fountain
Fountain is a podcast streaming app where users can earn bitcoin while listening to their favorite content.
Users can also be compensated for listening to advertisements and sharing audio clips with family and friends.
Fountain is one of several companies that believe users should be compensated for their time.
According to CEO Oscar Merry:
The time and attention we give to tech platforms is incredibly valuable. Every minute that you spend consuming content, creating content, or viewing ads, increases the value of the platform you’re using. Most free apps we use every day don’t recognise or reward this – but Fountain is different.
Listeners are rewarded with Bitradiocoins which can then be exchanged for bitcoin. Alternatively, they can hold their bitcoins and own a share of the company’s websites and services.
Bitradio also offers an ad-free premium product where listeners can earn 20% more reward points and support the continued development of the platform.
Current
Current is similar to Bitradio in that users listen to curated radio stations to earn reward points.
However, points are rewarded based on the completion of daily tasks such as filling out one’s user profile or listening to 30 minutes of music.
Current also employs aspects of gamification with bonus points awarded if the user maintains a daily streak of check-ins.
Points can be spent on in-app features, gift cards, electronics, other physical products, and charitable donations.
Audius
Audius is a platform that connects artists with their fans in a familiar music interface.
Importantly, musicians can create timestamped and immutable records of their tracks that are secured by a decentralized network of node operators.
Audius is a listen-to-earn platform for artists that allows them to build a fanbase, share behind-the-scenes content, run contests, and publish music without having to sign a record deal.
The native platform token $AUDIO can be used to unlock premium features such as gated content and custom badges. What’s more, artists can stake tokens to run discovery or content nodes that enhance platform visibility and earn them a share of network fees.
Is learn-to-listen a viable business model?
Blockchain technologies offer the ability to provide built-in incentives into the platform, with the potential to align the two sides of the platform.
In short, the main promise, is the fact that the community can become a built-in force, into the product, which works, as a primary advocate for the platform.
According to this thesis, a decentralized platform can scale more easily, and reduce the costs associated with marketing and distribution (which are usually the most expensive components for centralized platform business models).
However, it’s worth pointing out a few counterpoints to this view.
Winner take all
In domains like arts and music, it doesn’t matter how decentralized might be the technology underneath.
It’s a domain where winners take all. In short, it’s driven by power laws, where very few artists take most of the profits of the industry.
However, if a blockchain-based business model can help a larger number of artists to make a career with a very small audience, this is where things get interesting.
In short, if an artist can leverage the listen-to-earn business model to make a career with a tiny audience (like 100-1000 fans), things become interesting.
If the blockchain becomes another place, where a few artists take it all, then, it’s just like Web2.
In other words, building solid unit economics which makes sense for many artists isn’t an easy fit.
And while the promise is that of decentralization and re-distribution of wealth among artists, it’s not easy to achieve.
Speculation and borderline Ponzi schemes
Where the built-in economic incentives are the strength of blockchain-based business models.
In periods of market expansions, where interest rates are low, and investors take massive risks, it becomes hard to separate speculation from the real product value.
Take the case of a token, for a decentralized platform, which rises in value, simply based on speculation, because there is no underlying activity on the platform.
In that case, it’s important to look at the core metrics of the platform.
Risk of centralization
Even if the blockchain underlies these platforms, in reality, the blockchain can be used only for certain parts of the platform.
And even there, there are initial incentives to distribute most of the ownership of tokens to a few, core people, working on the project.
If this situation stays the same over time, then there is not much difference between the traditional venture capital model and a blockchain-based one.
Key takeaways:
Listen-to-earn is a system where users earn rewards by listening to music and writing reviews. Platforms based on cryptocurrency rewards tend to be more complex and diverse in function.
Fountain was one of many platforms to be developed in response to tech and social media sites that profit from their users and provide little in return. Bitradio and Current are two listen-to-earn platforms that reward users for listening to curated radio stations and podcasts.
Audius is a listen-to-earn platform built for artists who can build a fanbase, share behind-the-scenes content, run contests, and publish music without a record deal. The native token $AUDIO also facilitates network security, access to exclusive features, and community-owned governance.
Key Highlights
Definition of Listen-to-Earn: Listen-to-earn is a system where users earn rewards by listening to music and providing reviews, often through online platforms.
Emergence of Listen-to-Earn Platforms:
Listen-to-earn platforms have gained popularity, particularly with the rise of cryptocurrency-based rewards.
Musicians and artists seek alternative ways to engage fans and generate income, especially in the absence of live concerts due to the pandemic.
Complexity of Cryptocurrency-based Platforms:
Cryptocurrency-based listen-to-earn platforms offer a range of functions beyond traditional review and listening incentives.
These platforms may involve closer artist-fan relationships, crowdfunding for new projects, social media interaction, and more.
Examples of Listen-to-Earn Platforms:
Fountain: A podcast streaming app that rewards users with bitcoin for listening to content and engaging with ads and sharing.
Bitradio: A radio platform where listeners earn Bitradiocoins, which can be exchanged for bitcoin or ownership in the platform.
Current: Offers reward points for listening to curated radio stations and completing tasks, with gamification elements.
Audius: Connects artists with fans, allowing timestamped records of tracks secured through decentralized networks. Uses $AUDIO token for premium features and artist engagement.
Viability and Challenges of the Business Model:
Decentralized Nature and Built-in Incentives: Blockchain technology enables built-in incentives, potentially fostering community advocacy and scaling more efficiently.
Winner Takes All: The music industry often follows power laws where a few artists dominate profits. Blockchain models could support smaller artists to build careers.
Speculation and Product Value: Speculation can inflate token values without real platform activity. Core metrics should be considered to distinguish real value.
Risk of Centralization: Despite blockchain foundations, certain parts of platforms may still be centralized, impacting token ownership and distribution.
An effective business model has to focus on two dimensions: the people dimension and the financial dimension. The people dimension will allow you to build a product or service that is 10X better than existing ones and a solid brand. The financial dimension will help you develop proper distribution channels by identifying the people that are willing to pay for your product or service and make it financially sustainable in the long run.
Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.
Digital and tech business models can be classified according to four levels of transformation into digitally-enabled, digitally-enhanced, tech or platform business models, and business platforms/ecosystems.
A digital business model might be defined as a model that leverages digital technologies to improve several aspects of an organization. From how the company acquires customers, to what product/service it provides. A digital business model is such when digital technology helps enhance its value proposition.
A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.
A Blockchain Business Model is made of four main components: Value Model (Core Philosophy, Core Value and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.
While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.
Cloud business models are all built on top of cloud computing, a concept that took over around 2006 when former Google’s CEO Eric Schmit mentioned it. Most cloud-based business models can be classified as IaaS (Infrastructure as a Service), PaaS (Platform as a Service), or SaaS (Software as a Service). While those models are primarily monetized via subscriptions, they are monetized via pay-as-you-go revenue models and hybrid models (subscriptions + pay-as-you-go).
Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.
The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.
A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.
A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.
B2B, which stands for business-to-business, is a process for selling products or services to other businesses. On the other hand, a B2C sells directly to its consumers.
A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.
Direct-to-consumer (D2C) is a business model where companies sell their products directly to the consumer without the assistance of a third-party wholesaler or retailer. In this way, the company can cut through intermediaries and increase its margins. However, to be successful the direct-to-consumers company needs to build its own distribution, which in the short term can be more expensive. Yet in the long-term creates a competitive advantage.
The C2C business model describes a market environment where one customer purchases from another on a third-party platform that may also handle the transaction. Under the C2C model, both the seller and the buyer are considered consumers. Customer to customer (C2C) is, therefore, a business model where consumers buy and sell directly between themselves. Consumer-to-consumer has become a prevalent business model especially as the web helped disintermediate various industries.
A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.
The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.
The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.
In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.
Businesses employing the brokerage business model make money via brokerage services. This means they are involved with the facilitation, negotiation, or arbitration of a transaction between a buyer and a seller. The brokerage business model involves a business connecting buyers with sellers to collect a commission on the resultant transaction. Therefore, acting as a middleman within a transaction.
Dropshipping is a retail business model where the dropshipper externalizes the manufacturing and logistics and focuses only on distribution and customer acquisition. Therefore, the dropshipper collects final customers’ sales orders, sending them over to third-party suppliers, who ship directly to those customers. In this way, through dropshipping, it is possible to run a business without operational costs and logistics management.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
