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Vinyls are back in vogue and some people are building their CD collections back up in anticipation that they’ll also be cool again, but the fact remains that most people listen to music today using streaming services. Indeed, just two services, Spotify and Apple Music, took up about 45% of the industry’s market share as of 2022, per Statista.
We have access to a plethora of streaming services today, but despite the sizable competition, music streaming startup Tune.FM is hoping its differentiated approach will help it garner a loyal following of its own.
Unlike any of the big streaming services, Tune.FM is a decentralized music streaming platform that runs on the rails of web3. Users pay for each song they stream using the company’s own JAM tokens, as opposed to a subscription model (they can buy the tokens on Tune.FM’s website). Users can also choose to listen to promoted music to earn more JAM tokens.
As for artists, they earn one cent each minute one of their songs is streamed, letting them make much more money than they would from Spotify, which pays $0.003 to $0.005 per stream, or Apple Music, which pays $0.01 per stream. Tune.FM also sells artist NFTs and other collectibles.
The startup recently received a $50 million Token Purchase Program commitment from Global Emerging Markets (GEM) that will see GEM purchasing $50 million worth of JAM tokens over the next two years. Tune.FM can convert these tokens to funds whenever it wants. The company is also backed by other asset managers and angel investors, who include Andy Hertzfield.
The startup charges 10% of any transaction that uses JAM tokens on the platform. The company can also convert the JAM tokens it is paid to cash whenever it wants through traditional crypto exchanges.
Andrew Antar, the co-founder and CEO of Tune.FM, is a classically-trained violinist who toured the globe, playing with bands and orchestras in his youth. He then went on to launch a directory of musicians at Brown University that garnered more than 4,000 users.
Antar told TechCrunch he’d always wanted to create a music-focused social media platform. Once he learned more about crypto and how web3 could facilitate micropayments to artists, he came up with the idea for Tune.FM.
“Web3 and tokenization are critical to the business model and really [for] changing the way the payments work for artists and how they are able to monetize,” Antar said.
He stressed that despite using web3 infrastructure for the app’s back-end, most users won’t know crypto’s role in the app when they interact with it. “Users don’t necessarily need to know anything about crypto,” Antar said. “We don’t use the word ‘crypto,’ we use ‘credit.’ We don’t use the word ‘NFT’ and use ‘collectible’ instead. It’s really the underlying technology under the hood. We’ve made it so easy anyone and their grandmother can use it.”
Tune.FM launched as a web app in 2021, and its app became available in July. Since then, its user base has grown to nearly 20,000 monthly active users. That’s not a massive total by any means, but Antar said the company has seen massive growth over the last few months. He declined to share specifics.
Antar said the company plans to use the committed funds to scale its tech team, build a metaverse site to host music festivals in, and scale its platform to support more artists.
“All week, I’m basically talking to artists, labels and managers about doing deals,” Antar said. “There are some amazing names that we are not ready to announce. A lot of names that you know.”
Tune.FM has a cool idea here, but creating a company to take on Spotify isn’t a novel one, per se. Lüm was one that shut down in 2022 after raising $4.9 million in venture capital. StationHead is another startup trying to change how people stream music and interact with musicians. Tune.FM also has competition from free video streaming platforms like TikTok and YouTube, which people use for music, too.
Antar isn’t too concerned about competition, though. He feels his company stands out because it is trying to innovate the music streaming process instead of just iterating on a few features. Tune.FM listeners get rewarded the more they are on the platform with free JAM tokens or exclusives from artists, which Antar hopes will keep them coming back.
“As far as the music industry is concerned, it can be disrupted through financial innovation,” Antar said. “It’s had a lot of problems for many years with artists getting screwed over and catalogs being licensed in certain places and not others. We created a totally new business model for the industry and global music economy. That’s only possible with tokenization.”
