Spotify and Apple Music slash musicians’ earnings, nonfungible tokens (NFTs) are expected to help artists reclaim their rightful share, according to Saxo Bank
NFTs music platform will disrupt Sportify and Apple Music
As popular music streaming services like Spotify slash musicians’ earnings, new technologies such as nonfungible tokens (NFTs) are expected to help artists reclaim their rightful share, according to Saxo Bank.
Music creators would benefit from NFT-based streaming platforms, according to one of Saxo Bank’s Outrageous Predictions 2022: Revolution, because they allow them to distribute music directly to listeners without paying a fee to centralized middlemen.
Mads Eberhardt, a cryptocurrency analyst at Saxo Bank, claims that mainstream music streaming platforms like Spotify and Apple Music take a significant cut, accounting for 75 percent or more of total revenue when combined with the cut paid to labels.
“These models don’t link individual subscribers’ fees to the music they actually listen to,” Eberhardt said, adding:
“The use case for NFTs could prove particularly compelling in the next step for the technology for content generators in the music industry as musicians feel unfairly treated by the revenue sharing models of the current streaming platforms like Spotify and Apple Music.”
The Audius platform sets to be launched in 2022
According to the analyst, NFT-based music streaming projects, such as Audius, a blockchain music platform backed by Katy Perry, The Chainsmokers, and Jason Derulo, are expected to launch in 2022.
The Audius platform, which is built on blockchain, is a decentralized music-sharing and streaming protocol that aims to cut out the middleman in the music industry and allow fans and creators to interact directly.
Traditional streaming platforms like Spotify, on the other hand, have a “bleak” future, according to Saxo Bank. Spotify’s stock is expected to fall 33% in 2022, according to the company.
According to TradingView data, Spotify shares dropped as low as $204 in August, after starting the year around $300. SPOT is currently trading at $229 at the time of writing.
Meanwhile, Spotify’s revenues have been steadily increasing over time, indicating that NFT-based music platforms have a lot of potentials to disrupt.
Spotify’s official 2020 financial results show that the company made 7.85 billion euros ($9.5 billion) in revenue last year, up 16 percent from the previous year. Spotify’s financials improved in 2021, with the total number of monthly active users increasing 19 percent year over year to 381 million in the third quarter.
Spotify has been paying attention to the cryptocurrency industry, as previously reported, and will be looking for talent with a crypto background in late 2020. The company is also aware of the rise of NFTs, as it mentioned them in its Spotify Wrapped 2021 report, which was released on December 1, 2021.