With popular music streaming services such as Spotify reducing much of musicians’ revenue, new technologies such as non-fungible tokens (NFT) could potentially help artists regain their fair share, Saxo Bank predicts.
According to Saxo Bank’s “Scandalous Predictions 2022: Revolution”, music creators will benefit from NFT-based streaming platforms, so that music can be distributed directly to listeners without burdening key intermediaries.
Saxo Bank’s cryptocurrency analyst Mads Eberhart claimed that mainstream music streaming platforms such as Spotify and Apple Music account for a large share, which together with brand-driven slashes make up about 75% or more of total revenue.
“These models do not guide individual subscriber charges for the actual music the individual subscriber listens to,” said Eberhardt, adding:
“The use of NFTs can be particularly compelling as the next step for content generator technology in the music industry where musicians feel they are being unfairly treated by the revenue-sharing models of existing streaming platforms such as Spotify and Apple Music.”
The analyst noted that NFT-based music streaming projects are likely to start in 2022, including initiatives such as Audius, a blockchain music platform backed by Katy Perry, The Chainsmokers and Jason Derulo. Based on blockchain technology, the Audius platform is a decentralized music sharing and streaming protocol designed to remove intermediaries from the music industry and allow fans and creators to interact with each other directly.
In contrast, the future of traditional streaming platforms such as Spotify is “gloomy”, according to Saxo Bank. The company predicted that Spotify shares will fall 33% in 2022. SPOT may fall in 2021, starting the year around $ 300 and falling to $ 204 in August, according to data from TradingView. At the time of writing, SPOT is trading at $ 229.
Meanwhile, Spotify’s revenue has grown steadily over time, reflecting the potential for NFT-based music platforms to disrupt. According to Spotify’s official economic results for 2020, the company generated 7.85 billion euros ($ 9.5 billion) in revenue last year, an increase of 16% over 2019. Spotify’s economy continued to grow in 2021, with the total number monthly active users which increased by 19% on an annual basis. – to 381 million in the third quarter of 2021.
Source: Business of Apps
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As previously reported, Spotify has been interested in the cryptocurrency industry and is looking for talent with a cryptocurrency background in late 2020. The company is also well aware of the emergence of NFTs, as the aforementioned NFTs in Spotify Wrapped 2021 which was put together for users on Wednesday.