Non fungible tokens (NFTs) will help artists reclaim their rightful share of revenue as popular music streaming services like Spotify reduce musicians’ revenues, according to Saxo Bank.
Music creators will benefit from the rise of NFT-based streaming platforms, according to Saxo Bank’s “Outrageous Predictions 2022: Revolution” forecasts, because they will be able to distribute their music directly to listeners instead of through central intermediaries who charge fees.
The End Of An Era ?
According to Mads Eberhardt, the CEO of Saxo Bank, mainstream music streaming services like Spotify and Apple Music do take a significant cut of the revenue, but he claims that when you combine that with the pay cut to record labels, the total revenue is as high as 75% or more.
According to Eberhardt, individual subscribers’ fees are not based on the music they listen to. The following is what he said after that:
‘Many musicians believe that current revenue sharing models used by streaming services like Spotify and Apple Music are unfair to them, making NFTs an ideal solution for the music industry.’
What To Expect
Audius, a blockchain-based music platform backed by stars like Katy Perry, The Chainsmokers, and Jason Derulo, is one of these initiatives to look into. Streaming music services based on NFT are expected to go live as early as 2022, according to the analyst.
A blockchain-based music-sharing and streaming protocol called Audius aims to cut out the middlemen in the music industry so that fans and artists can work together directly on a global scale. Blockchain platform Audius was built on the Ethereum blockchain and is currently being run on the Bitcoin network.
In contrast, Saxo Bank Research predicts that long-established streaming services like Spotify will face a “bleak” future in the near future. By the end of the decade, Spotify’s stock price was expected to have fallen by 33%.
The SPOT fell steadily throughout the year 2021, starting the year at around $300 and dropping to a low of $204 in August, continuing the downward trend established by recent trading views data. According to the latest market data available, Sprott’s shares are trading at $229 per share as I write this article.
According to Spotify’s revenue growth, non-financial technology music platforms like this have the potential to have a significant impact on music’s business model. As of the company’s official 2020 financial results, Spotify generated revenues of 7.85 billion euros ($9.5 billion), an increase of 16 percent over the previous year’s totals.
As of the third quarter of 2021, Spotify had 381 million monthly active users, a 19%year-on-year increase in revenue.