NFT-based Music Streaming Supported By The Chainsmokers And Katy Perry, Predicted To Take Over The Role Of Spotify

Katy Perry supports NFT-based music streaming project. (photo: instagram)

JAKARTA - Popular music streaming services such as Spotify are considered to have cut a lot of musicians' income. This makes new technologies like nonfungible tokens (NFT) likely to help artists get their fair share back. This wild prediction comes from Saxo Bank quoted by Cointelegraph.

According to one of Saxo Bank's “Outrageous Predictions 2022: Revolution”, music creators will benefit from NFT-based streaming platforms, as they allow distributing music directly to listeners without a centralized intermediary that charges a fee.

Saxo Bank cryptocurrency analyst Mads Eberhardt argues that mainstream music streaming platforms like Spotify and Apple Music take a big chunk of it, which, along with the cut paid to the label, is about 75% or more of total revenue.

“These models do not guide individual subscriber costs to the actual music that individual subscribers listen to,” says Eberhardt.

“The use case for NFT could prove very compelling in the next step for content creation technology in the music industry as musicians feel they are being treated unfairly by the revenue-sharing model of current streaming platforms like Spotify and Apple Music,” added Eberhardt.

Analysts note that NFT-based music streaming projects are likely to kick off in 2022, including initiatives like 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 middlemen from the music industry and allow fans and creators to interact with each other directly.

In contrast, the future of traditional streaming platforms like Spotify is predicted to be “gloomy,” according to Saxo Bank. They predict that Spotify's stock will fall 33% by 2022. SPOT, having fallen in 2021, started this year at around $300 and dropped to as low as $204 in August, according to data from TradingView. At the time of writing, SPOT is trading at 229 US dollars.

Meanwhile, Spotify's revenue has continued to grow over time, reflecting the many potential disruptions to the NFT-based music platform. According to Spotify's official 2020 financial results, the company generated 7.85 billion euros in revenue last year, a 16% increase from 2019. Spotify's finances will continue to grow in 2021, with its total number of monthly active users jumping 19% year-on-year to 381 million in Q3 2021.

As previously reported, Spotify has been keeping an eye on the cryptocurrency industry, looking for talent with a crypto background in late 2020. The company is also well aware of the rise of NFT, as NFT mentioned in Spotify Wrapped 2021 compiled for users.