NFT music platforms will disrupt Spotify in 2022 (Saxo Bank prediction)

Spotify and Apple Music reportedly cut musicians' earnings by 75%, along with cuts paid to record labels. Saxo Bank predicts that new technologies like Non-Fungible Tokens (NFTs) will help artists get their fair share, while popular music streaming services like Spotify cut most of  their earnings. According to one of Saxo Bank's Outrageous Predictions 2022: Revolution, music producers can benefit from an NFT-based streaming platform as they can distribute their music directly to their listeners without centralized brokerage fees.

Saxo Bank cryptocurrency analyst Mads Eberhardt claims that major music streaming platforms like Spotify and Apple Music hold a significant share, accounting for over 75% of total revenue, along with cuts paid to labels.

"This model does not define individual subscriber rates based on the actual music they hear," 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.”

Analysts predict that NFT-based music streaming projects will begin in 2022, including initiatives like Audius, a blockchain music platform backed by Katy Perry, The Chainsmokers and Jason Derulo. said. The blockchain-based Audius platform is a decentralized music sharing and streaming protocol designed to eliminate intermediaries from the music industry and allow fans and producers to interact directly with each other.

In contrast, the future of traditional streaming platforms like Spotify is “gloomy” for Saxo Bank. The company predicts that Spotify's stock will fall 33% in 2022. According to TradingView, the SPOT price dropped from $300 in 2021 to  $204 in August. At the time of writing, the SPOT is trading at $229.

Meanwhile, Spotify's revenue has grown steadily  over time, reflecting the great potential that NFT-based music platforms can undermine. According to Spotify's official  financial results for 2020, the company's revenue last year was €7.85 billion ($9.5 billion), up 16%  from 2019. Spotify's financial performance continued to grow in 2021, with  total  monthly active users of 381 million in Q3 2021, an increase of 19% annually.

Spotify revenue:

Source Business of Apps

As previously reported, Spotify is concentrating on the cryptocurrency industry by discovering talent with a cryptocurrency background at the end of 2020. The NFT is also well aware of the growth of NFTs, as we mentioned in the Spotify Wrapped 2021 made for users on Wednesday.