Saxo Bank predicts NFT music platform will disrupt Spotify in 2022

Saxo Bank predicts that as popular music streaming services such as Spotify cut most of their income, new technologies such as non-fungible tokens (NFT) may help musicians take back their fair share .

According to Saxo Bank's "Stunning Prediction 2022: The Revolution," music creators will benefit from NFT-based streaming platforms as they allow music to be distributed directly to listeners without centralized middlemen charging fees.

Mads Eberhardt, a cryptocurrency analyst at Saxo Bank, believes that mainstream music streaming platforms such as Spotify and Apple Music charge a large revenue share, which, combined with the share paid to record labels, accounts for about 75% or more of the total revenue.

"These models don't direct individual subscriber fees to the music that individual subscribers actually listen to," Eberhardt said, adding:

“The use case for NFTs could be particularly compelling as the next step in content generation technology for the music industry, as musicians feel unfairly treated by the revenue-sharing models of current streaming platforms such as Spotify and Apple Music.”

The analyst pointed out that NFT-based music streaming projects may be launched in 2022, including the blockchain music platform Audius backed by Katy Perry, The Chainsmokers and Jason Derulo. Based on blockchain, the Audius platform is a decentralized music sharing and streaming protocol designed to cut out middlemen in the music industry and allow fans and creators to interact directly.

The future of traditional streaming platforms such as Spotify is "bleak" by comparison, according to Saxo Bank. The firm predicts that Spotify's stock price will fall 33% in 2022. SPOT is already on the decline in 2021: Spotify shares started the year at around $300, falling to $204 in August, according to TradingView. As of this writing, SPOT is trading at $229.

Meanwhile, Spotify’s revenue has been growing steadily over time, reflecting the high disruption potential of NFT-based music platforms. According to Spotify's official 2020 financial report, the company's revenue last year was 7.85 billion euros ($9.5 billion), up 16% from 2019. Spotify's financials continue to grow in 2021, with total monthly active users up 19% year-over-year to 381 million in the third quarter of 2021.

Source: Business of Apps

It was previously reported that Spotify has been eyeing the cryptocurrency industry and looking for talent with a crypto background in late 2020. The company mentioned NFTs in Spotify Wrapped 2021, compiled for users on December 1, so the rise of NFTs is also clear.

I will say that I did not expect to see mentions of NFTs in my Spotify Wrapped today, but here we are.

— Meghan Bobrowsky (@MeghanBobrowsky) December 1, 2021

Spotify did not immediately respond to Cointelegraph's request for comment.

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