Can NFT-based platforms disrupt music streaming?
In one of our recent Newsletters we were speaking about the crypto’s potential to change the music industry ?
Saxo Bank, Danish investment bank specialized in online trading, has released another series of predictions for the year to come, and one of them gives us yet another perspective on the crypto use in music streaming.
Titled “Spotify disrupted due to NFT-based digital rights platform”, Saxo Bank’s prediction highlights that “Not only does an NFT-based platform offer a new way to verify the ownership of rights, but also a way to distribute rights without intermediaries, i.e., a completely decentralised system obviating the need for a centralised platform.”
An average Spotify payout is $0.004 per stream, which means that an artist must have 14’000’000 streams (and that’s a lot of streams!) of their song to earn a yearly fee of $56k, which is an average US salary. The biggest problem though is that this payout is largely opaque: it may vary based on differences in the streaming (free vs premium), country of streaming or other factors such as the agreements with labels or distributors.
Also, as Spotify operates aggregate figures, it does not distinguish between individual listeners, which means that we all are paying for the musicians we do not listen. Of course, it should level off at an aggregate level, but some think it would be fairer to pay only to the artists we listen to – and that is not possible within the actual model.
As Saxo Bank put it, “by leveraging NFTs.. artists could distribute music directly to listeners without centralised intermediaries taking a cut, while tracking their income in real-time—even getting paid in real-time—with listeners enjoying the knowledge that the money they are paying is going straight to the artist.”
Is there already such a platform that would be able to make Saxo Bank’s prediction come true?
To some extent that could be Audius – a platform promising users not only being able to pay for music in crypto, but to essentially crowdfund musicians’ projects and participate long-term in their growth.
For the moment Audius is in promotional phase, with monetization phase coming later. However, the project already launched its governance token $AUDIO and secured a partnership with TikTok, allowing its users to discover new artists through the app. Audius has already enrolled over 100k artists who uploaded their music to the platform.
Audius is a promising project, and financial (and media) backing by starts like Katy Perry and Jason Derulo will certainly be of great use. It doesn’t mean, however, that another crypto-streaming platform will not see the day, and as the industry develops, many more possibilities could emerge.
While none of Saxo Bank’s last year Outrageous Predictions has been fulfilled in 2021, they may have touched a chord in regard to crypto disrupting music streaming. Let’s wait and see ?
