The development of non-fungible token or NFT-based platforms that allow artists to sell digital rights to music directly to listeners will lead to the collapse of traditional streaming services like Spotify and Apple Music. This is the conclusion reached by the Danish investment bank Saxo Bank in its “Outrageous Predictions 2022 “.
Thus, they noted that record labels and streaming services receive more than 75% of payments for listening to streaming music. Moreover, performers are unhappy with the unfair income distribution model.
NFT-based platforms allow them to receive money in real-time, bypassing intermediaries. Users of innovative services, in turn, can be sure that their funds go directly to their favorite musician.
Popularity among both users and performers
According to the experts of the investment bank, the appearance of such products means a paradigm shift in the industry.
In addition, they believe that in 2022, more and more popular artists will begin to withdraw their compositions from traditional platforms. Which will lose as a result.
NFT platforms are quite popular among both users and performers already. Even music labels invest in them, which indicates their belief in a new distribution model.
Changing the relationship between musicians and fans
Previously in November, Royal, founded by DJ 3LAU (Justin Blau), closed a $55 million funding round.
The Chainsmokers, Nas, Logic, Stefflon Don, Kygo and Joyner Lucas & Disclosure, as well as the company Crush Music supported the platform. The latter is the manager of such groups as Green Day, Panic! At the Disco and Fall Out Boy. Andreessen Horowitz (a16z) led the round.
Royal aims to change the relationship between musicians and fans, eliminating intermediaries in the form of record labels. The platform will provide an opportunity to invest in performers and receive part of the royalties. According to the statement, Royal proved its concept in October. During the first interaction with fans on the platform, 3LAU distributed 333 TAE, which represented 50% of the streaming rights to his single Worst Case.