A job listing posted on LinkedIn reveals that Spotify is following the likes of Disney and YouTube with a push into Web3. The posting for a senior backend engineer explains that the candidate will "leverage new technologies, like Web3."
So what does Web3 X Spotify look like?
Spotify is a music industry titan with 406 million users (180 million paid), accounting for 20% of all recorded music revenue in 2021. However, with ~8 million creators leveraging the platform, only a small sliver can actually earn a living wage.
The payout calculation is complex and includes factors like:
- The deal the rights holders have with Spotify
- The location of the users streaming the songs
- Spotify's monthly revenue
- The total number of streams that month
With all of this, the average per-stream earnings of Spotify creators is $0.00348.
So ... wen Web3?
I can see this going a few ways, but both probably end with an acquisition.
Artist controlled streaming rates, e.g., Audious
Audious gives artists the ability to set customizable streaming rates like $0.05 per listen or $5 to listen in perpetuity.
Could Spotify see a potential disruption coming and opt to squash it through acquisition or a Facebook-esque clone?
Possibly.
What if an artist like Kanye West moved to Audious? Kanye has already expressed his dissatisfaction with his royalty split — he only receives 14%-25% of his streaming revenues.
Kanye's latest album, Donda, received over 180 million streams its first week, netting the artist an estimated $350,000 when accounting for his per stream earnings of $0.00437 and the industry-standard payout of 18%.
Seems pretty great until you pin it against what he would have made if he released it for $0.05 per stream on Audious:$8.1M.*
*including Audious' 10% network fee.
Now Spotify is free, so the volume would not be the same. But the thing is, only ~10% of those streams would need to be paid for Kanye to double his Spotify earnings.
Audio-visual digital collectibles
DJ Steve Aoki made $888,888.88 on the sale of his "hairy" NFT last year — a figure he claims to have surpassed his last 10 years of streaming revenue.
Other artists like RAC, 3LAU, and Deadmau5 have all made thousands selling their own drops.
A few platforms to highlight in this space are Catalog and Sound.
Spotify could build or acquire similar products to give their creators (and themselves) an additional revenue stream.
