Music NFTs LATAM
v1 of the Latin American Collaborative Database
v1 of the Latin American Collaborative Database
Versión en español
- Editorial Note
- Our main conclusions
- Introduction + background
- What is a Music NFT?
- First data analysis
- Releases (of music NFTs in LATAM)
- Gender gap
- Musical Genres
- Type of sale
- Utilities in NFTs
- Conclusions and future directions
- Editorial Note
- Our main conclusions
- Introduction + background
- What is a Music NFT?
- First data analysis
- Releases (of music NFTs in LATAM)
- Gender gap
- Musical Genres
- Type of sale
- Utilities in NFTs
- Conclusions and future directions
FUTURX + Water & Music
Understanding the universe around music NFTs in Latin America has multiple implications: it is not only to understand the current state of a technology that can change the ways of cultural consumption at a global level, it is also the possibility of making visible in real time the main lessons learned from the experiences already carried out in this paradigm and with this a first picture of the adaptability of music projects with the use of current technologies.
From Hermeto Pascoal in Brazil giving his scores and the possibility of recording them, Maluma generating a visual universe totally different from the sound, the Ceremonias festival in Mexico strengthening its community or Bizarrap taking its iconic objects to digital collectibles, to a new ecosystem of artists (Xcelencia, Kasbeel, HeyBela, Paula Pazos, Alex Paul, among many others) who do not necessarily require web2 platforms to develop their digital business model and who can even generate more money in this context than many artists with vast experience.
The possibilities for music to find new formats thanks to blockchain technology and NFTs are truly endless. This is a fact, because there are more than 16 projects from different countries experimenting with this technology. Releasing songs, offering unique in-person experiences (IRL), granting future royalties of a song, giving the possibility of remixing works: all these points enable new ways that redefine the relationship between the artist and his audiences.
It is still early to know how the universe of NFTs in music will consolidate and we are living a totally experimental instance in many cases, for this reason this analysis is relevant, since what you are going to read in this report will help many people to approach these technologies in a simpler and easier way.
A new paradigm requires a new way of doing things. And that is why this report seeks to trigger multiple discussions on how we adopt this technology and generate a translation according to our territories, strengthening new musical ecosystems and in dialogue with existing ones.
Obviously there is a lot to work on and these are the main lessons learned. This report will have a second part that will focus on sharing good practices detected during the process.
An updated version of this text is under construction, so if during the reading you think that some information is wrong and should be changed, please write to email@example.com with the correct information so that we can modify it.
During the last semester of 2022, the FUTURX community in collaboration with Water & Music, set up a goal: to collect and analyze data regarding all music NFTs in Latin America that had been created (until December 2022), the community wanted to generate the 1st report of the ecosystem in the region. This is the first result of the process that gathers the main trends and characteristics of the ecosystem.
The text aims to deepen the state of knowledge about the web3 ecosystem:
- for those who are working and developing projects under these technologies, and
- offer an accessible approach to the main characteristics and trends of this ecosystem to people who have not yet ventured into the web3.
We hope that this report provides an opportunity to gain an in-depth understanding of the universe around the region’s music NFTs and its challenges.
It is interesting what is happening in Latin America with NFTs, although it is a developing ecosystem, compared to the general market it is equally inventive. I see that in Latin America there is a lot more experimentation in a lot of formats and I find that very impressive.
Steph Guerrero, Ecuador/USA.
Our main conclusions
- We surveyed 150 projects from 16 Latin American countries on more than 26 platforms.
- The most used blockchain is Ethereum (80%). The second Tezos (13.4%), the third Polygon (6.5%) and finally Solana (2.6%).
- Of the NFTs launched, 44.6% are single fixed-price (1:1). 30.5% are serial fixed-price and 12.7% are auctions. Finally, 12.2% are Airdrops.
- Electronic music in its various subgenres is the scene with the greatest development both in Latin America and worldwide.
- Only 23% participation of women projects in music NFTs and 2% non-binary people. On the contrary, 63% of the projects are by men.
- 65% of the artists surveyed have more than five years of experience in the sector, and almost 35% have more than 20 years.
- 80% of the NFTs in Latin America are the sum of audiovisual and audio + image. 15% of the NFTs surveyed offer utilities (access to communities, merch, royalties, scores, among others.)
- Total music NFTs sold: 5163
- Sales volume in USD: 1,159,086 USD
- Total music NFTs created: + 22.000
- Turnover in this market remains concentrated, with two NFT campaigns accounting for 70% of total revenue.
Introduction + background
This report arises from the collaboration of two communities that focus on the intersections between music and technology: Water & Music at the global level and FUTURX at the Latin American level.
FUTURX was born in 2020 as a space for training and exchange for the updating and professionalization of musical ecosystems. In addition to these objectives by 2022 it proposed the creation of knowledge and the consolidation of a community. This same year Water & Music launched an extensive report on the current state of the art of music NFTs globally. This incredible analysis made us think about the need for instruments that help build regional ecosystems outside of the global markets (which represents a large percentage of the Anglo/European markets and not Latin America). This report is born from this crossroads, with a collaborative approach taking advantage of the tools of both communities to enhance the survey and outreach.
Our database is not a 100% definitive list of all the music NFTs that have been produced in Latin America; however, it represents the first effort to collect and systematize data related to music NFTs in the region. The database combines the knowledge obtained and collected by the effort of both communities, which was represented in more than 30 people collaborating in different stages of the uploading and systematization.
Thus, the data provided by agents of the ecosystem itself, artists or collectors, added to the calls to action on social media, and the strategic meetings with agents of the ecosystem, made this database possible and surpassing the initial objectives.
Likewise, the conceptual approach of this research combines the already consolidated vision of Water & Music (see previous reports), with the vision of FUTURX and 432 Hertzios to understand the region and the Latin American context (see more reports here).
This report is a first snapshot so the character of the analysis is mainly descriptive.
What is a Music NFT?
We understand a «music NFT» as an NFT (non-fungible token) that satisfies any of the following criteria:
- Sold directly by an artist or music brand (festival, label, production company, etc.)
- Containing musical pieces regardless of their duration or accompanying medium (e.g. Basseado, Xcelencia, Xedra among many others)
- Linked to an artist or music brand in its perceived value (e.g. Ceremonios from the Ceremonia Festival, crypto rastas)
- Revolves around music or musical culture as a central theme or value proposition for collectors (e.g. Hermeto Pascoal’s sheet music)
- Published on music-specific NFT platforms (e.g. Phonogram, Enigma, Sound.xyz, Catalog, Beatblox, etc.)
From our perspective an NFT does not necessarily have to contain audio to be related to music. In this sense ticketing, sheet music, meet and greets, music royalties, PFP projects (those that gather images to use as profiles), among other types of NFTs that have met some of the above characteristics, have been considered for this research.
For those who don’t know what an NFT is we leave you this video made by the RIP Gang (alternative urban music crew from Argentina) about the new possibilities of NFTs and the launch of the RIP Coin (their community access token):
Disclaimer: What will not be covered in this report?
The main aspect that we believe to be important and key, but that will not be part of this first report is the legal relationship between NFTs, smart contracts, and the current legal aspects with the particularities of each country. This topic, given its complexity, requires its own space. At a regional level they have been explored in FUTURX within specific spaces and at a global level Water & Music has been addressing the topic extensively in different articles.
The data collection process was conducted in a collaborative and decentralized manner. We identified:
- First, we request information through a form on our social media and newsletter.
- Second, we divide participants into groups to research different aspects of the NFT music market including marketplaces, collectors, artists and collections with the help of collaborators from FUTURX and Water & Music.
- Third, we created a more specific form that we shared on social media.
- We also relied on data sources directly from music platforms and documentary research about the NFT music market.
- In parallel to this process nine interviews were conducted with key players in the ecosystem to contribute qualitative aspects to the report and validate the quantitative data generated.
- And finally, open working spaces were held in the FUTURX community and in Water & Music to discuss the preliminary results and central themes of this report.
The report analyzes data from August 2019 to November 2022.
First data analysis
In this stage we will analyze the sales and releases of music NFTs in Latin America, as well as the artists, genres and their trajectories. We will also explore the marketplaces for the release of music NFTs and examine different blockchains and types of sales that are being used in this space.
In addition, we will delve into the concept of utility in the context of music NFTs and how these tokens are being used to offer fans unique and valuable experiences beyond the acquisition of a digital file.
Sales volume + turnover
- Gross turnover: 1,159,086 USD
- Number of NFTs Sold: 5,163
- Number of NFTs Created: +22,000
The level of sales of music NFTs in Latin America has experienced significant growth in recent times, as evidenced by the gross turnover of 1,159,086 USD, and despite not being a large number for the traditional music industry, it is considering that it is a new segment in the market. The amount of NFTs sold to generate this number is 5,163 taking into account that there are more than 22,000 NFTs created we can deduce that 1 out of every 4 music NFTs created was sold.
Concentration: 2 collections, those of Maluma and Ozuna account for approximately 70% of the turnover. The remaining 30% represents the collection of more than 140 musical projects throughout Latin America.
To understand this number in detail, 3 points must be taken into account:
- The price of the NFTs surveyed was taken as close to the launch or sale date as possible. Given the large fluctuation in the Crypto/USD ratio we used a historical exchange rate chart to calculate the value.
- The existence of at least three types of transactions or types of sale: one-to-one sale, auction, serial, as well as airdrops (gifts). In addition, some platforms allow the purchase of NFTs with FIAT currencies, e.g. pesos or dollars.
- Secondary markets. A novelty in NFTs is the traceability of the market, which enables the establishment of a percentage for creators in relation to secondary sales. i.e. when a collector/buyer accesses an NFT and decides to resell it, the artist or creator of that NFT is paid a percentage stipulated in the resale smart contract and in each successive sale.
To understand the importance of this type of formats and their economic impact on independent projects it may be good to compare with traditional streaming formats: in Argentina (and similar in the rest of Latin America) to generate approximately 10 USD on platforms such as Spotify at least 10,000 plays are necessary, something that could be compared to the sale of 1 NFT at a very affordable price.
In this sense, it should be noted that we have detected a number of musical projects that have already generated between 5,000 and 30,000 dollars with the sale of their NFTs. A figure far from what they could have generated with their music on web2 platforms.
As we mentioned at the beginning of this section, two global artists like Maluma and Ozuna are taking the lion’s share of the total sales volume. Maluma (Colombia), has released 5 NFTs representing 747 editions, sold out for a volume of 378,232.51 USD. Ozuna (Puerto Rico) on the other hand, released 5 NFTs representing 232 editions, also sold out and collecting a total of 456,428.85 USD.
These data show the dynamics of income concentration that are also present in the different areas of business and development of music projects in Latin America. However, they should not overshadow the potential and diversity of project development at different scales, as the following examples show:
Hermeto Pascoal (Brazil) has raised around 6,784 USD through the sale of sheet music of his musical works, which allows the NFT holder the exclusive right to record performances of these songs, even for commercial purposes on his own album, at no additional cost, generating a unique possibility of experimentation with the composer’s music.
HeyBela (Colombia) started her career 3 years ago and has a community building strategy mostly focused on NFTs. She has launched more than 65 NFTs (unique and editions) with an approximate value of 10,377 USD (not counting her latest releases).
Babasonicos (Argentina) with more than twenty years of experience, has raised around 6,500 USD with NFTs of unreleased songs and Mixers (NFTs with multitrack audio format made by the marketplace ENIGMA).
Average value of an NFT
These examples can give a general idea of how sales are represented in artists with different types of development, musical genres and years of trajectory. While the cost of an NFT depends on different variables, such as the type of NFT, the marketplace, the market fluctuation and the blockchain in which it is hosted, we can see that today you can find music NFTs from 10 USD. For reference a track on Sound.xyz has an average value of between 40 and 50 USD, on Enigma a NFT Mixer has a base price of 10 USD.
Releases (of music NFTs in LATAM)
NFTs de música en LATAM
In the context of music when we talk about music NFTs releases we are not only referring to songs or tracks. Beyond the fact that they have been mainly used to sell phonograms (music recordings) with their corresponding cover, images or audiovisuals (video clips, animations or 3d loops), within this format we also include show tickets, merchandising and other experiences related to music in a digital way.
This diversity of formats is given by the technology proposed by the NFT, which works as containers for different types of content and utilities both on-chain (inside the blockchain) and off-chain (outside the blockchain) and can be both digital and physical, or even both, for which the term phigital (physical+digital mix) is used. For example, an NFT represented digitally by an image can contain a ticket for a show or even something related to the artist’s merchandising.
It should be clarified that an NFT that includes audio or an image, does not include rights over them, unless this is explicitly clarified. Something that is being used by some artists to generate interest, offering from the use of content under CC0 license (creative commons) to the possibility of receiving royalties in the future of what the track will generate, depending on the case may be in streaming platforms, in other NFT, or in copyright (each case has its complexities).
NFTs seem to us a very interesting format to develop artistic careers (in digital) where intermediaries are eliminated with the objective that the artist can make a living from his music.
Sello discográfico web3 – Crypto Música Records.
It is important to note that the way songs are released is changing. Instead of following the traditional logic of stereo recordings, some releases may have different variations, such as very short tracks or multitracks, or single versions of songs with many single copies. Some examples of this are:
- Crypto Música Records (3,000 unique and different copies)
- The release of The Perris (1,111 unique tracks).
- Another interesting example is Basseado that develops a lot of short works (30 sec) with an audiovisual complement, something that is not an exception since it is done by many niche artists.
In this context of diversity of multiple formats we find that there are at least 22,708 NFTs of music in Latin America. This amount contemplates the sum of unique NFTs (of which there is only one copy) and editions (which can have the number of copies defined by the creator). In addition, they are generated both by artists (92%) and festivals (8%).
The market for NFTs in music is still very new and is experiencing rapid growth, we have seen exponential increase in releases over the last few months.
There are music NFTs in more than 15 Latin American countries.
Although we know that Argentina, for various reasons related to its economy, has had a strong adoption in the crypto world and NFTs, we must also take into account that the largest proportion of contributors to the database belong to that country. That said, it is very likely that Brazil, Mexico and Colombia have a larger proportion of artists on the web3 than those surveyed. We also know that our database includes artists, NFTs and key projects that allow us to describe the main trends and particularities of the ecosystem.
In Argentina, festivals such as Quilmes Rock, El Cosquin Rock, or the Soda Stereo Show have adopted NFTs as the way to manage and articulate extra services and merchandising among other utilities. Having a good development and adoption. Long-time artists such as Tweety Gonzalez and Daniel Melero with a storytelling linked to technology and innovation, have experimented with different formats of NFTs. But also 100% web3 artists like Paula Pazos are making a big impact in the ecosystem.
In the case of Brazil, we have incorporated numerous releases sold on Phonogram.me. Hermeto Pascoal, Jazz/Academic and Brazilian folk musician with more than twenty years of experience is a paradigmatic case, who has found in the use of NFTs the way to disseminate and circulate original music and scores composed during the pandemic. The same creations are released with a creative commons license.
In Mexico, we have obtained data from pioneer artists of electronic music on the web3 such as the artist Zplit.eth who has the oldest NFT in the database dated 28/8/19 and recent artists such as Alex Paul who also put forward a development strategy focused on NFTs. Even the Ceremonias Festival created the Ceremonios, a collection of NFTs with diverse utilities to strengthen the community around the festival and the Vive Latino Festival and Tecate.
In the case of Colombia, we can cite Maluma again who with over ten years of experience has linked urban music and reggaeton with a wide variety of business units around his project, or HeyBela and Kasbeel, two young artists who are building their musical project with a strong focus on NFTs and Web3.
Lastly, countries such as Uruguay, Cuba and Puerto Rico have artists and musical projects that are developing using NFTs. This is not necessarily widespread, but they are represented by major exponents who are developing within the music ecosystems:
- No Te Va Gustar, Uruguayan artist consolidated in the traditional market and experimenting in these new formats.
- Xcelencia linking the traditional universe and web3 from Puerto Rico (in addition to the aforementioned Ozuna)
- Yaxx Castillo from Cuba which also addresses the issues of digital content consumption that the country has historically been facing.
In terms of the trajectory of musical projects, more than 65% of the surveyed artists have over five years of experience within the industry, and almost 35% have over 20 years. We can infer that contrary to what one might think, most cases are not new projects, but rather have been developed for some time, and have found this technology and are betting on developing a new business unit, a possibility for generating community, experiences, and a storytelling strategy through music NFTs.
Projects with 1 to 3 years of experience represent 7%. This range of artists includes many native web3 projects.
23% of music NFTs are created by women and 2% are created by non-binary individuals. On the contrary, 63% of the projects are by men. Thus, every time a woman or non-binary person enters a space related to blockchain or even in technology sectors, they find this disparity.
It is a paradigm that is going through a cultural situation apparently difficult to change despite having a new opportunity to address it. This raises some questions: How are conversation spaces structured? How can we create more inclusive and diverse spaces?, How can we involve more women and LGBTQI+ individuals?, Is the education about the impact of web3 on music accessible?.
A music NFT marketplace is a platform where non-fungible tokens (NFTs) that are linked to music can be bought and sold. Music NFT marketplaces offer artists/creators/festivals the opportunity to sell their creations in NFT format and buyers the opportunity to purchase a unique, verifiable copy of the music or content they wish to collect.
Within our analysis we surveyed more than 26 platforms and many smart contracts created by the artists themselves.
- OpenSea is the most widely used NFT platform by creators, accounting for 40% of music NFT projects and releases. This can be attributed to its global nature and its longevity in the market.
- In second place and first in the region is Enigma, a marketplace that focuses on music since it was created by companies linked to music and technology such as Popart, Lauria and Globant. This has allowed it to approach great exponents of music who are somehow part of these companies.
- Thirdly, we have Objkt, a marketplace that is built on top of Tezos and that has provided the framework for the development of a good deal of music NFT projects, especially in the electronic genre and experimental niches.
Number of NFTs per Marketplace
Number of Artists x Marketplace
Outside these platforms, there are others that have been and continue to be highly relevant for the development of the regional music NFT scene:
- Mintsongs was an open platform that, despite closing due to not consolidating its business model (a challenge for all platforms of this type today), helped to raise visibility for a web3 artist scene in the region. Since then, many have gone on to use marketplaces such as:
- Sound is currently one of the most popular platforms for music and NFTs in general, and it has shown significant growth in the global market for this type of NFTs in recent times.
- Catalog, which proposes 1:1 canonical NFTs, is intended as a legitimizing space for artists to have exposure to collectors on a global scale.
- In addition, after the closure of Mintsongs, many artists such as AlexPaul or Sagrado opted to create their own smart contracts to release their music NFTs. This allows them to have more control over how their songs are distributed and sold and to set specific rules for the use of their music, but has significant technical complexity and may entail some additional costs.
Finally, there are at least four Latin American marketplaces that have focused or are focusing on music:
- Phonogram is a platform created in Brazil, containing NFTs and canonical collections from their country, they have developed their own token to aid onboarding and are working to expand their reach in the region.
- BeatBlox is a recently created Argentine/Uruguayan platform specialized in electronic music.
- Qurable is a Chile/Argentina platform whose main development is a collection by Daniel Melero, and which gained strength at the beginning of 2022 with the launch of the web3 label Fluxia Art.
- sonGain is a platform that focuses on Central American artists and generates models similar to crowdfunding for projects.
From Phonogram, we created our own token, which is stable with the Brazilian currency. The goal is to facilitate access to this technology, creating our own wallet within the platform, where the user can use our coins within the platform.
Lucas Meyer, Brazil.
Two key points about marketplaces are the value of community and the ability to work in multiplatform mode:
- The community value that a marketplace can generate is very important for artists and creators, as it helps them connect with local audiences and build a fan base in their own region. A region-specific marketplace becomes more responsive to the needs and preferences of local artists and creators, which can make it more attractive for them to use. In addition, a marketplace has the ability to offer artists and creators to participate in events and activities organized by the platform, which would help to connect with other artists and creators and expand their network of contacts.
- The possibility of finding the right marketplace for each instance of the project without the need to maintain exclusivity is an advantage of NFT marketplaces compared to traditional platforms. Many artists and creators choose to use multiple platforms to reach different audiences and take advantage of the opportunities offered by each of them. By not being tied to a specific platform, artists and creators have greater freedom to experiment with different platforms and find those that best suit their needs and goals.
Kasbeel is a talented artist who has gained recognition in the web3 community through her exceptional artistic work and her ability to craft captivating narratives using NFTs across various platforms. She has achieved this with all the complexities that being an artist from a rural area of Colombia brings in. She has published her music and artwork on multiple platforms including Glass, Catalog, and Zora, where she was even spotlighted on the homepage. Additionally, she has demonstrated great skill in successfully selling her creations. On top of that she has ingeniously employed Kasbeel’s multisig feature when selling her creations on Zora (a multisignature wallet, it’s a consensual treasury management mechanism that could be perfect for creative teams) something that had not been done before. Her project demonstrates how the Web3 ecosystem and its multiple opportunities can be beneficial for artists and how they can use the technology available to succeed in their career.
40% of the surveyed artists in Latin America come from the electronic music scene. On the other hand, other 20% has rock/alternative rock as their main genre, meanwhile urban genre occupies a 13% of the space and pop music 12%.
There is indeed a wide diversity in terms of musical genre. For the general analysis, we also set out to standardize the typology of musical genre used by Water & Music, in order to establish possible comparisons. We used two categories: Main Genre (standardized with the W&M usage) and Subgenre. We consider it an important milestone in this research to highlight the diversity of music that exists in Latin America and that this variety is also represented in the ecosystem of music NFTs.
Why is electronic music the main genre? We understand that there are different variables, such as, the search and exploration with technology by artists, the search for genuine spaces to disseminate this type of music, and on the other hand the emergence of new musical formats, more fragmented, less standardized, that do not necessarily represent a complete song. There are examples such as Basseado/Astrosuka/Sofja etc. where NFTs are audiovisual projects of 15 seconds or 1 minute.
Ethereum is the leading blockchain in Latin America, with 80% of the surveyed NFTs being launched on its network. Tezos comes in second, with 13% of launches, then Polygon with 6% and lastly Solana with 2.6%.
The prominence of the network created by Vitalik Buterin is primarily understood due to two factors. It is the oldest network among those mentioned before, and at the same time the one on which marketplaces such as OpenSea, Enigma, Phonogram or Zora are built, and those concentrate the vast majority of NFTs launched. Recent networks like Tezos, Polygon, and Solana have seen significant expansion, particularly in the past year, thanks to the emergence of various platforms including Catalog, Beatbox, SonGain among others.
While Ethereum is the main blockchain to launch NFTs and also has a certain symbolic value, other blockchains such as Tezos facilitate onboarding artists and collectors, since the NFTs and the gas fees are cheaper, they are more accessible and enables the possibility of launching an NFT with a lower investment.
Type of sale
There are different formats in which sales of NFTs can be executed. The following table describes the main ones:
|1:1 – Unique NFTs||It is a token created in a unique and unrepeatable way, a single edition of the piece is minted and created. Whoever collects it will be the owner of that work without someone else having it, since there are no extra copies. It is normally used in auctions.|
|NFT serialized / Collections||Collection of NFTs
A project has multiple digital assets that are created to reproduce a series of tokens. This collection will have multiple owners and is used to create a community in which each user has a graphic reference that creates a digital fingerprint to identify him or herself digitally. Live collection
They are representations of moments that happened at a certain time and are collected as such.
|Single auctions||A single or fixed-time auction is an auction in which buyers can bid for a specific period of time and, when the time runs out, the auction closes and the highest bidder wins the NFT.|
|NFTs with utility||It is an NFT that has some kind of purpose or functionality besides being simply a representation of an object’s property. Below we detail different types of utility.|
|Airdrop||An NFT airdrop is a free distribution of non-fungible tokens to a group of people. NFT airdrops are often used as a marketing strategy to promote a project or to reward members of a community. Sometimes NFT airdrops are created to be distributed as tokens that represent property or a right of some kind, such as a piece of digital artwork or an event ticket.|
Although almost half (44.6%) of the released NFTs are unique (1:1) with fixed price, 30.5% are serialized, which obviously represent many more editions and volume of NFTs. Thirdly, 12.7% of the NFTs surveyed are sold by auction. Lastly, 12.2% represent Airdrops. Many artists make different types of sales depending on the platform on which they work and the importance of the content that it is being released. As we have already mentioned, there are marketplaces that only work with one type of sales, such as Catalog (1:1) or others where you can select the type of sale, such as Zora, Enigma and Phonogram.
Utilities in NFTs
According to the database NFTs offering utilities represent 15% of the total surveyed. These utilities can represent access to community, merch, meet and greet, etc. It should be noted that many artists offer off chain utilities. i.e. access to utilities that are not directly expressed in the NFT metadata.
We considered the definition of utility established by Water & Music for this report. We define utility as any measure of value to the people who obtain an NFT. That value can correspond to different types of benefits:
- Functional: ability to do or enable something after being acquired, from access to a community, to receive some kind of experience, or some physical good.
- Emotional: create a connection with that content and/or with the artist or project that generates it.
- Financial: if the NFT could be acquired as an asset with the idea that it may increase in value in the future or that one of its utilities generates financial value, such as, for example, a % of royalties.
These benefits can also be created:
- Onchain: integrated into an NFT smart contract, such as NFT revenue splitting or onchain music storage, or
- Offchain: delivered and experienced outside of blockchain-specific environments, such as in-person events, physical merchandising and general community development.
Over time, we see a great diversification in the utilities around NFTs linked to music, including creative packages of all kinds of benefits that represent unique value propositions to their community. Overall, we find a trend of bottom-up adoption, with independent artists leading the way in experimenting with innovative forms of utility.
In this sense and similar to the global framework, the most generalized types of utilities are linked to:
One example of how NFTs can be useful to the community is through projects such as Bohemian Groove’s Rip Coin, a label/collective that has created and distributed NFTs that include access to a special space like a discord channel, sold out shows or the ability to listen to albums before their release. This allows projects to offer additional value to their closest fans and promote the community around their work.
NFTs can also be useful as a way of selling tickets, it is the case of ATROÁ CryptoPass in Brazil which brings together festivals like: Bananada, No Ar Coquetel Molotov, DoSol enabling access to all of them with the same NFT. This can be especially useful for projects that have a strong following and want to offer their audiences the opportunity to attend several events without having to buy separate tickets for each one.
NFTs can also be used to offer unique and personalized experiences to fans, as artists like Lali or Miranda have done. This can include private meet and greets, exclusive merchandising and more. From FUTURX developed and followed in real time the creation of: Proyecto Gomez Casa’s NFT, besides offering exclusive tracks and a ticket to a show, offered the possibility to eat a sandwich with a personalized recipe in a bar in Buenos Aires. These experiences can be very valuable for the most dedicated fans.
A collector of music NFTs is someone who acquires and collects music-related NFTs in their wallet. The role of a collector of music NFTs is to be an ally who values the content and work of artists. In addition to acquiring and collecting NFTs, they can also participate in the music NFT community, sharing their collection with other collectors and participating in discussions and activities related to the ecosystem. The space where these discussions generally take place is Twitter and Discord, the digital territory where the web3 has mainly developed.
Some collectors of music NFTs may also be investors, as there are NFTs that can increase significantly in value over time, in these cases, the collector acquires NFTs for the purpose of reselling them later at a higher price.
The ones that impacted me the most were the artist collectors. If you like the art of someone who is a smaller artist, in the action of collecting the piece, you are generating value to that creation, that has a very strong impact. That’s why for me, the collector profile makes more radical changes in the life of another artist.
Three significant points to talk about music NFT collectors in Latin America:
- They are part of the regional web3 ecosystem, they work within the ecosystem that motivates them to collect as a symbol of support and belonging.
- They are artists who have a clear sense that in order for someone to trust their work and support them, they must first support other projects.
- They are people from the Anglo world (United States – Europe), who are interested in the Latin American music market, its sound, and its potential.
In terms of consumption of music NFTs, I don’t know if there are enough Latin American collectors, but the same can be said of the market in general. What’s really interesting is, on the one hand, that there are collectors who do not speak Spanish and are collecting pieces in that language. Additionally, there are Latin American communities outside the music ecosystem that are collecting music NFTs, demonstrating that there is a union between art and music collectors in our region.
Steph Guerrero, Ecuador/USA.
This is perhaps one of the most delicate and fundamental points for the progress of the NFTs and Web3 ecosystem in the region, understanding the need to develop more NFT collectors.
I always try to establish connection with my collectors, we are in contact, sharing. I mean, being a collector is not just buying a NFT or having a prize and that’s it. I occasionally give drops, I have experimented with Black Friday, Cyber Monday, newsletters and other forms of sharing. I don’t see them as fans, I see them as my collaborators, my partners, it´s a way of going beyond our connection.
Alex Paul, Mexico.
Conclusions and future directions
Blockchain technology has arrived to rethink traditional approaches to music creation, distribution and monetization. In Latin America, the ecosystem in general is in a stage of development and experimentation.
There are artists, festivals and labels exploring how to deepen their experiences around their music and also platforms that are looking to contribute to local development from different places.
The general objective of the NFTs is focused on thinking new dynamics of linkage between the projects and their audiences, and generating new ways of monetization in the digital context.
The main challenge is the accessibility of this technology for creators, music workers in general and audiences outside the niches.
There remain some outstanding questions, missions and future directions to be addressed:
- Best practices around project strategies.
- More detailed cross-referencing in relation to sales.
- In-depth understanding of the creation and development of new digital communities.
- Facilitate the entry of audiences and people who are part of the music ecosystem to music NFTs and their possibilities.
- In addition, deepen on central issues for the consolidation of this paradigm such as:
- Legal issues surrounding NFTs, including phonographic rights, copyrights, licensing and sale of rights or royalties.
- Environmental impact of this technology in relation to others.
- Strategies and debates to reduce the gender gap.
- Relationship and integration with the traditional music industry.
Undoubtedly, the results of this report confirm that Latin America is a region that still has a long way to go, but that already has the foundations for what will be one of the new consumption formats of this new digital stage: the NFTs. There is still a lot to be done, we hope to continue working and contributing with data and insights for the development of current and future music ecosystems.
Alejandro Ramírez | Alejandro Romero | Alex Flores | Alex Paul | Angel Huerta | Anselmo Cunill | Aye Laurencena | Basseado | Bianca Battista | Brooke Jackson | Carlos H Cano | Caro Castilla | Claudio Cifuentes | Cherie Hu | Constanza Zarnitzer | Crypto Musica | Daiana Denise | Dalmiro Villanueva | David Duarte | David Levill | David Rodríguez | Diego Montes Barrenechea | Federico Romagnoli | Fernanda Prigoshin | Georgina Monti | Héctor Buitrago | Isabela Palacios | Julian Duque | Lucas Montalbetti (Quilla) | Luciana Balbi | Lucas Meyer | Macarena García | Marcus Martínez | Maria Isabel Alvarez | Mariano Martino | Mario Liendro | Mario Ruiz | Martín Giraldo | Matías Hinojosa | Matías Loizaga | Mia Lailani | Natalie Crue | Nicolás Madoery | Raul Guerrero | Rayo Estudio | Reo Nerva | Sergio Borromei | Steph Guerrero | Yaxx Castillo | Yung Spielburg