Music NFTs LATAM

Sales

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:

1. 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.
2. 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.
3. 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.

Countries

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.

Trajectory

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.

Gender gap

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?.

Platforms

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:

1. 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.
2. 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.

Multiplatform artist 

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.

Musical Genres

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%.

This trend is homologous at a global level, since according to Water & Music’s 2021 report, 65% of NFTs sales had electronic as the main genre.

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.

Blockchain

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.
Basseado, Argentina.

Type of sale

There are different formats in which sales of NFTs can be executed. The following table describes the main ones:

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:

• Community

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.

• Tickets 

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.

• Experiences

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.