11 de September 2019
The app that lets fans be partners with their favorite artists is coming to Latin America
Using blockchain technology, Vezt allows followers of music artists to invest in their songs in exchange for royalties. This U.S. company has selected Bogota as its headquarters for Latin America, where it plans to invest about two million dollars as part of its regional expansion.
Over the past few years, the music industry has undergone a transformation, with technology playing an influential role. According to figures from the IFPI (the organization that represents the interests of the international recording industry), in 2018, the recorded music market hit its fourth consecutive year of growth, bringing in its highest earnings in over two decades – a feat largely driven by paid streaming services.
Through these services and through videos on platforms such as YouTube, music artists have found new resources for monetizing their creations. An example of technology transforming the music industry is Vezt, an app created in the U.S. that gives composers, artists and producers the opportunity to be financed directly by their fans. It turns followers into the artists’ partners and allows them to be a part of the music industry, earning royalties from their songs in proportion to the amount they invest.
According to Gerardo Galvis CEO for Vezt in Latin America, this technology allows artists to leverage on their fans and make them partners by offering investments in percentages of their songs in exchange for a share of the royalties from their work.
“Vezt collects for fans the royalties that are made from copyright collectives, record labels and publishers and it tracks these royalties through its own blockchain technology,” Galvis states, clarifying that any copyright owner is welcome to Vezt including composers, producers, publishers, record labels and other industry members that can sell their rights on the platform.
The process of acquiring a percentage of royalty rights involves using a mobile app that can be downloaded from Android and iOS stores. The app lists the song rights for a finite period, specifying the amount that is expected to be collected, how long it will be offered for, the percentage of the song that is available and the number of years the royalty rights apply for. Prior to being accepted on the platform, all the songs go through a filter system to ensure the title has earned royalties before and that it is rightly owned by the person offering it.
After the transaction is completed, the platform writes a record in the blockchain, creating a smart contract. This guarantees transparency and verifies the ownership of those who have made acquisitions for a percentage of the available royalty rights.
In the United States, this app has made over 17,000 transactions from 4,000 users to date. In this market alone, in 10 months of operations, the platform’s users have grossed over half a million dollars with songs by artists such as Beyoncé, Maroon 5, The Weeknd ft. Daft Punk, Mac Miller, Panic! At The Disco and Cardi B.
Bogota: The headquarters for Latin American expansion
Colombia has become one of the most attractive countries in Latin America for businesses in the creative and cultural industries, accounting for about 3.3% of Colombia’s GDP. According to figures from the investment promotion agency Invest in Bogota, between 2008 and 2018, Bogota itself was the main recipient of foreign investment in the region for creative industries, rising above other capital cities such as Buenos Aires, Sao Paulo and Mexico City.
This has led more companies to see both Colombia and Bogota as ideal places for performing regional operations. In addition to South Korea and the United States, Vezt has selected Bogota as the point of departure for the company’s regional expansion. The company will invest about two million dollars to launch operations in Colombia and Mexico, “about 40% of which will be invested in Bogota, depending on how the details of operations are finalized.”
As Galvis explains, “Throughout the world, Colombian music is currently trending thanks to its diverse fusions and rhythms, interpreters and producers. In addition to its strategic location in the region and to the feasibility of current market conditions, this makes Colombia the point of departure for expanding Vezt throughout Latin America.”