Five years ago, in the debut of SIM São Paulo, the Brazilian phonographic industry entered, for the second consecutive time this century, the top 10 worldwide ranking in terms of profit. According to the International Federation of the Phonographic Industry, Brazil reached the 8th spot in 2012 and the 9th the following year. At present, the country ranks 11th, and the decline is explained by the country’s economic turbulence in the past two years. Despite the downturn, we are certain that the Brazilian market is on the right track, overcoming a recent past full of uncertainties. “(At the turn of the decade), everyone was a little depressed, no one knew what was going to happen”, remembers Mauricio Bussab, founder of the distributor Tratore. “Not anymore. Our industry is now fully functionable, sustainable and paid up”, he affirms. “The last five years were crucial. Basically, you couldn’t earn money with digital music, but this has now changed”, he sums up.
Bussab’s quotes coincide with the launch of two major digital players in the Brazilian market. “We arrived in Brazil in 2013 after spotting an opportunity”, says Bruno Vieira, Deezer’s Country Manager. “Brazil is now amongst the Top 5 Deezer brands, and we see a large growth potential”, he reveals, displaying optimism towards the future. “I see a far more promising market in five years’ time than I did five years ago”. Spotify, on the other hand, arrived in Brazil in 2014. Since then, Roberta Pate, artist and label manager in Brazil, has highlighted the growing interest (even bigger in 2017) that artists have been showing in understanding and working more efficiently with digital content, as well as with maturing record companies, publishers and distributors. “I sense a major change in the mindset of the industry”, she explains. “It underwent a major revolution and adapted, but the consumer is changing much quicker. For us, it’s important to keep up with them. Or even outpace them”, she believes.
LICENCING AND SYNCHRONIZING
The good moment for streaming also reverberates in other areas. “The Tratore catalog saw a seven-fold growth in five years”, Bussab reveals. Arthur Fitzgibbon, Latin America Director of aggregator ONErpm, compares: “In 2012, we did 30 daily launches on average; now our system can handle more than 500 daily launches. And there are no signs of slowing down.” Arthur believes that the market tends to grow ever stronger. “The secret for artists will be in building and negotiating their own audiences”, he claims. Mauricio Tagliari, director at YB Music, touches on an issue supported by Bruno Vieira, from Deezer: the market requires education. “Industry pundits think they know what digital means, but they don’t”, says Bruno. Deezer “educated” partners through workshops, videos, training and events with artists, businesspeople and record companies. “They are now reaping the fruits”, he warns. Tagliari, speaking of licencing and synchronizing, argues that we need “to educate everyone: film directors, producers, agencies, clients and artists.” A lot of people fall prey to the “visibility” tale, and they give away their music for free for a film. There’s money for everyone, from the gaffer to the filmmaker, including the make-up artist. Why not the musicians?”, he questions. In the 2016 IFPI statement, synchronization accounted for 1% of profits in the Brazilian phonographic market (2% of the world market), and Tagliari believes there’s plenty of growth ahead. However, he notes: “the US market is far more consolidated. Its products are available at every price range and artist size. Here, it’s still a luxury item”
Luiz Augusto Buff, founding associate at 1M1 Arte, reinforces Tagliari’s views: “We are a few years behind some international markets, which take licencing very seriously, recognising the various artist and production levels with a different price tag”. According to Buff, there was paradigm shift in the industry: “In the past, you’d do anything in order to sell records. Nowadays, you make records in order to sell anything”. In other words, in the past you’d license music for soap operas, films or adverts in order to leverage the phonographic product itself. “Not anymore. Nowadays synchronizing is a product per se, and a market opportunity”. Professionalization is increasingly important. “We are witnessing a period of audiovisual transformation with Netflix, YouTube, virtual reality and games, which represents further growth opportunities”. In 2017 the Brazilian government film agency ANCINE for the first time created a public framework in which games are listed as an audiovisual product. “This means that audio and music can also benefit from the incentive”, he says.
What about THE FESTIVALS?
The live music sector has also experienced major transformations, with festivals such as Rock in Rio and Lollapalooza becoming firmly established and the indie ones facing challenges. “With the detaching of the culture from the public sector, young festivals with a small footprint became weaker”, notes Fabrício Nobre, director of the Bananada Festival, in Goiana since 1999. “However, those with strong connections with alternative scenes and cultural endeavors in their cities kept their heads above water, and they have been doing great editions despite the crisis”, says Nobre mentioning a few examples: Coquetel Molotov (Recife), DoSol (Natal), Satélite 061 (Brasília), Se Rasgum (Belém) and El Mapa de Todos (Porto Alegre). Meanwhile, Rock in Rio moved to a larger location and celebrated another successful edition. “The Festival became a large music theme park, where entertainment options acquired the dimension of an amusement park”, the company CEO Luis Justo sums up.
T4F has been in charge of Lollapalooza Brazil since 2014, when it replaced GEO. The company will extend the Festival to a total of three days in 2018. “More than half of our capacity for the three days has already been sold”, Entertainment Director Alexandre Wesley tells us. He thinks that the maturity of the event, which will see its 7th edition, is to be credited for such milestone.
“Returning to the three-day event has more to do with the evolution of the festival than with trust in the market”. Still, Alexandre recalls that 2012 and 2013 were very difficult years for the sector, and that the tendency in 2017 is to follow the same dramatic path due to the economic crisis. Yet, the outcome was positive: “the volume of concerts this year reveals a hot marketplace. It was a very good year”, he celebrates. “Looking at 2018, we can’t help but hope that there’s yet more potential to be uncovered”, he thinks.
“The music market has never been so strong and growing”, believes Sandra Jimenez, Head of LATAM Music at YouTube and Google Play Music. She also firmly highlights the strength of the Latin American market in the moment the phonographic industry is reclaiming its power: “Brazil and Latin America are the epicenter for music consumed around the world”. She goes on: “ If you look at the ranking for the most played songs this week, you will see that Latin America is in the Top 10, and the number 1 viral video is the new song by Anitta & Allesso ‘Is that For Me’! That’s phenomenal!”
Warmed up by the soaring figures of the music market worldwide, the future of the Brazilian market is also promising, and the mood is very optimistic. In 2016, Latin America was the fastest growing market in the world for the 7th consecutive year, according to IFPI. And it hasn’t lost momentum: the first half of 2017 was very positive for Warner Music Brazil, according to the company’s president Sérgio Affonso Fernandes, in an interview to the British website Music Ally, assessing expectations in the Brazilian market. “We anticipate an equally strong second half”, says Fernandes. He believes that the digital infrastructure is continuously improving, and so new business opportunities are opening up. “I believe that, as a whole, revenues will grow in 2017”, the Warner president forecasts.
This is just the beginning of the good times.