Lessons from the Brazilian music industry (#midem)

It’s a big year for Brazil, with this summer’s World Cup turning the global spotlight on the country. It’s an interesting time for its music industry too, and a panel of experts gathered at Midem today to discuss what’s happening there.

The panel, moderated by Bruno Boulay, head manager of bureauexport São Paulo at the French Embassy / SESC, comprised: Dauton Janota, CEO of Pleimo.com; Luis Justo, CEO of Rock in Rio; Marcelo Soares, CEO of Som Livre; and Marcel Dadalto, an artist and songwriter from Brazilian band Zémario.

The first topic up for discussion: Brazil’s musical diversity. Soares talked first: “It’s a country of continental dimensions and with very different cultures and musical genres that come with those cultures,” he said.

“If we’re talking about the market for recorded music, there are a couple or maybe three genres that account for 90% or maybe 85% of sales. There is the mainstream concentrated on these three different genres. “But if you look at the remaining 15% of music, you’re going to see a huge amount of genres, and new artists appearing every year.”

Soares’ company, Som Livre, is the largest Brazilian record label, with a 20% market share. How does it compete with the big majors? Firstly by concentrating on Brazilian music, and then by seeking partnerships with other independent labels around the world, to give them a way into the Brazilian market.

“Today, the Portugese is still a very huge barrier for Brazilian artists to reach worldwide success, but specific great songs are having more space than maybe they used to have 10 years ago,” he said.

Onto Justo, who talked about Rock in Rio, and the wider live music market in Brazil. The festival has been going for 30 years now, and in 2013, the concert had more than $52m in sponsorship and turnover of $100m from ticket sales.

“Brazil now is in a good moment of expansion, but in the live market you need to be different to win. We face now in the past years some live promoters that boomed, and after that the bubble burst. Some big companies dedicated to live shows in Brazil, especially bringing international artists, weren’t doing well.”

The cost of concert tickets has been a sensitive issue in Brazil in the last year, said Boulay, asking how Rock in Rio manages this. A ticket costs $150 per day for the event, with 600,000 tickets selling in four hours, as well as a presale that sold out in a similar time even though no bands had yet been announced. He admitted that there has been unrest around other tours, citing Lady Gaga’s first visit to Brazil as one example.

“It’s something that is tricky how to price. I think that’s worldwide, not only Brazil,” said Justo. Next for Rock in Rio: more global expansion: North America, and talks with three other Latin American countries (“we will probably choose one of them”) and Germany.

Next to speak was Janota from streaming music service Pleimo.com. “We think about the long tail, we think about the mainstream,” he said. “We think about the cycle. In a way, the artist needs to get some revenue, so we put the artist at the centre of all the revenue streams. We have streaming, but if they bring some subscribers, they earn. They can sell them merchandise, tickets, videos. Also, we can give a report to the venues which is the artists that can make the full house.”

He added that Pleimo is working hard to ensure that for new artists, “these guys can record a second album” – a contentious debate around streaming elsewhere in the world. “We think about a solution for these people. We are here to try to explain to the industry that we need to change the model… We can join the artist, the record label, the festivals and venues and everybody to stay together and make this chain as a cycle, so we can grow the market in Brazil today.”

Deezer and Spotify both have designs on Brazil, but Janota took a pop at the models of the big Western streaming services, citing the infamous (and, er, not strictly accurate) stat on Lady Gaga, before abruptly being drowned out by an enormously loud samba band playing outside the conference hall. Suffice to say, Pleimo.com is positioning itself as a more artist-friendly alternative to its rivals from overseas.

Over to Dadalto, to give an artist’s view of the Brazilian music market. “Most bands in Brazil, they release the first album then disappear, often through lack of support,” he said. “This is a big problem in Brazil right now, to teach the audience that a band needs the audience’s support… If we had stayed only in Brazil, we may have stayed only on the first album.”

His band instead have signed label deals overseas, and toured in Europe, helping them to survive. “The whole scene in Brazil is concentrated in Sao Paulo and Rio: it doesn’t handle the whole country,” he said. “It’s starting to change, but for my band, which is an independent band, it is really difficult to be in a continental country like Brazil and organise a tour. Sometimes it is easier for us to organise a tour in Europe, which is crazy to say!”

Soares talked about Som Livre’s artists, and how it works to spread their music across the country. “Digital distribution levels the workplace for everybody. It’s easier there. For physical distribution it’s very tough, with the huge dimensions of these 27 states. There are a few big cities which currently have no record stores at all.” He agreed that live is difficult for emerging artists, though.

The panel ended with some advice for foreign artists and companies looking to get into Brazil. “There is a statement from a poet that ‘Brazil is not for amateurs, it’s for professionals!’,” said Justo. “That is true… it’s a very complex environment, but with all the opportunities you have in a country that is growing, and is the size of Brazil… Be prepared for the wild life!”

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