Author: Leo Morel
In 2022, the Brazilian recorded music market revenue grew for the sixth consecutive year. Since the pandemic the overall music sector has been experiencing even more rapid growth: the repressed demand for live events has contributed to ticket sales increase for shows and festivals countrywide.
According to data published by Pro-Musica, Brazil’s official institution of record labels, the Brazilian phonographic market grossed, in 2022, 489 million dollars in terms of revenues, representing a growth of 15.4% as compared to last year’s. Streaming and performing rights together accounted for 99% of this amount. Currently Brazil occupies the ninth position in the global music market ranking. The country had not been among the ten largest music markets since 2020 due to exchange rate issues and to the impacts of the coronavirus pandemic, which sharply reduced musical activities.
A nation in flux – and growth
It was not just major labels that displayed growth; the independent sector also developed in 2022. According to data from Midia Research, independent labels and artists direct segment presented an increase of 13.9% and 17.9%, respectively, in terms of global revenues.
Brazil’s current growth scenario has fostered the insertion of new music labels in the local market, founded by entrepreneurs encouraged by the sector’s optimism. These labels aim to discover and develop emerging talents to invest on and profit from. Such agents are usually involved in processes such as music production and/or music promotion to offer artists expertise and a labor structure capable of developing musical careers.
The optimism of the Brazilian music market is also linked to the diffusion of video-on-demand services in the country, which has led to a growing number of productions focusing on the domestic market. The increase in local films and TV productions has led to increased demand for soundtracks by Brazilian artists which has in turn led to an emergence of new music publishers seeking to enter Brazil’s music synchronization market. According to data provided by Pro-Musica, revenues from music synchronization in the country increased by 19.1% in 2022 compared to the previous year.
Streaming boosts the DIY market
As elsewhere in the world, this diffusion of music streaming services and the easy access to music production tools have contributed to a growing number of artists with no business relations with record labels, the so-called artists direct segment. Despite the facilities for recording and distributing music, there are great challenges to forming an audience and developing a solo career.
“DIY artists emerged from the various disruptions caused by digitalization in the music market. With a lower entry barrier, access to the market is much more democratic, but, at the same time competition has increased likewise.” says Carlos Mills, president of the Brazilian Association of Independent Music (ABMI) and member of Merlin’s board of directors
Data shared by one of the main Brazilian music distributors, Tratore, exclusively for this article, has helped understand the importance and presence of the artists direct segment in the country. In 2022, these artists represented 86% of all contracts signed with the distributor. In 2021, this percentage was 85.4%. When analyzing the total number of recordings distributed by Tratore in 2022, we find that 53% were distributed by the artist direct segment. In 2021, that number was 49.9%. Despite the slight variation between 2021 and 2022, it is possible to notice the significant presence of this group in the Brazilian music market.
The Importance of Industry Skills Development in Brazil
However, some Brazilian market experts contend that these unsigned artists only have competitive advantages when supported by professionals in areas such as marketing and copyright. The distributors in Brazil are quickly stepping into the fold. “Artist Direct is a great strategy for well-structured artists with a variety of well-defined support,” says Maurício Bussab, founder and Director of Tratore, which provides marketing support to DIY artists.
This rise in competition in Brazil has also been noticed in the digital music distribution segment with the arrival of international companies which aim to develop their presence in the country. According to Arthur Fitzgibbon, Manager Director of ONErpm, one of the main digital distributors in Brazil, “the moment is very good for the market and for independents and this growth has been attracting the attention of international companies such as Tunecore, Distrokid and SoundOn which have currently been looking very carefully at the Brazilian market.”
Carlos Mills from ABMI also sees the trend developing in Brazil. “A support team backing up the development of an artist is a more than essential requirement. The different work fronts (creation, shows production, content production for social networks, marketing, search for partnerships with brands, etc.) make the process of managing a professional artistic career, humanly impossible for a single individual.”
Tratore’s Bussab believes that, even with the ease of access to the market for independents, the value that a label brings to independent artists will never expire and he adds “… no matter how little money a label has, it is a curatorship, it is an element of agglutination of a musical genre, from which festivals and catalogs can emerge. A structured music market needs labels and specialized professionals to develop careers.”
A structured market requires trained professionals and trained artists. The scenario of optimism and ease of access to the music market have attracted professionals and artists lacking basic knowledge to develop businesses and careers. For artists, lack of preparation or support can jeopardize their careers, for example when an artist signs a contract without the support of legal advice. And in the field of business, creating an enterprise without planning can contribute to the folding of activities in the short or medium term.
Leo Morel is a music market analyst, researcher and consultant.