YouTube Steals the Show at Midem's First Latin American Conference

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YouTube is winning the music streaming battle for Latin America, which is growing twice as fast as the rest of the world, according to data released in Rio de Janeiro on Monday by MiDIA Research, at the first-ever Latin America forum for Midem.

From 2013 to 2017, while the global streaming market grew at a rate of 91 percent annually, streaming as a whole more than doubled -- 186 percent -- in Latin America.

"Latin America -- particularly Brazil and Mexico -- are test cases of the global streaming market," said Zach Fuller, a MiDIA analyst who delivered the data.

Driving the stunning streaming growth in Brazil, the region's largest market, are ad-supported streams from YouTube, though Spotify and Deezer, who have aggressively partnered with local cell providers to offer streaming bundles, are contributing as well. The packages are helping to overcome a relatively low penetration of credit-card users.

Just in 2017, Latin America saw a 49 percent jump in streaming revenues, buoyed by an 18 percent uptick in Brazil. "Going from 2017 to 2018, nothing can match what is happening with Latin American music," Fuller said.

While Peru, Colombia, Chile and Mexico are growing faster, it is Brazil, in spite of its economic woes, that is in the laser sights of streamers like Spotify and Deezer, who have been operating the country since 2014 and 2013, respectively.

Only 52 percent of Brazilians are using credit cards, up from 35 percent in 2013, according to the country's Central Bank. More important to the digital music players: there are 220 million cell phones in the country, Fuller said -- well more than its 209 million citizens.

Brazil and its neighbors are catching up to the rest of the world in digital-music penetration after a disappointing early experiment by Apple with downloads. When Apple launched its iTunes store in Brazil in late 2011 it did it in English, with prices in dollars and only accepted international credit cards. "So it made it only for the elites, and that model didn't work in Brazil," said Leo Morel, a Brazilian analyst for MiDIA.

"Before the advent of smart phones and streaming it appeared like there was little impetus for the record industry to pay as much attention to Latin America," Fuller said.

Despite impressive growth by Spotify -- Latin America was its fastest-growing ad-supported segment in the third quarter -- it is YouTube that is dictating the growth trajectory.

Latin American artists had 13 of the 40 most-viewed music videos uploaded in the world since 2016, Fuller said. "That is an incredible statistic and is likely to drive growth in the future," he said. "YouTube has effectively become bigger and better at making these hits."

Brazil's rapid streaming adoption was one reason why Midem, the French b2b music industry market, chose Rio to host its two-day forum. The invite-only event features panels with artists and industry professionals, and nightly concerts with Brazilian artists and some discovered by Midem in other developing countries, like Cameroon.

On the forum's first day, a panel also explored the internationalization of Latin American music. Sync executives and indie label heads stressed the importance of landing syncs in movies, TV shows and video games as a way to launch Latin artists.

"It is important that we identify particular TV shows and series on Netflix and Hulu and Amazon," said Mary Nunez, the VP of Synch for Warner/Chappell Latin. "A lot of artists want to be discovered in a more organic, authentic placement, and sync is a wonderful place for that to happen."

Grant Dull, the CEO of ZZK Records, a Buenos Aires-based electro-cumbia label, recounted how one remix by Chancha Via Circuito that was synced for AMC's "Breaking Bad" changed the artist's fortunes. "All of a sudden he became a star in Argentina and he is known for that scene where Walter White is burying his money in the desert," Dull said. "For Chancha, it was a before and after."

Video games, especially internationally popular titles like FIFA Football/Soccer, are also a key platform, said Daniel Zawadzki, partner and head of new business development at M3 Music, a Colombian indie label. "Those video games are well-curated," he said. "So not only are you going to have your track there with a really cool video game but you are also going to be with other great artists in that game, so the word of mouth keeps growing."

Nunez, in discussing how to emulate the trajectory of Rosalia, the Spanish flamenco singer that crossed into urban music, bristled at the "crossover" label. "I think we have already crossed over," she said. "I don't think we should be using terminology that is from 20 years ago. This is our moment."

The recent Lollapalooza lineup in Chile, for example, features Juanes, Kendrick Lamar, Rosalia, Tiësto, and Arctic Monkeys. "The crossover already happened and now there is no formula for an artist," Zawadzki said. "Everyone has to work on their own craft."

But every artist can use a break. In the day's final panel, two members of Brazilian metal band Far From Alaska recounted the story of how they rose from obscurity in Brazil's Northeast.

It started with a bit of fandom. After being invited to play at a festival in Sao Paulo in 2012, the band's synth player, Cris Botarelli, tracked down Shirley Manson, the lead singer of Garbage, in a hotel lobby. "She was so sweet," Botarelli said in an interview on Monday. "I didn't even have any music to give to her, it was like our second show." Three months later, Manson woke up one day with the name of the Brazilian band in her head and went on YouTube, said Emmily Barreto, FFA's lead singer. Manson wrote a long post on Facebook praising the band that went viral.

Then two years ago, Midem's "artist accelerator" program effectively launched the band in Europe. At Midem's 2016 edition in Cannes, the band mates participated in workshops with industry executives and then performed at a concert on the beach. There they were approached by Damien Chamard Boudet, a promoter with Live Nation, who invited Far From Alaska to play on the main stage at last year's Download Festival in Paris.

"There were 30,000 people there and they were all singing our songs, which was amazing," Botarelli said.