Major Labels Talk 'Isolated' Brazil, Streaming Prices and Data, Data, Data at Midem Event in Rio de Janeiro
Brazil's "isolated" music market must align itself more tightly to Spanish-speaking Latin America if it is to seize on the huge opportunity created by the explosion of digital music and streaming, a label executive said Tuesday.
"It's a mistake for Brazilians to forget about their neighbors," said Paulo Lima, the president of Universal Music Group in Brazil, speaking on a panel at the Midem event in Rio de Janeiro.
The rise of digital music, especially streaming, and the "'Despacito' effect," have "changed the position of Latin America in the world," Lima said.
Brazil, as the region's largest music market, stands to benefit more than any country.
But the country has always been isolated because of Portuguese, which has often kept it out of regional marketing plans, Lima said. And the country that gave birth to bossa nova and today's burgeoning funk dance scene has an almost obsessive passion for its own locally produced music.
The time has come for the Brazilian industry to "get on the radars of all the Anglo artists looking to collaborate" or who need a track to enter the Brazilian market, Lima said.
The search for strategies for how Brazil and the rest of Latin America can capitalize on the streaming boom emerged as a main theme in the final day of Midem's first-ever Latin America conference. Industry professionals at the invite-only event mulled over how to create a united pan-Latin American music market, how to address disparate copyright rules, and how to apply reams of data and pricing strategies to monetize "casual" music consumers.
Overall streaming revenue in Latin America has been growing for five straight years, at a rate that is twice that of the rest of the world, said Adriana Restrepo, the chair of IFPI's Latin American and Caribbean Regional board, in a presentation on Tuesday.
Latin Americans spend two-and-half hours a day listening to music on their cell phones, she said.
Yet amid this "notable digital consumption" and the global success of "Despacito" -- from the hit global collaboration of Luis Fonsi and Daddy Yankee -- "there is still a lack of a big plan for Latin America," Lima said.
What is needed, several industry professionals said Tuesday, are strategic plans, solidarity and organization.
"If we want to be successful, we need to be organized," said Laura Mendoza, the country manager for Altafonte Music, a distributor. She pointed to Chile as an example of how a country's music industry has organized to get its slate of musical acts into various international markets.
The region faces a number of challenges to better unify, not the least of which is patchwork of rules among the countries relating to booking fees, and copyright protections, Midem panelists said Tuesday. Cedric David, the director of Afropicks, a booking agency for Latin American and African music, said that Latin American bookers were "underpricing" local talent, while paying much more for international artists. "This is not normal, and if we want to identify obstacles this is one," he said.
One thing Latin America does not lack is data about consumers.
The new data-driven music industry has given rise to startups like Fanear in Chile. Using data collected through its app, Fanear generates impact studies about festivals, which it has provided to the Chilean government, said Felix Barros, Fanear's founder, speaking Tuesday at a panel about Latin American music startups.
For artists, labels and managers, "we have never had so much analytic data and metadata to analyze the path that a singer should take in the region," Lima said. "Every track today should be looked at as its own separate business."
That data has also been critical to understanding how to better price streaming-service offerings. In Midem's final panel, label executives and marketers discussed strategies for winning over so-called "casual" consumers of streaming music.
Casual music users -- those that don't want to pay for premium offerings -- include the more than 500 million mobile phone users in the region.
"In the context of Latin America, the casual consumer means getting to the mass market," said Jose Abreu, Senior Director for Digital Strategy for Sony Music Entertainment in the Latin-Iberia region. "With all the services that exist now we are still just talking to a small percentage of consumers."
One key has been persuading large labels like Sony to create limited music catalogs and to allow streams to be sold on a weekly and even daily basis.
Juan Francisco Saavedra, the founder of Kuack Media Group, a digital content strategist, recalled his effort to win over Abreu for Sony to allow for a variety of pricing packages for Latin Americans.
"Nowadays, in some countries like Jamaica or Haiti or in Bolivia, the most popular services are premium daily services," Saavedra said. Consumers "do want a premium service, but they are not capable of paying $5.99 -- forget about $10. These mid-tiers and pricing points are so important to penetrate emerging markets."