If there were only one place to be to understand why Latin America is the fastest growing international-music market, it would be during the inaugural Midem Latin American Forum in Rio de Janeiro last November.
The exclusive gathering, featuring some of the industry’s best minds, influencers and decision-makers, was part of Midem’s High Potential Markets Programme. And during a series of sessions, it unveiled facts, figures and thoughts demonstrating how the dynamic region is contributing to the global sector’s current growth.
As MIDiA Research’s media analyst Zach Fuller, one of the speakers, noted in kicking off the debates:
“There is so much to discuss when it comes to Latin American music. Why is the industry growing so fast domestically? Why is the sheer volume of Latin American artists taking off internationally?”
The event provided numerous opportunities for experts to come up with answers by exchanging views on how to develop the advances being made in what used to be a difficult piracy-ridden territory to invest in.
They discussed how the sector should strengthen connections between the different music-sector communities across the Spanish and Portuguese-speaking continent.
And they shared views on the ways to enhance the internationalisation of the region’s talent, a development that is turning the formerly insular region into a major export market with hit acts ranging from Spanish-speaking J Balvin and Bomba Estéreo to Brazil’s Anitta and Far From Alaska.
It was the impressive industry figures on the region from Fuller and keynote interviewee Adriana Restrepo, President of Colombia’s iconic Codiscos and Chair of IFPI’s Latin & Caribbean Board, that illustrated why we need to talk about Latin America.
In his presentation called The Latin Recorded Music Market in Today’s Global Industry, Fuller pointed out that the region had delivered a 17.7% growth in revenue, the highest rate globally, driven mostly by the almost 50% increase in streaming revenues.
Based on IFPI figures, the region’s biggest market Brazil boasted a 17.9% growth in 2017 from the previous year. Evidence indicates both small and large Latin American countries contributed to its increasingly healthy industry.
Mexico reported a 7.9% growth during the same period, while Peru recorded a 21.7% jump. Chile also saw advances at 14.3%, as did Colombia (10.5%), Ecuador (37%) and Uruguay (4.1%).
In his analysis, Fuller noted that the advent of the internet, social media and streaming technology, as well as the almost universal take-up of smartphones, contributed to the surge in Latin music within the region and globally.
This has enabled ambitious artists to find an outlet to reach the more lucrative English-speaking markets worldwide.
So despite the fact that paid-for music remains a tiny portion of the region’s revenues and credit card penetration continues to be low compared to other regions, consumption there has started to soar. This explains the accelerating growth in streaming income and there appears to be plenty of room for more developments.
“Of course, the Latin American users are at a lower price point. But they can now be monetised in a way that the physical and the traditional industry could never have truly dreamed of,” Fuller added.
Codiscos’ recovery after crisis
As a member of the IFPI board of directors, Restrepo backed Fuller’s growth figures with equally detailed data.
And in an on-stage interview by Radio Nacional de Colombia music journalist Luisa Piñeros, Restrepo discussed how the digital revolution saved Codiscos, the Colombian independent record label she is president of. She also stated how the Medellin-headquartered music company made the transition from being a local company into being an international venture.
Codiscos, where the roster of past and present artists include Latin international hitmakers like Nicky Jam, Wolfine, Elvis Crespo and Juanes, hit rock bottom during the global music-industry slump, she said.
“We realised that digitisation was the most important thing. I wanted to keep the more experienced people, such as the A&R people, those who know how to discover talent. And we struck a balance between them and having young people, who understood how technology works.”
The company also survived because it never stopped believing in music. Even when there was no money and employees were leaving, it continued to record artists.
“We never stopped recording, and we always said we shouldn’t focus on just one genre. We have diverse music in Colombia, from pop to reggaeton, which entered Colombia via Codiscos. I believe that success is made when someone understands that they have a dream in front of them. And we have the scope to fulfil dreams.”
Her work at IFPI also made it possible for her to understand the international copyright conundrums and the need to fight the pirates destroying the market.
“Two decades ago, when an artist started, the only certainty was that he would die of hunger because there was no way to monetise the music. Not now. We work with governments to ensure everyone who consumes music must pay. It is an intellectual property like any other in the world and creators deserve fair compensation.”
Tips for Latin artists targeting the international market
Speakers advised artists with global ambitions to have a story the industry and fans wanted to hear.
“From a record label’s standpoint, we definitely try to tell the story of the artist in a global context,” said Grant Dull, CEO of Argentina’s ZZK Records.
Speaking during the session called The Internationalisation of Latin Music – Breaking Beyond Mainstream, he articulated the type of questions an artist’s team should be asking. “Why is this artist and their music interesting? Why is their story interesting? And from there, build the strategy around the record. So I think, storytelling as part of marketing is a huge priority.”
Be prepared to broaden your experience by collaborating with different artists and sounds around the world, said Daniel Zawadzki, partner and head of new business development at Colombian management company M3 Music.
“With Bomba Estéreo, for example, we had a great deal of syncs all over the world that we never expected. But because we were open to working with a lot of different people, we saw a lot of fans grow in different markets that we never expected to happen.”
Mary Nuñez, the Miami-based VP of Sync – Latin for Warner/Chappell, recommends the importance of offering songs with catchy riffs or phrases to an international sync industry where there is still some bias towards English-language hits.
“When you are composing songs and working with your producers, it is important to think about the hook. When we present music to brands and supervisors, we tend to go right to where the hook is. So think about that.”
Jasmina Zammit, the general manager at BMG’s new Brazil office, is convinced that the demand for Latin sounds internationally can only rise.
“I think it is the best time to be in Latin America and to do business here,” she said. “Due to streaming tech, it is so much easier for the artists and managers to see where are the most streamed territories and I believe there will be a lot more artists and bands touring in Latin America, especially in Mexico and Brazil.”Nuñez added that Latin acts should feel confident about targeting the global market, mainly because of the huge size of the Spanish and Portuguese-speaking diaspora. Moreover, recent successes indicate foreign fans feel comfortable with the Latin sound.
“While I think the term ‘crossover’ is relevant, I think we have already crossed over. I think we are there. I don’t think we should be using terminology from 20 years ago. This is our moment.”
If you want to reach rock-music fans internationally, then focus on the quality of your music first and your Latin origins second, suggested Thiago Endrigo, manager/A&R director at Brazil-based Elemess Music N’ Services, whose roster includes Brazilian rock band Far From Alaska.
“They are pretty young, so they are from a generation that was influenced by music from everywhere,” he said of the band, which performed live at the Forum. “We don’t hide the fact that they are Brazilian, but Brazil is not the first element. We try to sell them as good music first and foremost.” He was speaking during the case study session on Developing An International Career: Learnings from Far From Alaska.
A tech/startup region
The Midem Latin American Forum also offered an opportunity for the continent’s tech startups to discuss industry developments during the session on The State of Latin Music Startup Nation.
Speakers from Chile analytics startup Fanear and Mustach – Music Tech Association; Brazil-originated live-music marketing platform Queremos/WeDemand; and Chile-based music social network GrooveList shared their experiences in terms of funding and internationalisation.
“For us, participating in fairs and events like this one is key,” Félix Barros, Fanear’s CEO/co-founder and Mustach’s president, declared.
“We’ve met many professionals, companies, producers, and those from public organisations to develop our services. Before we launched, there had been no data on what happens at live events and festivals, and whether they have an economic, tourism or social impact in Latin America.”
The Mustach organisation aims to promote Chile’s tech skills to the international music market. “Now we would like to start building an international music-tech network offering startup skills, such as Midemlab, or music-tech accelerators such as Abbey Road Red in London.”
Queremos/WeDemand’s co-founder Bruno Natal pointed out that funding is not guaranteed no matter how clever your tech concept.
“We’ve always done things on our own. We’ve always been critical that there is very little incentive given by the government or very little local-business support even though our company had so much momentum,” he said. “The reality is that forming partnerships costs money, time and effort for something that does not always guarantee financial results.”
Be prepared to grab opportunities, even if they come from unexpected places, offered Maximiliano de la Fuente, GrooveList’s co-founder/CMO.
“We’ve never had support from any private organisations or from governments. We signed up with different accelerators 60 times and never got in any of them,” he said. “But last year, we received great support from CORFO (Chile’s state-owned corporation to promote economic growth). It was the first time first time they were helping tech entrepreneurs.”
Midem’s constructive influence
Several participants highlighted the positive support Midem had given to raise awareness for Latin acts and ventures at an international level.
“I am so in love with Midem I could speak forever,” exclaimed Cris Botarelli, a member of Brazilian rock band Far From Alaska. “Performing at Midem was one of the best things to happen to us. Trying to go international is quite hard because of the distance, so Midem was the place to meet new people and we met a lot of people there.”
Bruno Natal, co-founder of WeDemand/Queremos (a finalist at the 2013 edition of the Midemlab, Midem’s acclaimed music-tech start-up pitching contest), added. “Being at events and fairs, such as … Midem… gave you the best chances to be with people you wanted to meet.”
“For us, participating in fairs and events like this one is key,” said Félix Barros, Fanear’s CEO/co-founder and Mustach’s president, when referring to the Midem Latin American Forum.
The current on-going crises and volatility in the various Latin American economies, from Argentina and Brazil to Mexico and Venezuela, have been hitting the media headlines.
But that has not stopped the music businesses at the national levels from making efforts to unify their various endeavours to create a pan-regional powerhouse.
Last year, Brazil was the region’s biggest single market and the world’s ninth largest, according to IFPI data. Yet, it is the sole Portuguese-speaking country on the Spanish-dominated continent, noted Paulo Lima, President, Universal Music Brasil during the session called Creating a Unified Pan-Latin Music Market.
However, he pointed out, Brazil’s isolation is diminishing, thanks to the increasing penetration of digital music, especially streaming services.
“I believe everything has changed since 2017. It was a historical change because, as the only Portuguese-speaking market, Brazil had been excluded from the Latin America map in terms of language and demand. There hadn’t been much demand for Brazilian music outside Brazil,” he explained. “But with the growth of digital, Brazil is in the Top 3 markets on Spotify.”
He continued: “When the barrier falls and you start listening to music from Brazil abroad, you start to increase the consumption of Portuguese songs, wherever you are.”
And it is crucial to boost that consumption throughout Latin America as well, he added. “We have to grow this content here before it is released globally. That is what is happening to Anitta, and to Filipe Araújo, who has been No.1 on Spotify Brasil and has ended up entering the global top charts.”
Laura Mendoza, Country Manager for Colombia, Venezuela, Ecuador, Central America at regional music distributor Altafonte, suggested that those advocating for a continent-wide industry could learn from Chilean artists, who have joined forces to place themselves on the global map.
“They go to their government and they ask for its support, even if what they get is not enough,” Mendoza said. “And then they attend the international markets as a giant group of artists. That is key. Organisation and union are important.”
500 million digital listeners
With the different countries joining forces, Latin America could become a greater force to be reckoned with internationally, stated Juan Francisco Saavedra Plata, CEO/Co-founder at Colombia-based Kuack Media Group, which offers white-label music-distribution solutions to telecoms operators worldwide.
Speaking during the panel on Adapting Digital Strategies to Reach the Casual Music Listener, he said:
“We have over 500 million of those casual listeners in Latin America, and mobile carriers are probably the best distribution channels for music in emerging markets. Right now, your mobile is part of your life. So those casuals have become the largest market in the region, in our opinion.”
He emphasised the crucial role telcos played in reaching Latin America’s music fans before streaming giants like Spotify, Amazon and Apple Music entered the region.
Social media networks have also had a significant influence on the region’s current healthy business, added Ulises Gasparini, Commercial Director at Brazil’s iMusica, which operates Claro Musica, the multi-national Latin-music streaming service.
“I believe that has made things easier. As people communicated among themselves in an uncensored way, they left a trail of data that you can collect to build your strategy.”
Meanwhile, we must not forget the investments made by brands to make digital music more affordable in the still developing economies, declared Jose Abreu, Senior Director, Digital Strategy Latin Iberia region at Sony Music Entertainment.
Prime examples in the US include soft drink giant PepsiCo’s investment in a comedy feature film called Uncle Drew. And the fact that a major telco brand like AT&T owns WarnerMedia, one of the world’s biggest media-and-entertainment conglomerates, is impossible to ignore.
“Branded content is driven by the brands that invest and want to make sure they can get their brands in front of consumers that artists bring to the table,” he stated.
“Branded content is more important than ever before because the way advertising used to be, whether as a banner or a commercial, doesn’t necessarily work any more because the consumer is much more sophisticated.”
Abreu also observed that evolving hardware means next-generation devices, like smart speakers and in-car tech, are destined to influence casual listeners as well.
However, no matter how big the size of the casual-listening community, they need to understand the value of music content. This means the industry finding the most affordable price points for the still unpredictable Latin American economy.
“Content is king, but the business model is queen,” Kuack Media’s Plata declared. “This is a huge opportunity for everyone. Spotify has over 100 million subscribers globally. In Latin America, we have over 500 million mobile subscribers. America Movil and Telefonica have 80% of the mobile market. These giants are investing in music and we want to stimulate and encourage that. Thankfully labels understood that and have helped us to do it.”
Effective copyright law protects
The long-term usefulness of such strategies requires the protection of the music’s intellectual properties, speakers agreed during their discussions on the panel centred on Protecting Creation and Authors’ Rights.
And copyright laws in Latin America could be stronger as they are still dependent on international treaties instead of robust local legislation, said Sydney Sanches, Legal Advisor at the UBC (União Brasileira de Compositores/Brazilian Union of Composers) and a member of the legal committee at international collection societies’ organisation CISAC.
In Brazil, for example, the national law is based on international agreements but is still not designed for digital developments specific to the country, Sanches said.
“We have a very adequate level of protection but the law needs adjustments because of the digital environment. There could be a better definition of what distribution means, what it means to make content ‘available to the public’ with regard to the protection of reproduction rights and public-performance rights.”
In Spanish-speaking Latin America, there is a tendency to keep adding exemptions and exemptions to legal provisions, added Rafael Fariñas, CISAC’s Regional Director for Latin America & the Caribbean. And the terms of protection plus private-copying remunerations vary from country to country.
That chaotic scenario has prompted several major and emerging artists to prefer to sign deals with US-based music companies and copyright organisations, or seek US citizenship.
That Malinchism kind of thinking, where someone believes the grass is greener and more lucrative elsewhere, is major mistake in this context, offered Yvonne Drazan, VP Latin division, West Coast, peermusic.
“Whatever your country of origin, it is important that you are successful in that country first before you consider signing a deal based in the US,” she advised. “If artists will sign a contract directly with the US, it is important for us that they are first registered with the collection society in their local country, and with some of the US societies for the rest of the world. This brings a little more transparency to the deals.”
Angela Martinez, General Counsel at Ozuna Entertainment, which represents Latin superstar Ozuna, advised artists to be much more proactive and pragmatic about protecting their creative works.
“Ultimately, the artist is responsible for delivering to the record label all the copyrights he or she is entitled to on the track. So you need executives to be on top of them to make sure all the paperwork is turned in before an album, or single, or video or song is done. And it is up to the songwriters to register their share in songs as soon as possible.”
Yet, there have also been positive developments when it comes to copyright protection in the region. Being signatories to global treaties is a major step forward, Sanches said.
Songwriter Aloysio Reis, who is also Managing Director at Sony/ATV Music Publishing’s office in Brazil, argued that streaming technology will help boost artists’ earnings.
“Today, more than 20% of all streaming revenues in the world are from Latin America. And that does not include the Latin market in the US,” he said.
“And in Brazil, the number of streamings made in premium is already much higher than the number listened to in free mode. This is the opposite of what was happening in the first half of 2018, which means that converting from free to premium is actually happening.”
Furthermore, the launch of The Hub, a copyright identification and processing platform, has successfully identified 87% of the content made available by digital service providers. “I think it is one of our biggest wins,” Reis said.
In addition to acknowledging the magnitude of casual music listeners and copyright protection in the digital age, the Latin-music market must remain proud of its heritage, Cedric David, founder of Colombia-based booking agency Afropicks, stated on the Pan-Latin Music Market panel.
“We have the talent and the products. Are we going to let others take advantage of us again? Where is the revenue? Where do the taxes go? We need to generate the economy in our countries,” he said about the trend of paying foreign artists better than local performers.
“The Grammy is great. So are the Billboard awards. But both come from the North. Why do we not develop our own? Why do we not ask the mega festivals promoters, who bring the mega Anglophone artists here and pay them US$300,000 to $600,000 to be a headliner, to treat us with a little more respect?” he added.
“We need local investors to pay for local artists who succeed and attract. Self-esteem in Latin America is the first thing I recommend for us to work on,” he said to emphatic applause from the Forum’s audience.
Midem organised the Latin American Forum in association with Sebrae (the Brazilian Micro and Small Business Support Service) & Estrombo, Apex Brasil, Gouvernement de Rio & Crab Sebrae, Canal Brasil, CISAC, ICMP, ECAD, IFPI, Industria Musical, Prensario Musica and UBC. You can watch all of the above sessions in video, here.