LIFESTYLE

In Brazil, the Future of the Music Business is in Cell Phones–And Already Here

Ed Ho of mSpot listens to the song, "Bad Romance," to a Lady GaGa album, "The Fame Monster," using the new music service from his phone in Palo Alto, Calif., Monday, June 28, 2010. The new music service launching Monday lets you listen to your music collection from any computer or Android phone over the Web. MSpot's service stores your music on its computers and lets you access it remotely through a Web browser. (AP Photo/Paul Sakuma)

Ed Ho of mSpot listens to the song, "Bad Romance," to a Lady GaGa album, "The Fame Monster," using the new music service from his phone in Palo Alto, Calif., Monday, June 28, 2010. The new music service launching Monday lets you listen to your music collection from any computer or Android phone over the Web. MSpot's service stores your music on its computers and lets you access it remotely through a Web browser. (AP Photo/Paul Sakuma)

After the death of popular music download sites Napster and Kazaa, Brazil went in a very different direction it came to buying songs. According to Universal Music Group, 30% of revenue in the country comes from digital sales. Within this amount, 30% of the sales are online and 70% comes from cell phones – almost the opposite from the rest of the world, where online represents 80% of the total. The music industry sees this as a new breath in sales in the biggest market of Latin America.

Part of the phenomenon is explained by the recent growth of the middle class in Brazil. Economist Ricardo Amorim, an expert consultant in emerging markets and a former strategist at WestLB bank in New York, explained the issue: “There are three times more users of cell phones in Brazil than [personal computer] users. Also, here there are more mobile phones than people,” said Mr. Amorim.

The biggest Brazilian label, Som Livre, has caught on to the trend. The company is set to launch a site called Escute (Listen). The goal is to goose legal music downloads. Som Livre still has a relatively small percentage of revenue coming from mobile purchases: 5%.

“We are trying to make a platform with easy navigation, a vast catalog, cheap packages and easy payment by cell phone, as well. The advantage is that the customer can buy 24 hours a day, wherever he is,” said Isadora Wegner, marketing analyst of Som Livre. She also said that Escute will allow clients to purchase entire albums; until now, each track has been sold individually.

Brazil already has other popular music-download pay sites. One of them is Sonora. Part of Terra Networks, Sonora charges a monthly fee which allows customers to download any song they want.

Despite strong mobile sales, executives from the sector see the market as still challenging. Piracy remains a big problem. “People really don't respect an artistic piece as they respect a product like a car, for example,” said the president of Som Livre, Leonardo Ganem.

Amorim, the economist, agrees that focusing on mobile phones sales is a good idea for the music industry. “The population's income is growing and the trend cannot be reversed,” he said.

For 17-year-old high school student Fernanda Nagami, there are simple reasons to buy music with her cell phone. “It’s good to have your favorite songs on your phone and it is totally affordable,” she said.

 

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