01
Jun
14

The phonographic market in Brazil, 2000-2013

Brazil is the ninth largest phonographic market in the world according to the latest IFPI report, despite the fact that the revenue from recorded music sales has decreased by 58 percent since 2000. However, the Brazilian market for recorded music is more or less stable for six years now due to relatively high music video sales and the considerable growth of the digital music segment. Thus, the digital music sales have increased by 82.2 percent from BRL 24.3m to BRL 136.7m with music streaming playing an increasingly important role in the sales mix. In the following I highlight the Brazilian recorded music market by figures reported by the Associação Brasileira dos Produtores de Discos (ABPD).

 

The phonographic market in Brazil, 2000-2013

In 2000, the recorded music market was dominated by physical sales (mainly CD sales) that accounted for 98.5 percent or BRL 878m of the total market.[1] In the following year the audio music sales massively decreased by 27.2 percent (BRL 239.0m). The recession has continued until now. In 2013, the sales of all audio formats accounted for just BRL 157.8m – a decrease by 82.0 percent since 2000. The total recorded music market in Brazil, however, did not shrink on the same scale and stabilized in 2007 due to the increasing popularity of music videos. Whereas music video formats accounted for just BRL 13m in 2000, their sales exploded generating a revenue of BRL 180.0m in 2004. Although music video sales fell to BRL 100m in 2007, they remained stable until 2012. In 2013, however, music video sales decreased by 20 percent to BRL 80m.

 

Figure 1 - The phonographic music market in Brazil, 2000-2013

 

Figure 2 - The audio and video music market in Brazil, 2000-2013

 

In the meantime, the digital music market emerged. At the beginning, mobile music sales (especially ringtones and ringback-tones) dominated the revenue mix. With a revenue of BRL 33.8m mobile music sales accounted for 77.7 percent of total digital music sales in 2008. Since ringtones and ringback tones fall to BRL 11.9m in 2010, the digital music segment stagnated.

 

Figure 3 - The mobile and Internet music market in Brazil, 2006-2013

 

The digital music market took off when download sales became more relevant. Whereas music downloads accounted for just BRL 2.4m in 2011, they increased to BRL 23.7m in 2012 and to BRL 44.4m in 2013. However, revenue from music streaming, which was reported for the first time in 2011, was even more important than download sales. In 2013, audio and video music streaming (excl. YouTube and Vevo) generated a revenue of BRL 59.7m.

 

Figure 4 - The digital music market in Brazil, 2011-2013

 

The increasing popularity of music subscription services and ad-funded streaming platforms also fuelled the mobile music market segment, which doubled from BRL 15.1m in 2011 to BRL 32.3m in 2013.

We can see that the recorded music market in Brazil have its special characteristics that explain why the market has been stabilized since 2007. On the one hand, music video sales account for a relatively high revenue share of 25 percent in the total physical music sales, whereas on the other hand, the revenue from mobile music sales and from music streaming was much higher than revenue from music downloads. In 2011, the download market in Brazil was literally inexistent. Due to increasing download sales and the ongoing decrease of physical sales the digital music segment grew from 7.2 percent of the total market in 2007 to 36.5 percent in 2013.

 

Figure 5 - The digital and physical music market in Brazil, 2000-2013

 

It is striking, however, that revenue from music streaming (subscription and music video streaming without YouTube and Vevo) has become less relevant since 2011. Whereas the revenue from music streaming has been stagnated at BRL 60.0m since 2011, music download sales grew by 87.2 percent from 2012 to 2013. This can be blamed on iTunes, which was not available in Brazil until December 2011.

The figures highlight that the transformation of the recorded music market in Brazil from a physical to a digital market was not driven by download sales but initially by mobile music sales and later by music streaming. According to the latest IFPI Digital Music Report (p. 44) 23 legal digital music platform operate in the country. The Brazilian music streaming market has a potential for further growth because Deezer operates in Brazil just since January 2013 and Spotify was launched a few days ago. It, thus, strongly depends on the development of the music streaming business, if the recorded music market in Brazil will grow in the next few years, since the physical music market will further shrink. Mobile music consumption will play a crucial role in the further development of the market, which has a potential for growth, if the digital music sales can compensate for the loss in the physical market.

 

Sources:

ABPD, Reports on the phonographic music market in Brazil, 2000-2013.

Apple Inc. press release, Dec 13, 2011: “Apple Launches iTunes Store in Brazil & Latin America” (accessed May 31, 2014).

Billboard.biz, May 29, 2014: “Spotify Launches in Brazil” (accessed May 31, 2014)

Deezer Blog, January 18, 2013: “Deezer brings its musical revolution to Brazil” (accessed May 31, 2014)

IFPI Digital Music Report 2014 (accessed May 31, 2014)

 

 

 

[1] Since the ABPD reports do differentiate among different physical formats, it is impossible to highlight their relevance in the revenue mix.


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