Streaming has boosted spending in emerging markets, as in Latin America , which was the region with the highest level of revenue growth, with a 12.0% increase , for the seventh consecutive year . Digital revenues grew 31.2% and already account for 50% of revenues, driven by an increase in streaming revenue of 57% .
After the publication of these numbers , we want to know in each Latin American territory how it is really growing and what are the factors that drive it, for this we have talked with Martin Liviciche, Founder of the Argentine label "Sonoamérica" and Country Manager CD Baby Argentina to know A little more closely the territory and meet the newcomer of the digital distribution company to Argentina.
IM: CD Land in Argentina, the fourth country in which it has presence in Latin America after Mexico, Colombia and Chile. What do you expect or what CD Baby is looking for with this entry in Argentina and what added value will it offer in this market?
CD Baby has had its strongest presence in Latin America in Brazil for about 5 years, where it has a giant market to attend. Since about a year ago the company has begun to establish its presence in other countries of the region . We landed heavily in Latin America with local representatives, which is quite unusual and novel for the industry, because what is customary is to work at a distance as do many aggregators that work here as The Orchard, which is now part of Sony , and other Like Altafonte or Believe. Part of CD Baby's challenge in Argentina is to begin to address more directly the needs of this market reconfiguration, with an almost educational vision that has the objective of empowering the same user.
An interesting part of CD Baby's offer is its parallel platforms as a bet on the knowledge of DIY, how the independent industry can have the same tools as any large company at hand. Our entrance implies what is the personal treatment, the face-to-face meetings with each actor of the industry, with the musicians, with a local presence and a 800 free telephone that can be communicated daily in Spanish for any consultation related to the technical part of the service. The vision is to re-educate the client, the musician, the independent label so that they can appropriate these tools, they are several challenges at a time.
IM: Regarding your comments on re-educating and empowering the independent musician, do you think that digital training is lacking in both record labels and independent artists in Argentina?
Yes, totally. I think we are still not aware of this new era, we still come very hand in hand with the physical dragging a little old school business . I think we should make the exercise of adapting to this new configuration of the market and be aware that today the digital part is almost everything, that without going any further as it ended with piracy.
IM: How did piracy end?
Well, I'm a teacher at the university and the other day I did an exercise to see who downloaded music by P2P and in short, nobody else does it, we're talking about boys between the ages of 17 and 30. Everyone has their online listening platform, Spotify or Deezer or Google Play or YouTube on their phone or on any device, or on their computer, and listen to 24 hours of music with a very economical subscription. It seems to me that what we do not realize is still how it is reconfiguring and this digital Darwinism that we have to appropriate those who work in the industry to try to make a real profit. The growth is now, is today, is now.
IM: You say that piracy has waned almost in its entirety, does the physical format still sell?
I really do not think so. The amount of people who have music equipment with a CD drive is tiny. It seems to me that although the physicist will continue to exist and is a tool that we still need, that journalism still requires it as something fundamental to write a note or to review a disc . It is almost a fetish, it is an object of desire, a souvenir, some fans who like to have music, I was for a long time, so I have my record label, but we can not stay in that. Today the album is delivered at the door of the show with the entrance, it is part of the added value that is offered to those who go to a concert, even if they will not listen.
IM: You commented that the record industry is not aware of the weight of the digital. In the report of the IFPI 2016 it was published that in Argentina 20% of the recorded music income came from the digital format, 21% from the physical and 58% from public communication. How do you analyze it?
IFPI reports are reported from reports from the local author's chamber, where majors have a strong presence, so I think the report is somewhat limited to this sector of the market . In the last three years, Argentina has been one of the countries with the highest user growth for CD Baby in Latin America, which is very promising at the business level for all. I think that little by little users are becoming aware of the tools that the digital and independent world can offer, with all the statistics and information available that for example, an artist signed with a major could not access. Knowing the behaviors and data of the users can serve us to put together a campaign in social networks ,
IM: CD Baby arrives in Argentina at a time when the IFPI has reported that Latin America is for the seventh consecutive year the region with the highest growth in music revenues, driven by the digital sector and the penetration of smartphones. Apart from this climate of digital growth, does it have to see some social and economic stability of the country with the fact that CD Baby has arrived in Argentina?
No, it is mainly due to the growth of the digital sector in the region that you comment on, which is very promising. I do not see it so closely related to the reality of the country. Streaming subscriptions are fairly inexpensive, about $ 2. What has declined a lot is the consumption of live music , which may have also influenced the growth of digital consumption.
IM: In the sector of digital streaming we talk about that there are three options: free streaming supported by advertising, premium subscriptions and video streaming. According to your knowledge of the Argentine market, which of these options is the one that has the most weight?
I understand that Spotify has been raging a little here, I do not know if it will be the same in Spain. The data we have, including the IFPI report is that for every dollar a YouTube musician receives, he gets 16 from Spotify . This is something that I think we all have to reconfigure. At the moment of entering CD Baby I have opened accounts in all the stores to see more or less how each one works and also for the moment of talking with the content manager of a store, to have clear the information of how, where and in What playlists. But I understand that Spotify is leading the streaming in Argentina.
IM: We recently published a brief interview that we did to Tweety González and asked him how he saw the situation of the quality of the streaming services and he said that the quality is getting better, the problem is educational consumer, how they come The new generations listening to music, who mostly do not know how to appreciate good quality.
Of course, it's the differences between consumers who are digital natives and the more adults like us who still have music on CDs and even vinyls. But there is also a difference in the desire to investigate more music, to know music, to go to the record store and buy one, that no longer exists. Now it is more about the recommendations of the algorithms than what one can cause a cover art for example . But at the industry level you can not stay in the past, you have to adapt quickly and reconfigure because in fact we already lived it, we had many years of debacle in the industry, and I think the independents have great possibilities. If you really understand what this moment is about and arming quick strategies to adapt ,
IM: In this sense I wanted to ask you, we have commented that in Argentina there were already a number of competitors such as Altafonte, The Orchard, Limbo Digital, Believe Digital, etc. Some with offices, some with no. In Spain the distribution sector is quite saturated and a new distribution company would not make much sense, Do you think that in Argentina there is a market yet to reach and settle? Especially for this reason you say that there is a lot of education at the digital level.
Yes, the market is huge here . Even we are not competing basically, we only bring a new proposal with CD Baby, directly addressed to the musician and the independent label. We do not compete with any distributor, we are simply trying to put a new arrival in an emerging emerging market . Emergent by everything new that is appearing day by day, which is a lot, because the country is giant and bands appear all over the country, and you have to be there to attend them, to educate them. Part of the philosophy that I was interested in CD Baby is this, being able to attend the independent musician, the independent label, each one can control their content, appropriate their statistics, learn to read them, learn to communicate with their fans .
The DIY platform CD Baby has is very interesting, that the musician can understand new ways to reach the public, today the link you would have with a journalist at the time of a release is comparable to the link you have with the content manager of a Digital store, but some of the older independents still do not understand this and see it as something that will come in the future, but in reality it is a reality that is already here . It can be reconfigured somehow, if even some stores may mutate or disappear in the future, be sold or YouTube take control of everything, we do not know. But today we have to do the digital work in parallel with what we did with the physicist, I would say more. In CD Baby we have a very specific need to generate knowledge, To generate that knowledge that can be given to the independent and the musician so that he can manage all his business units and have them at his fingertips all the time. We are not competing but we come to offer something a little more integral.