Digital-Music-Report-2014

Rapid digital growthin Latin AmericaMarkets in Latin America are alreadyconfirming this potential, with digitalrevenues growing 124 per cent over thelast three years, compared to a globalaverage of 28 per cent. To build on thisgrowth and unlock value across the massmarket is requiring new ways of thinking.Key strategies include collaboration withmobile operators and ISPs, bundled musicpackages and pre-paid music subscriptionon devices. In Latin America a numberof new partnerships were launched orextended in 2013 as digital revenuesgrew by 28.1 per cent.Figure 11: Digital growth in LatinAmerica, 2013, Selected CountriesCountry% growthPeru +149%colombia +85%venezuela +85%Source: IFPISpotify announced a partnership inMexico with Telefonica which bundlestheir music service with phone and dataservices. Deezer partnered with ISP Tigoto cover Central America and the Andeanregion and Napster partnered with ISPTerra to bring the Rhapsody-owned service124% 28%digital growth in latinamerica 2010–2013to Latin America for the first time. USservice Muve offers daily or weekly prepaidmobile music subscriptions startingfrom 50 cents a day and launched in Brazilin cooperation with TIM, the country’ssecond largest ISP. Alejandro Duque, vicepresident, business development anddigital, Latin America at Universal MusicGroup, says: “It’s important to rememberthat credit card penetration is still notvery high in this region so when a serviceonly allows credit card billing they’recatering for a small percentage of thepopulation. That is why doing deals withcarriers, or with any company that is goingto enable mass billing, is absolutely thekey to success.”Piracy remains a huge problem in theregion. Luis San Martin, director generalof Multimusic, Mexico’s leading musiccontent broker for independent artists,says: “We’re fighting piracy on the streets,our robots are searching the internet andwe’re campaigning to get the governmentto deal with the issue. Before, when wedidn’t take action, people thought that itwas OK to break the law. Now we’re anindustry that is taking responsibility forits content.”average global digitalgrowth 2010–2013Local services thrivein AsiaRecord companies are engaging activelyin markets across Asia. In the lasttwo years, the region’s larger marketsoutside Japan have seen the rollout ofall the major download, subscriptionand streaming services, combined withincreased competition from local servicessuch as Taiwan-based KKBOX. Servicessuch as Deezer, iTunes and Spotify areseeing healthy growth in sales amonga largely higher income, credit cardowningdemographic, complementingad-supported services that arefree-to-consumer.In China, licensing agreements are inplace with eight major digital platforms,part of a push towards a paid-for onlinemodel (see China case study, page 36).In India, already Asia’s second largestmusic market after Japan, local streamingservices Gaana and Saavn, which targetdomestic and international higher-incomeIndian customers, are growing fast.Sandy Monteiro, president, South-East Asia for Universal Music Group,sees enormous growth potential in Asiamarkets. “Last year was a milestone year,Anitta photo by Washington Possato Armin Van Buuren photo by Chris Davison22