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New business models for a changing environmentBrazil – mobile today,Brazil online tomorrowBrazil exemplifies howinnovative business modelscan generate significantconsumer demand. TheBrazilian digital musicmarket, the largest in Latin America, nearlydoubled in value in 2008 and now accountsfor more than 10 per cent of recorded musicsales in the country, with nearly 80 per centof revenue coming from mobile channels.Brazilians spend more time on the internetthan any other nation and social networkssuch as YouTube, MySpace and Orkut havealready attracted big audiences. Yet the onlinemarket in Brazil is in its infancy. In the mobilesector, operators have launched 3G networksoffering fast download speeds, but there isstill enormous untapped potential for growth.Brazil’s mobile music business has grownrapidly, with the number of mobile usersup 60 per cent in the past three years.Leading operators such as Vivo, Tim andClaro have around 30 million subscriberseach and are increasingly looking todifferentiate their services. Handsets preloadedwith music are a growing business,with operators using them to aggressivelypromote their products and services.Music companies have been active in thepre-loaded mobile business. In a partnershipbetween Warner Music International andSony Ericsson, Madonna’s album Hard Candywas pre-loaded on Sony Ericsson phones.Two packages were made available withthe phone - one with five tracks from thealbum and another with the full album. Bothfeatured extra content such as wallpapers andringtones and were launched in the run-upto Madonna’s tour of Latin America – oneof the fastest selling tours of all time in theregion. “The campaign drove substantialre-orders following strong consumerdemand,” says Alfonso Pérez-Soto, headof business development and strategicpartnerships, Warner Music Latin America.Universal Music has carried out similarcampaigns with artists such as Sandy & Juniorand Ivete Sangalo. Universal partnered withMotorola to offer a pre-loaded song from localrock band NX Zero on Motorola’s phonesprior to the release of the band’s album. “It’sa good example of a developing act workingwith digital,” says John Echevarria, chiefoperating officer, Universal Latin America: “Thecoordination of traditional radio and digital prereleasepromotion led to the sale of a millionhandsets containing tracks from NX Zero.”Sony Music Entertainment and Sony-Ericsson, reached a similar deal with musicby established local act Jota Quest. In thefirst wave of the campaign at the end of2007, some 800,000 Sony Ericsson Walkmanhandsets were sold with the album Ate OndeVai plus video tracks, behind-the-scenesfootage and wallpapers. Many more weresold with the band’s new album La Plata.The package included behind-the-scenesfootage and an exclusive song for download.In total, more than one million handsetswere sold pre-loaded with Jota Quest’smusic. Sony Music is expanding its mobiledeals with artists. International deals includepartnerships with Justin Timberlake and P!nk.17