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The Importance of the Latin Music Entertainment Market (part 3)

December 3, 2013

By Peggy Dold

The Importance of the Music and Entertainment Latin Markets PART 3
{Why it is crucial to connect the dots between the consumer, music discovery, music consumption, and copyright monetization.}


Continued from Parts 1 and 2, this post provides a glimpse into the global Latin Markets outside the United States.

“Latin America last year was the fastest growing region for music sales, broadband penetration is increasing, and it has become the #2 cellphone market globally.”  - Axel Dauchez, CEO, Deezer

Some key International Data relevant to the exploitation of music today:

INTERNET LANGUAGE RANKING:

•    Spanish is the 3rd most-used language on the Internet
•    Portuguese is the 5th most-used language on the Internet
•    Spanish is the 2nd most-used language on Twitter

MEDIA and ENTERTAINMENT CONSUMPTION:

•    According to a new report from Pricewaterhouse Coopers, Latin America is expected to become the fastest-growing region in spending for Media and Entertainment over the next five years, with 10.6% annual spending growth.

•    Among the most popular products with online shoppers in the LatAm region are:

     o    Computer electronics (#2)
     o    Music, movies or videos (#3)
     o    Entertainment tickets (#6)

•    Online Video Consumption has spiked significantly in Latin America.

•    Counting only the top Spanish-language International markets (ex-U.S.) for music sales historically (Argentina, Chile, Colombia, Mexico, Venezuela and Spain), Pro Music lists 61 different music services from which consumers can legally purchase music online.

•    In non-Spanish-language Latin America, Brazil alone has 18 different legal music services.

As one can see, while the old paradigm of monetizing music and entertainment has seen extreme degeneration via piracy, economics, currency factors, etc., technology and connection are ushering in a new way to discover and consume new music.

WHERE DO WE REACH MUSIC and ENTERTAINMENT INTERNET USERS in the LATIN MARKETS?


•    97.5%    Portals
•    96.3%    Search
•    96.7%    Entertainment
•    96.4%    Social Media
•    86.3%    News
•    85.3%    Community

SOCIAL MEDIA PENETRATION in the LATIN MARKETS ex-United States:

Mindful that Social Media is a top communication tool and a way in which music is discovered and shared, please note:

•    Latin America, with 95% of its Internet users on social media, spends 56% more time on social networking sites than the worldwide average

•    28% of total time spent online in LatAm is spent on social media sites

•    5 of the top 10 most highly engaged social networking markets worldwide are located in a Latin market:

o    #1:    Argentina
o    #2:    Brazil
o    #8:    Peru
o    #9:    Chile
o    #10:    Mexico

{Note:  this data excludes visitation from public computers or access from mobile phones.}

•    50% of the growth in Facebook users in 2011 was in Latin America, with more than 168mm users around the region

•    65.9% of Internet users in Spain will use social media by 2014

•    Facebook’s Spanish users alone account for just over 85% of all social networkers and half of all Internet users in Spain

•    1.5% of Google+ users are from Spain

MOBILE STATS in LATIN AMERICA and SPAIN:

•    In Latin America, mobile penetration is at 105% and expected to reach 130% by 2015.

•    Growth in mobile broadband subscribers 2010-2012 in the following key markets shows:
     o    Argentina:  194%
     o    Brazil:  421%
     o    Chile:  105%
     o    Colombia:  69%
     o    Mexico:  107%

•    Mobile/Smartphone Penetration in Major LatAm Markets shows:
     o    Argentina:  142% / 20%
     o    Brazil:  124% / 14%
     o    Chile:  129% / 30%
     o    Colombia:  100% / 7%
     o    Costa Rica:  101% / 10%
     o    Mexico:  89% / 20%
     o    Peru:  98% / 11%

•    64.7% of the total Spanish mobile audience are smartphone owners

•    66.7% of Spanish households used broadband connections in 2012; 26.9% were accessed via mobile broadband connections through a handheld device


HIGHLIGHTS OF KEY LATIN MUSIC MARKETS:

Argentina
•    Ranks 1st WORLDWIDE in desktop social networking engagement
•    Ranked #3 of 2012 Internet audience in LatAm with an audience of 28MM (66% of the population)
•    Ranks #1 in LatAm in online video consumption (96%)
•    11 legal music services
•    Digital music share (streaming) of 12%

Brazil
•    Ranks 2nd WORLDWIDE in desktop social networking engagement
•    Top 10 nation by volume of broadband subscribers
•    #1 Internet market in LatAm, with a 2012 audience of 85MM
•    Digital music share for streaming is 27%, same as Italy’s, the Netherlands’, and Spain’s, and better than France’s
•    Pro Music lists 18 different legal music services 
•    Total recorded-music market grew by 11.2% in 2012
•    Digital sales took off in 2012, following launch of iTunes in late 2011
•    Performance rights income increase of 29.6% in 2012, the highest rate in the past 8 years
•    Ringback tone sales grew in 2012
•    116 mobile phones per 100 people
•    3rd deepest reach (84%) in online video consumption

Chile
•    2nd deepest reach (92%) in LatAm of online video consumption
•     58% Internet penetration
•    Digital music share via streaming is 23%, the same as France’s and higher than Finland’s (22%)
•    11 legal music services

Colombia
•    In 2012 Colombia ranked #4 of Internet audience in LatAm with 25MM users, 59.5% of the total population.
•    Digital music share for streaming ranks at 30%, just slightly below international average and just under Switzerland’s (32%) and the Philippines’ (31%)
•    9 legal music services

Ecuador and Paraguay
•    Both of these countries who have had past physical piracy issues, have 54% digital music growth

Mexico
•    In 2012 ranked #2 of Internet audience in LatAm with over 40,600,000 users
•    Digital music share (streaming) beyond the International average ranking of 35%.  Mexico’s digital music share falls just behind the UK’s (at 39%) and New Zealand’s (at 36%)
•    17 legal music services
•    4th deepest reach in LatAm (at 81%) of online video consumption

Peru
•    In 2012 ranked #6 of Internet audience in LatAm with almost 10MM users, with 36.2% Internet penetration.
•    Peruvians spend an average of 26.5 hours/month online, higher than the global average of 24.5 hours per month.
•    97% of Internet users visited an entertainment site in January 2012.
•    Digital music share (streaming) is at 19%, the same as Germany’s and ahead of Belgium’s (18%) and Japan’s (17%).
•    YouTube reach:  73%
•    Mobile penetration:  110%

Venezuela
•    In 2012 ranked #5 of Internet audience in LatAm with almost 11MM users
•    Has an under-developed (delete Has an, cap under-developed) digital music market (streaming) with 6%
•    5 Legal music services

Spain
•    63.1% (representing almost 25MM) of the population were Internet users March 2013
•    62.8% use social networks
•    8 in 10 of the top selling albums of 2012 were by local artists.
•    Digital music share for streaming is 27% of the International average, the same as Brazil’s, Hong Kong’s, and the Netherlands’, but ahead of France’s (23%) and Finland’s (21%)
•    29 legal music services

Clearly, potential Latin Music consumers are some of the most active communicators, networkers, and users of new technologies and online services IN THE WORLD.  Their adoption of, and the markets’ exponential growth in, devices and online engagement, provide a never-before-seen opportunity through which to introduce, share, and directly market new music and entertainment to these active, potential consumers. 

Furthermore, these music and entertainment fans live in some of the most explosive growth areas on the planet for mobile, providing a unique and historical opportunity for the music industry to market direct-to-consumer worldwide.


Founder and CEO of Navigation Partners LLC, Peggy Dold has in-depth experience in multi-cultural marketing, global expertise in both the English- and Spanish-language entertainment markets, and in working with International media, licensing, and strategic partners worldwide. Current clients represent the sectors of entertainment technology, entertainment superstars, and independent recording artists.  Projects include content development for multi-media distribution as well as business development for new technologies and Talent (for the U.S. General Market, the U.S. Latin Market, and for selected International markets.)

Ms. Dold is also co-Founder and co-CEO of April Sound Entertainment Group, a newly-formed Texas-based company focused on Artist Development, Artist Management, Project Funding, and Music Publishing.

Until Universal Music’s acquisition of the Univision Music Group (May 2008), Ms. Dold was Vice President, International, for the Univision Music Group, at the time, the largest Spanish language music company in the world.

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Contact information:  www.navigationpartnersllc.com; peggy@navigationpartnersllc.com.

{Sources:  comScore; Pricewaterhouse Coopers; Socialbakers; Futuro Digital,The Next Web; Pro Music; Music Business Research; Internet WorldStars; Subsecretaria de Telecomunicaciones, Asociacion Mexicana del Internet; US Media Consulting; Latin Link; IFPI Digital Music Report 2013; Statista, The Statistics Portal; Huawei; Convergencia Research; COFETEL; Ministerio de Transportes y Telecomunicaciones; Nokia; UnidadReguladora de los Servicios de Comunicacion; America Economia; Visa E-Commerce Study, Latin America, 2012; Camara Argentina de ComercioElectronico; CamaraColombiana de ComercioElectronico; GSMA; ComisionNacional de Comunicaciones de Argentina; Anatel;  Subsecretaria de Telecomunicaciones, Ministerio de Tecnologias de la Informacion y lasComunicaciones;  Ministerio de Ambiente, Energia y Telecomunicaciones; Superintendencia de Telecomunicaciones; Union Internacional de Telecomunicaciones, Everis; Oficina de Desarorollo de lasTelecomunicaciones de la UIT; El Ministerio de Transportes y Comunicaciones; InstitutoNacional de Estadisticas; ComisionNacional de Telecomunicaciones; Vision Mobile; Google; 3D Chile; LG Mobile Colombia; IDC; Futuro Labs; New Media Trend Watch; eMarketer; InstitutoNacional de Estadistica; Nielsen}

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