By Ana Prieto
BUENOS AIRES: When the music industry reacted to the lightning-fast pace of digitization, it was already late. In fact, of all the creative industries, music was, by far, the first to confront the dramatic changes brought about by information and communication technologies. The fastest and most visible consequence was the drop in physical music sales. The retail music chain Tower Records, which had landed in Argentina in 1997, filed for bankruptcy seven years later. And Argentina’s most important music retail store, Musimundo — one that had sold vinyl records, cassettes and CDs to music lovers since 1982—changed owners and started to specialize in home appliances and entertainment.
Can the publishing industry learn anything from the experience of the music industry? This question was posed by Fundación El Libro at the Professional Conference, held in the last International Book Fair of Buenos Aires, and most recently at September’s International Music Fair of Buenos Aires (BAFIM), where a meeting of representatives from both sectors sought to strengthen ties between two rapidly changing industries.
Among the guests was Diego Zapico, founder and director of the independent label Acqua Records, with over ten successful years in the music market. The key of Acqua’s business model, he says, is based on a “small and agile structure” which does not depend on a single source of income. Acqua’s CDs can be found in several of the record stores still left in the city of Buenos Aires, but as Zapico points out, “sales of albums have moved largely to live shows, especially in smaller cities of the country.” Acqua is also making digital content increasingly available for download and online streaming. “The latter has several free versions and is a way of reaching the public that may be important in the coming years,” he says.
While the Latin American publishing market remains deeply segmented and governed largely by Spanish publishing companies, a new future is coming and faster than we might think.
Andrés May is the director of BAFIM and coordinator of Opción Música, the area of the Creative Industries Division of the Government of the City of Buenos Aires dedicated to supporting the local music industry. He is well aware of two things: that CDs are just one small piece of the industry, and that independent labels have been able to better adapt to the new scenarios. “When the traditional business model of the recording industry was deep into the crisis, labels evolved in other sectors, such as live shows and management,” he says. “The 360 concept became fashionable among multinational music companies. However, independent labels were already doing that work, even before the changes in the business: an artist who signed a contract with an indie, found out that the label did not only support him with the album release, but organized gigs and tours, worked along with with the manager, etc.” Some successful Argentine indie labels include S-Music, Leader Music, PopArt, Icarus Music y Estamos Felices.
Independent publishers also tend to distinguish their work from commercial publishers through a closer contact with the writers. However, it is the latter who can afford a massive distribution, as well as financing authors’ visits to different cities and countries, in a procedure that is certainly inspired by music star tours.
Physical vs. Digital in Latin American Publishing
While the timing of the publishing sector has proven to be different, and sales of printed books remain the strongest segment of the business, the consequences of the emergence of the Internet and the digitization of music ultimately serve as a real wake up call. One of the challenges facing the local publishing industry is, in fact, the transition to the digital market, which is already showing significant progress. In 2007, only 3% of the books were published in that digital formats in Argentina. In 2012, the figure rose to 17.19%. That is, the production increased sixfold in five years. This reality, which still causes confusion to most local publishers and booksellers, has swept across the field of music. Diego Zapico, however, believes that both pathways—digital and physical—are complementary and “don’t necessarily overlap; they are variants of cultural consumption that can coexist perfectly today.”
In the publishing world, the Latin American scene is marked, in part, by the persistence of the readers in their preference for paper books, and also by limitations in the access to technologies. “Today the sales of ebooks in Spanish are minimal, because the existence of reading devices is still scarce. However, as long as there are large computer corporations who want to sell these devices — the content is secondary — they will,” says Guillermo Schavelzon, a leading Spanish-language literary agent.
The e-book phenomenon implies, moreover, that an author can upload his or her material to major international platforms, such as Amazon, Barnes & Noble, iTunes — or local platforms, such as the fast-growing BajaLibros — and receive up to 70% of royalties. “This is what is changing the publishing business at high speed, and publishers who do not adapt quickly, flexibly and widely to these models, will struggle to retain their authors” says Schavelzon.
The issue of copyrights is not been quite resolved in the music industry either. “Just like a bestselling author, an artist who sells tens of thousands of albums will say that those sales are an important part of his income. The musician who is only now beginning will prioritize the spreading of his music. At first no one paid anything for downloading music. Then iTunes came and generated millions in income for international companies, but artists still received very little for the sale of each track. Until recently, the ‘listening” of music on YouTube or other streaming services paid nothing to the content creator. Today, although it is still very low, the artist gets something. And the business model keeps changing.”
What is unquestionable is that today’s levels of consumption and access to music content are the highest levels ever in history. And yet, for the publishing industry it remains difficult to predict the future of books in a digitized world. In any case, as Diego Zapico says, the important thing has never been the format: “This country has a tradition of creating excellent music content, and that, which is the essence of this industry, thankfully remains intact.” Any Argentine publisher will agree that the country’s tradition of generating great literary content also remains intact.
Are there more lessons to learn from the music business for publishing? Or are the industries too divergent and digital marketing, publishing and promotion now too advanced, for them to learn from each other? Let us know what you think in the comments.