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As global as the internet might be, it’s not very international. As part of my series of case studies of the online music world, I thought a visit to the land of Tango might be in order.

Argentina

I was recently talking online with Federico Novick, proprietor of record label / production company Labil Musica.

Federico had just finished reading the 20 Things e-book, and was wondering aloud what it must be like to be in an online music environment that includes all the things we assume it includes for everyone.

But without trucking out that tired old ‘Digital Divide’ thing, there’s still disparity between different national environments when it comes to commerce, politics, technology — and music.

Tell me about popular music in Argentina. What are people listening to?

Argentineans listen mostly to international pop hits, latin pop or “soft” rock acts, local rock, “tropical” music (a lot of sub-genres exist under this umbrella, from cumbia superbands to more hip-hop influenced music), folklore and tango.

Commercial radio has been dominated by a mix of Latin and Anglo-pop for more than a decade, with some Argentinean rock hits here and there. In the eighties, almost all rock music in Spanish was made here. In a decade, we lost that crown to the Mexicans.

What size market are we talking about? How many people live there?

In 2001 there were 37 million people living here.

The music market is big, and the record market used to be: an example could be the Rolling Stones playing five 60.000 capacity stadiums. In spite of the decline in record sales after the late 90s crisis and devaluation, CD sales went up after the 2002 devaluation.

In May 2007 CAPIF (Argentine Chamber of Phonogram and Videogram Producers) says that there were 1.264.377 units sold. But in 1998 (whole year) the number was 23.379.400.

Are independent music retailers common? How are they doing?

If you mean non-chain music stores, there are plenty, but they offer almost the same product than the big ones.

As for independent (or indie) music retailers, there are some in the big cities, mostly here in Buenos Aires and they cater to buyers who still want the artifact. There are imported cd and dvds, small and mid local indie label cds, and some other merch: the niche indie market itself still breathes there.

But there’s a new generation of buyers, who don’t care about discs and will never care, who is out of there. And they don’t buy online music at all. That’s where the problem starts.

We think of online music stores as being international. How popular are things like the iTunes Music Store in Argentina?

iTunes doesn’t operate in Argentina. They are not “international” at all.

There’s a couple of online music stores, but the volume they sell is quite low — almost nothing. People simply don’t buy online, but you have to understand that online mail-order CD sales (not digital download) never took off in this place because the mail is just not reliable.

As Gustavo from Ultrapop (the biggest indie music distributor in Argentina) said to me, we need four or five years to establish a sort-of iTunes culture.

So, ahead is a void: CD buyers are the same, new ones download and burn music or buy pirate, and the record industry transforms at 300 miles per hour all around the world — while we don’t know what’s going to happen here.

It’s interesting, it’s bizarre, and hard to follow.

So… how much does the broadband cost, and what do you get for your money?

There are several plans, but you can get a decent broadband connection for around 20 to 40 USD per month, depending on speed and service. 2.5 megs costs $40, which is a lot of money.

Do ringtones and mobile music feature much?

The ringtone market’s growing, but the mp3 songs are not that popular. Phones with multimedia capabilities are starting to become popular and cheaper models are available. Hit songs or popular tv shows music are the most downloaded, in the monophonic or polyphonic format.

Is there much of a CD Piracy problem there?

There is a big problem. People don’t seem to understand that pirated CD sales is what hurts the industry, not downloads.

It’s very clear: in 2005 pirated cds were 55% and legal 45% (CAPIF figures) of the whole market.

How can an independent record label like yours make money in that sort of environment?

Since CD sales in the indie music arena are very small (there are many labels, and 2000 copies is considered almost a gold record), I developed a different strategy.

I started last year with two compilations co-produced with two different brands — clothes and a hotel — and we sell these CDs to independent stores and promote those brands while offering very good local music.

We produce music for the advertising industry as well, and my ambition here is for one field to help develop the other. A song from a new band could end in a TV spot, a tourist can pick up a CD at a hotel and discover that there’s a great vocal/electronic act he or she didn’t know about.

Publishing is the only “arm” the majors are not going to let go, and for me it should be the same among the indies.

Live music is another very profitable way to go, maybe the most important one.

The cycle, in a country where there is no online music sales, could be: Myspace – Band’s Website – Free Song Download – Live Show – “Premium” or “Hard to find” CD – Additional merchandise.

Other than CD piracy, what’s the biggest challenge facing the music scene in Argentina?

The industry has lost a decade: we didn’t develop major international acts, exported the great music we do produce, or promote new and fresh sounds across the country.

But there are many people who are trying to revert that — indie labels who work hard and excellent artists. In the next few years we’ll see if this new online world/death of the old record industry environment will help our music.

What are your opportunities for export?

There are many. Tango, different Hard and Heavy Rock genres, World Music, Jazz are doing very well. Indie Rock or Pop is harder but doable if you travel, get the right connections or both!

Digital sales outside Argentina are starting: you can find some local music online, for sale, but you can’t buy it here. Strange!!

Do you think the online environment is changing in Argentina? In what way?

The music industry will have to “enter” the online world for good, but it won’t happen as soon as we want.

You need to know that broadband connections are growing but most of the country has either no permanent internet access, or no access at all.

That said, there’s a large p2p culture that has grown over the years: even if you want to buy music, you can’t because the majors won’t put something out unless it’s a big hit.

Indies try their best, and the music scene’s quite interesting. We have a really rich history and great artists.

Music always finds the ears that want to listen, no matter how.

What other ways are Argentinians making money from music?

Live shows, mostly, but you need to let people know about what you are doing and media conglomerates are not saying “welcome” to electronic / indie / world / whatever different music. Established acts do sell merchandise, which is a market that is slowly becoming interesting.

What would you say to independent labels, distributors or artists in say, the US or UK? Is there business to be done in Argentina?

Yes. You can come and play, there are great venues and a wonderful audience.

Our recorded music needs new channels to reach the right ears around the world, so we need aggregators and record distribution. The electronic scene is very big as well. Companies that need fresh content can find it here: original artists who experiment, great composers and players who work hard, bands that rock.

Where would you start?

I would check some good sites and browse around: global-art.com, ultrapop.com.ar, rock.com.ar, and indicevirgen.com for indie music.

You can drop me a line as well: info@labilmusica.com

Finally, what’s the best thing about being in the Argentinian music business right now?

The future. Nobody knows where this is going, but we feel it’s going to change big time.

I love to imagine models, dream about formats: anything could happen in this bizarre and transitional time.

Kids downloading from kiosks? Artists signing contracts to record companies where they share live music revenues? Majors with 10 employees that deal only with publishing issues? Paid private webcasts? Creative Commons discographies?

Possible.

I am trying to make it work with a new idea, trying to mix two different worlds that were cousins: advertising and music — and make them live in an indie platform.

Also… we’re working on a pop girl group.