Mass media conglomerate Grupo Globo is exploring a sale of Som Livre, Brazil’s largest domestic record label.
Globo says the decision to try to sell the label doesn’t signal any concerns about the label’s performance in the world’s 10th-largest music market, but rather resulted from a strategic review of the assets in its portfolio.
“Som Livre is an extremely solid and profitable business,” Jorge Nóbrega, Globo CEO, says in a statement. “Music remains very important in Globo’s portfolio, but we believe it is a good time to get out of the traditional label business and focus on the D2C (direct to consumer) strategy.”
Founded in 1969 by music producer João Araújo, Som Livre initially focused on releasing soundtracks for Globo’s soap operas and continued to specialize in compilations. A decade ago, the label shifted its strategy to developing and managing artists and became the largest producer of music in Brazil, where local music represents almost 70% of total consumption.
Songs produced by Som Livre account for 20% of streams of the top 200 songs played on digital platforms in Brazil in 2020, a Globo spokesperson tells Billboard (based on streams on Deezer, Napster, Apple Music, Spotify and GooglePlay). The label trails only Sony Music and Universal Music Group in recorded music sales in the country, but it leads Warner Music Group, according to Valor Econômico, the Brazilian business journal.
Among the potential buyers of the label, according to Brazilian media reports, is Believe, the French digital distributor, which is testing the waters for a possible IPO. A spokeswoman for Believe did not respond to requests for comment from Billboard.
Brazil’s music market grew by 13% last year to revenues of $313.7 million, driven by a 19% jump in subscription audio streams. It was the fourth-fastest growing music market in the world, according to IFPI. Overall, more than 75% of Brazil’s revenues came from streaming in 2019.
Som Livre has grown for more than 10 years in a row, “at a faster speed than the market,” Marcelo Soares, CEO of Som Livre, says in a statement. “Having reached the position of the third-largest record label in Brazil with only Brazilian content fills us with pride,” he says. The label has an active roster of close to 80 artists, including Xuxa and Maria Gadú, and helped develop talent like Rita Lee and Daniela Mercury. Soares says Som Livre had developed six of the eight most-streamed Brazilian artists of the last decade ranked by Spotify, including sertanejo singer Gusttavo Lima and Wesley Safadão.
Rio de Janeiro-based Globo controls Brazil’s largest free-to-air television network, Rede Globo, along with radio stations, a film-production company, newspapers and internet sites. Company executives say music will continue to be relevant to Globo’s portfolio through the company’s subscription channels and through programs such as The Voice and Música Boa ao Vivo (“Good Music Live”). Globo also provides TV coverage for major festivals in Brazil such as Rock in Rio and Lollapalooza.
Globo has been undergoing an expensive digital transformation through investments in new technologies and business models. In November, the company announced a new organizational structure that would re-brand its various properties simply as “Globo.”
The pandemic has prevented Globo from being able to produce new soap operas, an important source of revenue for the company. Globo unveiled a new $50 million studio complex in Rio de Janeiro last year as part of plans to ramp up in-house drama productions and better compete against streamers such as Netflix.
