In 2013, Roni Maltz went to a concert by Aviões do Forró, a band of forró, a typical musical style from the Brazilian Northeast. The concert took place in a small but famous touristic city, called Ipojuca, on the coast of Pernambuco State. It was a Tuesday, and Maltz was impressed by the size of the crowd watching the show – over 30,000 –, and also by the band’s busy schedule for the following months.
It was his first glance at what later he and his partners, Rodrigo Amar and Allan Trope, would recognize as a local business with multinational potential: the musical platform Sua Música (“Your Music,” in English). The trio got so excited about the idea that they bought the platform. Now, they are taking their first steps to expand Sua Música far beyond Brazil‘s Northeast region. They want to take over Latin America.
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Sua Música was created in 2010, in João Pessoa, capital city of Paraíba State, by Éder Rocha Bezerra. An assiduous concertgoer, Éder created the platform to concentrate live recordings of concerts in a single virtual place. At the time, the bands themselves make the same videos available on their websites and Orkut. From that wobbly beginning, Sua Música became a regional power. Today, it has 8 million users, new business verticals exploring all the potential that goes beyond audio and video streaming, and ambitious plans for the coming years.
“We understood that there was a huge market for independent music in the [Brazilian] Northeast that was not being explored by the major labels,” says Maltz, CEO of Sua Música, in an interview with LABS. He doesn’t reveal how much he and his partners paid for the platform back in 2013, nor the current sales volume, but he guarantees that the business grows from 30% to 35% per year.
One platform, two fronts
At Sua Música, artists are not paid. And they not only don’t think this is bad as also many of them actually pay to stand out in the app (available Android and iOS).
Thus, Sua Música positions itself as an exhibition platform. “They [the artists] understand that they will not be paid, but that they will gain a lot of exposure,” says the executive.
At a time when the streaming industry is accused of underpaying artists, and it has to deal with ongoing protests, the relationship that Sua Música has managed to establish with its more than 15,000 verified artists is noteworthy. “We never had complaints; on the contrary,” says Maltz. “The artists call us, wanting to pay to advertise on the platform.”
These payments made by artists make up Sua Música’s revenue mix. The company, explains Maltz, is divided into two fronts: the streaming platform and the digital services business for artists.
On the platform, the company makes money with ads and with an ads-free premium plan, which costs BRL 3.90. Currently, of the 8 million users of Sua Música, 6,000 are premium subscribers.
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The digital services arm is divided into three businesses:
- Sua Música Digital, which distributes artists’ songs on third-party platforms (Spotify, Deezer, YouTube, etc.), collects royalties and transfers it to the artists, in addition to doing their digital marketing on these platforms. At the moment, around 150 artists use this service; the company’s goal is to reach 500–600 by the end of 2022.
- Sua Música Records, which does the so-called 360 management of the artists, that is, all from production, concert sales, to distribution and digital marketing. So far, 13 artists are use this service. Sua Música aims to end 2022 managing 100 artists.
- Sua Música Spaces, the company’s arm focused on recording and producing songs with the artists and that will soon have its own musical studio in the city of Fortaleza.
The revenue division between the company’s two business fronts is almost uniform — 60% comes from the platform and 40% from services to artists.
Maltz highlights the synergy of the two fronts. Digital services leverage raw gems discovered on the Sua Música platform. And they already have success stories that validate the strategy.
“Have you ever heard of João Gomes?” asks Maltz. Two months ago, João had 5,000 followers on Instagram, where he posted photos of his routine as an agricultural worker. “He was discovered in an online battle we did, in Sua Música’s Stories, and ended up signing with our company. We distributed his music on YouTube, Spotify, Sua Música… and he ‘exploded’”, says the executive.
In two months, João Gomes went from 5,000 to 4.2 million followers on Instagram and, according to Maltz, became the most prominent Brazilian artist in number of streams on Spotify and YouTube. “It’s an artist who didn’t exist two months ago. This proves our thesis that an artist, today, can reach the top [of the industry] in Brazil independently, without needing a major label.”
The success of João Gomes and other rocks stars, no wait, forró stars discovered by Sua Música, such as Tarcisio do Acordeon, show that the company maintains a friendly relationship with other digital platforms. Orkut had a decisive role in the foundation of Sua Música; today, the most popular social media are extensively used by Sua Música for various purposes. “It’s a channel [social networks] where we disseminate content, create entertainment content — not just music —, engage with the public, attract artists for our service company or even for the platform,” explains Maltz.
With streaming giants like Spotify and YouTube, the relationship is one of partnership and rivalry.
Beyond Brazil’s Northeast
Sua Música’s business model allowed the company to grow during the COVID-19 pandemic: 25% in 2020 and, so far, 45% in 2021. Maltz attributes the company’s good performance to its ability to reinvent itself. After the initial shock caused by the arrival of the coronavirus in the country, Sua Música resorted to live-streaming concerts and accelerated the development of its digital services business for artists.
On the other hand, the executive recognizes the negative impact that the necessary restrictions to fight the coronavirus had on the artists’ income. After all, their business model is to gain notoriety as a way of, later on, generating revenue through concerts.
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Sua Música is likely to announce an investment round in the next three months. To investors, the company’s execs sold the thesis of their complementary business fronts (streaming platform and digital services for artists). The next step is to replicate the regional success model of Sua Música in other regions of Brazil, diving into other music genres and, why not, abroad.
Despite its success in the Brazilian Northeast, the platform also has users in other regions of the country: São Paulo and Rio de Janeiro, the two greatest cities in the Brazilian Southeast, are the third and the fifth-largest audiences of Sua Música, respectively.
The company already owns the brand Tu Música, in Spanish, and intends to launch its international expansion by 2024, starting in some other Latin American country.
Translated by Fabiane Ziolla Menezes