Sony Music Entertainment agreed to acquire Som Livre, Brazil’s largest independent label, for about $255 million, tightening its grip as the leader in recorded music sales in Latin America’s largest market.
The announcement on Thursday (April 1) — made jointly by Sony, Som Livre, The Orchard and Som Livre owners Grupo Globo, Latin America’s largest media and entertainment conglomerate — puts to rest months of speculation about who would walk away with one of Brazil’s largest and most valuable music catalogs.
Sony agreed to pay 1.44 billion Brazilian reais (about $255 million), according to a filing with the Securities and Exchange Commission. Brazilian regulators still must approve the sale.
Som Livre will continue to function independently, they said, and will still sign, develop and promote its own roster of artists as well as provide services to Brazil’s musical community. Marcelo Soares will stay on as CEO of Som Livre, which he has run since 2007.
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.
Today, the label is home to more than 80 artists, including massive sertanejo act Jorge & Mateus, forró star Wesley Safadão and Latin Grammy-nominated singer-songwriter Maria Gadú. Som Livre artists had five out of the top 10 songs in Brazil in 2020, according to the IFPI 2021 Global Music Report. They included Henrique and Juliano’s “Liberdade Provisória,” the No. 1 streaming track in Brazil in 2020.
With the acquisition, Sony becomes an even more powerful player in the world’s 10th largest music market, where the major label is already the market leader in music sales, followed by Universal Music Group and Som Livre, according to Valor Econômico, the Brazilian business journal.
Long distributed by The Orchard, Som Livre will now also benefit from Sony’s additional global distribution resources.
While Sony, Universal and Warner Music have always mined a diverse roster and catalog of Brazilian music that includes major international artists (one of Sony’s crown jewels, for example, is crooner Roberto Carlos), Som Livre has long focused on local genres like sertanejo, pagoda, funk and MPB.
The Brazilian label has grown for more than 10 years in a row, “at a faster speed than the market,” Marcelo Soares, CEO of Som Livre, said in November when the label’s sale was announced.
Som Livre has benefited from the powerful promotion of its parent company, Rio de Janeiro-based Grupo Globo, which has said it was selling the label as part of an organizational restructuring. Now, Som Livre will benefit from Sony’s marketing and distribution muscle worldwide, an increasingly important tool in a world of global streaming where consumption of Latin music, including music in Portuguese, has accelerated beyond Latin America.
“Globo’s support was fundamental for Som Livre’s growth, particularly in the past decade,” Soares says. “Now, looking to the future, it’s very exciting to know we have Sony Music with us.”
Brazil, which formerly suffered from rampant piracy of physical media like CDs and cassettes, was the fastest-growing music market in Latin America in 2020, helping fuel it to six straight years as the world’s fastest-growing region.
Amid the tumult of the COVID-19 pandemic, which has hit Brazil harder than most — the country has suffered more than 317,000 deaths from the virus — Brazil’s recorded music revenues grew by 24% ($60.4 million) to $306.4 million in 2020. Although rampant devaluation saw its placement in the global rankings dip from No. 10 to No. 11, on a total physical and digital basis it ranked 10th globally, with a 36.1% increase to $260 million in those formats. While physical revenues fell to below ½ percent of Brazil’s total, streaming grew by 84% to $256.6 million, according to IFPI.