Haven of Open Culture

Open Business in Latin America is emerging especially in informal cultural industries, taking place in the peripheries of various countries. These local peripheries are appropriating technological tools to create their own networks for the production, distribution and consumption of culture. These emerging peripheral networks are taking place in spite of any Intellectual Property incentives, and are based in effective open business models. As a matter of fact, copyright and IP protection are simply not a factor for the emergence of these new forms of cultural production.

The Brazilian government has undertaken at least four important actions towards promoting an innovative and balanced Intellectual Property regime. The first is the adoption of free software, both by the government, as well as by the private sector. At the government level, free software has been adopted by several Ministries and governmental bodies, at the Federal, State and City levels. Even army is adopting free software, as well as the main data processing entity at the government, SERPRO (the Federal Data Processing Service). The second initiative supported by the government is the Creative Commons project. The last two initiatives undertaken by the government are the struggle for obtaining access to medicines. And the fourth action is the so-called Development Agenda, proposed by Brazil and Argentina at the World Intellectual Property Organization, and envisaging the Intellectual Property be seeing as a means to promote development and access to knowledge.

All these initiatives imply a political risk to Brazil. As an example, when the Development Agenda was proposed at WIPO, the US Trade Representative declared at a business lunch in Sao Paul that he was clearly unfavorable of the initiative. An interesting fact is that the US Trade Representative Office is responsible for the publication of the so-called “Special 301 Report”, which grades every country in terms of how much Intellectual Property was enforced along the previous year. Brazil ended-up downgraded at the report published just after the Development Agenda proposal. The consequence of that was a series of unreasonable reactions inside the country. By way of example, publishing houses in Brazil started several abusive actions to enforce Intellectual Property preventing the overall copy of books and even threatening to sue professors. Additionally, legitimate academic projects were closed down under the allegation of IP infringement, such as cinema groups in the State of Espirito Santo.
In such an instable scenario regarding Intellectual Property, in which the emergence of open content models has to live up with abusive changes and enforcement of Intellectual Property, interesting situations take place. One of the most important is the failure of the cultural industry in Brazil (and in the developing countries as whole) to provide adequate channels for the dissemination and production of culture. The statistics about the traditional copyright-based cultural industry in Brazil are dramatic.

The numbers demonstrate that a very small number of artists have been able to be distributed by means of the traditional industry channel. >From January to August 2005, the four major labels, holding 85% of the market, released only 26 Brazilian artists CD’s. For a country with 180 million people, this number is tragic. At the same time, Hollywood movies occupy more than 87% of movie-theaters in Brazil. The paradox is that the Brazilian production of movies has been steadily growing. More than 400 movies are currently in production in the country. However, every year, only 20 Brazilian movies have the change to be seen in Brazilian movie theatres, many of them owned by the Hollywood studios themselves (a practice that is forbidden by competition law at the United States).

All the above indicates that the traditional 20th Century cultural industry is failing to provide the appropriate channels for Brazilian culture to emerge and be disseminated. As a result, creativity is moving to the global peripheries. Peripheries worldwide are appropriating technological tools to create their own networks for the production, distribution and consumption of culture. These emerging peripheral networks are taking place in spite of any Intellectual Property incentives. As a matter of fact, copyright and IP protection are simply not a factor for the emergence of these new forms of cultural production.

An example is the so-called “tecno-brega” music industry in Belém do Para, where a massive amount of CD´s by numerous artists are produced every year to be sold directly through the street vendors. In that city, a parallel music industry has been active for years. The “tecno-brega” parties attract every weekend thousands of people in the outskirts of Belém for the “sound system parties”. A couple hundred new records are produced and released every year by local artists, but both the production and distribution of these records take place outside the traditional music industry in Brazil.

The music is born “free”, in the sense that copyright protection is not part of the business model developed by the tecno-brega scene. The CD is considered as a mere advertising piece, in the sense that it works as vehicle for advertising the different sound system parties taking place every week. The whole production of tecno-brega CD´s is sold through an arrangement between the street vendors and the owners of independent recording studios. The CD´s are sold by the street vendors at an extremely affordable price, of approximately $1.50 dollar per copy. Artists do not make money out of CD sales. The price charged works exclusively as an incentive for the vendors to sell the CD´s, not for the artists to make music.

The artists make their money throughout very innovative business models connected with the sound system parties. By way of example, artists make money by recording their live presentations in the parties in “real-time” and selling them immediately after the concerts. Accordingly, the audience is able to go back home with a CD containing the concert that they have just attended. The tecno-brega dj´s usually acknowledge in their live presentations the presence of people from various neighborhoods, and this acknowledgement is of great value to the audience, leading thousands to buy copies of the recorded live presentation.

This practice to record “live” presentations for immediate selling obtained worldwide attention when the North-American rock band, “The Pixies” started doing the same thing during their 2004 world reunion tour. The press praised such practice as an innovative business model, for musicians in the digital era. Little they know that the same practice had been in place for at least 3 years in the tecno-brega scene in the city of Belém.

Other example includes the several artists in Brazil who produce and sell music and films through alternative selling points, at a very low price. These alternative selling points range from newsstands, parties, and street vendors in large or small cities. The distribution formats include traditional CD´s, MP3 CD´s and DVD’s. The sophistication is such that in the favelas (shantytowns) of Rio de Janeiro, one can find kiosks where you can actually “customize” your own CD, choosing in a computer screen the specific tracks you want to have in it. The content is mostly locally produced. In Rio, for instance, it consists in “baile funk”, a music style that blossoms for years predominantly through the street vendors market.

Just like the tecno-brega case, it is interesting to note that a similar service was announced a few months ago by the Starbucks chain in the United States, with great praise for its innovative character. Once again, in the favelas of Rio de Janeiro, such a service has been available for at least three years. Additionally, the Baile Funk has recently has become global, with artists such as MIA and Diplo, and DJ´s like Marlboro, playing in the most important music festivals in the world. The baile funk scene, just as the tecno-brega, and the music DVD scene, is built by street vendors. CD´s are produced, recorded, packed, distributed and sold in a manner where copyright is not a factor.
Other important open initiatives include the “Espaço Cubo” in the State of Mato Grosso in Brazil, a self-sustaining musical cooperative that self-finances the production and distribution of their own recordings. Also, the audiovisual market for musical DVD’s emerging in several Brazilian states – producers all over the country have found a way to produce and record live concerts by local bands, and sell them through alternative distribution networks.