Portugal

Portugal's music industry has reasons to be cheerful. By recognising the potential of local artists like Paulo Gonzo, Delfins and Excesso, it has driven sales up by 17% - although much of this impetus came from the increased uptake of higher-priced CDs while overall volume remained static. With local genre pimba accounting for an estimated extra 15% of sales there is much to celebrate at Expo '98. But there is still room for improvement: radio is far too safe, the publishing sector is catching up and heavy retail discounting is strangling margins. Still none of these problems can halt the wave of optimism sweeping this tiny but buoyant market, writes Yinka Adegoke

Ask any international music industry executive to list the conditions necessary to ensure the growth of a local record industry and chances are that a stable economy and a growing number of potential consumers will figure high on the list. No wonder then, that Portuguese executives are smiling at the moment; at a time when the industry is already celebrating as part of the Expo '98 exhibition, the local economy has regained its momentum, and the ranks of the record-buying middle classes are continuing to grow, helping the value of recorded music sales to grow by close to 20% in 1997.

Figures from AFP, the local IFPI affiliate, show that in 1997 the value of the market grew by an impressive 17%, to Es28.4bn ($162.5m). This follows growth of 25% in 1996, although it should be noted that total unit growth stayed static between 1996 and 1997. At the same time Portuguese consumers appear to be going native; in the past five years the value of domestic repertoire sales has more than doubled, with a 17.9% rise last year, taking local music's share of the market to 21.5%, according to AFP figures.

The market is being pushed by the continuing steady increase in CD hardware penetration, now estimated to be around 40% of households, having grown by 5% each year since 1993. This perhaps explains why, despite the huge growth in the value of sales, actual volume growth has been just 0.3%, with most of this coming from the sales of higher-priced CDs. Meanwhile, piracy is negligible - equivalent to around 5%...