Sounds of the underground

The scene was one that is replicated in the hills around the city every weekend: on a rainy night in July, some 2,500 paying customers - R$4 ($2) for men, R$2 ($1) for women - have occupied the cement basketball court in a cavernous concrete sports hall. At the far end a massive sound-system is stacked on a stage, pumping out the filthiest, most bass-heavy music one is ever likely to hear. Rudimentary coloured lights jump from the stage but leave much of the hall in darkness, coming to life only as they shine through the marijuana and tobacco smoke hanging in the air.

Girls and women of all ages step around the gathering puddles in their high heels, and dance in styles of such sexual licentiousness that they would surely fall foul of even the most liberal public decency statute. The men, dressed in rain jackets, baggy shorts and baseball caps, are less forthright, but clearly enjoying themselves.

Also in attendance are a clutch of representatives of the neighbourhood drug gang, standing in the centre of the gym floor, and sporting a wide array of large weapons (favelas are controlled by drug gangs, and for the most part are off-limits to the police). Some of them are dancing too, occasionally waving an AK47 assault rifle or pump-action shotgun in the air in time to the music.

The economics of the baile or carioca (Rio) funk scene are not easily researched. It is dangerous to pry too closely into the inner workings of the parties, which take place only at the pleasure of the drug lords. An undercover television reporter caught secretly filming a baile a couple of years ago was brutally attacked and killed with a replica samurai sword.

Lyrics that glorify violence between gang factions are illegal in Brazil, and fall under the category of prohibited music or proibidão, so any such recordings found at a street stall that identify the singer could lead to their arrest. The other staple subject of baile funk is sex, with lyrics far too extreme for radio airplay. Sanitised or "light" versions exist, but they can't compete with the appeal of the real thing.

Like Brazilian musical styles of the past, baile funk has attracted musical seekers from afar. DJs from the US and Europe have come to Rio to taste the music and mix it into their own, and favela funk nights are increasingly common in cities from New York to Berlin. In 2005 the British/Sri Lankan singer M.I.A., working with DJ Diplo, drew on baile grooves for her album Arular, to critical and popular acclaim.

But for the most part the major labels haven't latched on to the music. It is still too ghettoised even in Brazil to appeal to the small demographic that can afford a legitimate retail CD - costing around 13-18 US dollars - and too specialised to be profitable to a mass audience outside the country. The funk scene's MCs and DJs cannot make money from CD sales, so their only source of revenue is performance fees, which vary according to popularity.

But the music scene that exists outside the distribution systems administered and controlled by the major labels has proven to be very profitable to the artists that perform it. It is called tecno-brega, and primarily originates from the city of Belém in the northern state of Pará. Brega has no direct translation into English, but roughly means "cheesy" or "tacky". Tecno-brega is a major money-spinner for its star performers, who attract thousands of paying fans to lavish sound-system parties and stadium-sized concerts featuring synchronised dancers in elaborate sequined costumes.

The music itself is not especially radical - a local flavour of popular music given a techno twist - but the business model that underpins it certainly is. Performers have no expectation that normal retail sales of CDs will provide them with an income. Rather, the discs, of which four hundred might be released in a year, are promotional tools to attract crowds to the concerts, which in some cases can grow to 100,000 people in size. Moreover, to the extent that the scene's performers do sell CDs, they understand the need to make those discs attractive to buyers - a simple lesson that has never been adequately appreciated by the multinational labels.

For example, many brega artists record their live shows in real time then burn copies for sale at the exits, so that audience members can head home with a legitimate R$5 ($2) copy of the concert they just paid a similar amount to see. Performers and DJs also give "shout-outs" to various neighbourhoods represented in the crowd. Attendees take great pride in hearing their homes name-checked, and eagerly buy up copies of the show to capture that moment of acknowledgment.

The biggest brega band in Brazil is also, anecdotally at least, the biggest act in the country. Banda Calypso is said to have sold some six million CDs in Brazil, but make all their money from performances and some proportion of DVD sales. Hermano Vianna, an anthropologist and scholar of Brazilian music, tells a story about Calypso to illustrate their success: while planning a feature on the band for his Globo TV music show, Vianna offered to negotiate the use of a Globo-owned aeroplane to get the band to and from a show in a remote area of the country. Calypso's reply? No need, we have our own plane.

Stepping on toes

After years of condemnation for failing to prosecute copyright infringers, the Brazilian government has recently taken up the fight. In 2004 a National Anti-Piracy Council was formed with officials from the Justice and Economic Ministries, the Federal Police, and private industry. In late 2005 and early 2006, major crackdowns on CD stall operators and markets in São Paulo and Rio took place, with tangible successes according to the Brazilian record industry trade body.

But according to Ronaldo Lemos, the director of the Centre for Law & Technology at Fundação Getulio Vargas Law School in Rio, these raids not only netted pirated products of "northern" pop stars but also the recordings of tecno-brega and other independent Brazilian artists who want their work copied and disseminated, because it is the only way they have to build a paying audience. To creative workers such as these, copyright is not a pertinent issue. On the contrary, the heavy enforcement emphasis placed on it is damaging to their distribution systems and successful business models.

CDs in retail stores in Brazil sell for about the same price as in the US, but the average Brazilian would need an income twelve times the national average to have purchasing parity with an American buyer. While the major labels often claim to champion Brazilian artists and their interests, this is rarely the case. Lemos points out that with the consolidation going on among the major multinationals, there will soon be hardly any Brazilian recording artists to pirate anyway - he estimates that between them the four majors will release around forty CDs by Brazilian acts this year. In a country of 180 million people, a significant number of whom experience and participate in music on a daily basis, this is a ridiculously small number.

The heads of IP-holding multinationals and the USTR see "piracy" in Brazil as a threat to the development of creative economies. But there is a serious argument to be made that ever-stronger crackdowns on what northern stakeholders deem harmful to their businesses are just as damaging to the emergence of new creative economies that have little to no reliance on legacy copyright structures.

Still, having witnessed it first hand, it is tempting to conclude that nothing the National Anti-Piracy Council do is going to make an iota of difference to the millions of Brazilians who enjoy, and pay for, music grown in their own communities.