Latin American Music Music Industry

The music industry is undergoing a global technological revolution which has been induced by the introduction of Peer to Peer (P2P) file sharing services, and the proliferation of recordable CD equipment which his now within the financial reach of the average consumer. Any one of these three influences alone could have been absorbed by the recording industry. The presence of a P2P service which was limited only to sharing files between computers would have been convenient and fun. If consumers could only put personal music tracks on portable music devices, the convenience would have expanded the reach of the individual's music collection, much the same way that personal cassette recorders did in the 1970's. Although the music industry was worried about personal cassette recording abilities of the past decades, the inherent poor quality of personal recordings meant that the demand for studio recordings remained high.

However, the advent of personal digital recording equipment, combined with P2P sharing services, and a consumer population which is becoming increasingly computer literate has created a significantly adverse environment for the recording industry. This change in the marketplace has also been influences by increasing levels of music piracy. The same technological reasons which make personal digital recordings simple and inexpensive for the consumer have opened the door for music pirated to flood the marketplace with their illegally duplicated music. The combined effect for the music industry, in particular a growing Latin American marketplace, has been to create declining revenues, and financial losses.

Recent History of Latin Music Industry.

The Latin music record scene took hold initially in large metropolitan areas which contained large numbers of immigrant, and ethnic population. New York had been long monopolized by RCA Victor, Columbia, and. The domination of these three Anglo companies which dominated the music industry had tended to limit the diversity and quantity of Latin records. These 'majors' were boycotted in 1942 and 1947 by the American Federation of Musicians, and finally, in a confrontation between the two associations of working musicians, BMI (Broadcast Music Inc.) turned to nontraditional (especially black and Latin) popular music when ASCAP (American Society of Composers, Authors, and Publishers) banned its mainstream popular music radio broadcasts in the early 1940s. (Manuel, 1991)

These developments contributed to the rise of smaller, independent firms that were able to service the demand for specialized markets in a more creative, responsive, and energetic way. For Latin music, such developments in the record industry, together with the dramatic increase in migration from Puerto Rico during the 1940s and the big-band "mambo craze" of the 1950s, facilitated the emergence of such independents

In the latter 1960s, Cuban dance music in New York City underwent a transitional period of reorientation and redefinition. Thus, although the "salsa" label was commercial in inspiration, it can be seen as legitimate insofar as it denoted music that had acquired a new social significance and operated in a milieu substantially distinct from that of its Caribbean parent. Salsa's lyrics, like those of its predecessors, the Cuban son and rumba, frequently dealt with local neighborhood events; (Agudelo, 1987) but now the neighborhood was East Harlem rather than, for example, Havana's Guanabacoa suburb.

The growth of salsa as a vehicle of social identity was inseparable from its development as a commercial entity. Indeed, the more salsa flourished, the more it was subject to the pressures of the corporate music industry. Some of these pressures -- toward standardization, stylistic conservatism, and absence of sociopolitical content (Agudelo, 1987) operated in direct opposition to the grass-roots attempt to use the genre as an expression of barrio identity. Thus, the development of salsa can be seen as an ongoing dialectic between the Latino community's attempt to shape salsa as its own sub-cultural expression

The demography of New York City's Hispanic population started changing in the mid-1970s, when the numerical dominance of Puerto Ricans was challenged by the increased influx of Dominicans, Central Americans, Colombians, Mexicans, and others. By 1985 these groups outnumbered Puerto Ricans, many of whom were themselves assimilating to Anglo culture (Bagdikian, 1985) As a result of the continuing rise in Latino population in the major cities, the 'majors' -- especially RCA/Ariola, CBS, A&M, and EMI -- energetically entered the Latin music industry in 1980. While signing contracts with a few salsa groups, the majors concentrated on common-denominator genres whose appeal transcends ethnic and regional markets. Thus, they have focused investment on pop balladeers, Latin soft rock, and crossover artists with both English and Spanish-speaking audiences. (Fernandaz, 1985) T. www.questia.com/PM.qst?action=getPage&docId=96517515&offset=1&WebLogicSession=P1B87N2k2MeEm3B3NviN03rfpEd02xnoInOBQJRo4pE7iQuV1Z3J|9172548956389884772/-1407384781/6/10001/10001/443/443/10001/-1|1072725228914"...

Significant Latino populations in New York, Philadelphia, Miami, the Tejano population in Texas and other southern agricultural regions, and the increasing Hispanic population in southern California, created a contiguous marketing band that reached across the entire country. As other cultural trends, when a new style begins on either coast, the rest of the country will at least give it a try. Thus, as the nation headed into the turn of the century, the market forces created an expanding demand for Latino music.
This demographic preparation gave birth to the stellar rise in popularity and market share for Latino music in the late 1990's. In August of 1999, the Recording Industry Association of America (RIAA) announced that 25.6 million units of Latin music product were shipped in the first half of 1999, with a suggested list value of $291.6 million. This represents a 12% increase in units and an 11% increase in dollars over the same period last year. At midpoint 1999, the Latin music offerings claimed a 4.9% share of the $6 billion U.S. music industry. At the same time in the previous year that share was only 4.5%. Hilary Rosen, president and CEO of the RIAA said "To give the U.S. Latin music market its full due, it's important to recognize that this growth occurred in the midst of an otherwise flat music, and it does not reflect the Ricky Martin/Jennifer Lopez phenomena as these artists' recent English language records are not classified as Latin for this report. That's not to say that these two bicultural artists, with the unmistakable Latin character of their last recordings, aren't contributing to the incredibly rapid expansion of Latin music's consumer base." (American Federation of Music, 1999)

Current Market number of demographic, cultural, and technical influences have robbed the climbing Latin music influence of its momentum. In the past 3 years, these different factors have adversely affected the market's expansion like the wind dropping out of the sales of a clipper ship. In the same way that the market was primed and prepared for the rocketing expansion by a number of factors, a number of factors contributed to the current malaise in the Latin music industry. These factors are:

Peer to Peer file sharing services

Home digital recording equipment and software.

Music Piracy

Peer to Peer Sevices

Affecting not only the Latin music industry, P2P services have created a black hole in the recording industries balance sheets which used to contain significantly positive cash flows. When individual consumers can download and burn their own copies of their favorite artist's songs, in digital quality, the market monopoly has been taken away from the music industry. For example, according to Gabriel Salcedo, CEO of the Trade group Camara Argentina de Productores de Fonogramas y Videogramas, or CAPIF "In Argentina, 153 million musical files -- about 10 million CDs -- are being shared annually, according to data provided by the main ISPs and other sources," (WiredNews.com) He added that around 322,000 users are exchanging an average of 10 songs online every week. But unlike the action taken in the United States by the RIAA, in Argentina and other latin american countries, education and prevention are the preferred methods of persuasion. This may be because the legal structure within these countries is not as strong as the U.S. The level of internal corruption within latin american governmental agencies makes it difficult for a concentrated effort to be applied toward shutting off the flow of illegal file sharing.

Home CD Burning

Closely related to the issue of file sharing is the ability of consumers to burn digital quality music on their own equipment once the files are retrieved. The growing popularity of CD burning and illegal song-swapping has cut into online music sales across the industry, sending them tumbling 25% this year. (CBS News.com, 2002) Internet sales of prerecorded music, such as CDs and cassette tapes, reached only $545 million through the third quarter, well behind last year's total of $730 million for the same period. "Consumers increasingly are seeking…