Future of the Latin American Music Recording Industry
A recent television commercial for the Honda motor cars complete the dialogue of features and benefits of new products with three words from the product spokesperson. "This changed everything" is uttered in astounded disbelief as the person discovers that the new products and services are a breakthrough in the particular product line. The same astonished statement must be applied to the music industry, in the wake of Napster's success, home digital recording equipment, the Internet's ability to distribute music globally with the click of a mouse button, and the technological toys which empower this new digital music distribution platform.
The music industry can no longer operation in a 'business as usual' frame of mind. The music industry must not only adapt, but significantly create a new distribution system which includes the ability to regulate and profit from internet music distribution. Otherwise the financial conditions could collapse, leaving artists, and producers out of the revenue stream which is needed to repay them for the investment of time and energy which they put into production and distributing new artists.
This research has considered three different aspects of the technology and political marketplace which have negatively affected Latin American music sales. The first is the problem of wide spread music piracy. The Latin American music market has currently seen the influx of pirated music and bootleg recordings of commercial artist. The pirated music is absorbing close to 50% of the music sales in some counties. In addition to the financial looses which are felt throughout the recording industry, the presence of inexpensive pirated music is also changing the expectations of the consumers. When they can pick up a CD for $2 to $3 on the street corner, and receive the same quality recordings which are out he store shelves, a market-based resistance is growing toward traveling to the traditional retailer, and paying 5 times as much for the same product. The sociological complications of this phenomenon is making a change in the traditional marketplace distribution system even more important.
The second aspect considered regarding change forces applying themselves to the recording industry are the Internet, and recent success of Peer to Peer file sharing systems, such as napster.com (P2P). The ability of the end use consumer to download their own music, and create customized play lists - disks - is also changing the marketplace through two sociological processed. The recording industry has approached producing records and music products by bundling together the artist popular, promoted songs with those that the are not promoted to the radio and media outlets. As a result, consumers purchasing recorded products often did so for one, or two popular songs. The existence of P2P systems allows the listener to become more selective, and only pursue those recordings which he or she enjoys. Without the necessity to purchase entire collections of music, the consumer is becoming more resistant to paying full prices for one or two favorite songs, and a CD of 'filler.' The issue is not the quality of the music, but rather the ability to choose and select by song rather than by artist is creating a much more segmented marketplace.
Finally, home digital recording equipment is making it possible for home owners, and end users to copy CDs purchased in the store for friends, and other acquaintances. This affects the amount of repeat sales which the companies are experiencing. Home production eliminated the need for friends to purchase commercial or pirated copies of music when they have a friend which can burn them a copy at little or no charge.
The resulting changed marketplace has affected every aspect of the traditional business model for music distribution. Pirated music has flooded the supply. The use of home digital equipment has reduced the commercial, retail demand, and P2P internet distribution systems have realigned the expectations of the purchasing public, as they are able to pursue what the want as an individual song, rather than purchase complete CD collections.
This research now turns toward three aspects of the future of the Latin American recording industry, and pursues answers to the questions of what the companies, governments and artists can to in order to gain control of their futures again. The remainder of this paper will consider:
The Future of Latin American Popular Music: This section will consider the future of Latin American popular music genres. The research will consider how current and EMERGING Latin American music genres will work to reflect a true expression of a pan Latin cultural identity.
The Future of The Latin American Recording Industry: This section will this section must be an in-depth analysis of the industry's present and future, and consider current pricing models, plus propose alternate business models.
Reconstructing the Industry: This researcher will seek to present innovative as well as viable solutions and recommendations to rebuild improve and expand the Latin American industry. Strategies to be considered are:
Reform delivery by aggressively developing tools for benefiting and growing in an increasingly segmented (and reachable) environment and music marketplace via electronic / internet-based music delivery from artist to consumer.
The Latin American recording industry must concentrate on finding strategies to renew, repackage and reinvigorate content by exploiting the region's musical wealth
The market will increasingly become more segmented. Tools need to be developed for researching, gathering and managing accurate, in depth market data.
The Future of Latin American Popular Music
Over the last decades, a growing number of publications in cultural studies, including the idea of ethnomusicology, have grappled with various challenges that our postmodern world poses to its analysis. The postmodern perspective has thrown off the ideas and expectations at a cultural level which look for a unity of thought, design an purpose. As a result, from a marketing perspective, reaching peoples is a matter of identifying segments of the marketplace, and their individual desire, rather than identifying mass trends. So, in order to creation a profitable enterprise, a company or industry must take one of the following approaches.
One option is for the company to identify, and market to a wide number of people and individual tastes with small numbers of products being delivered to each segment.
A second approach to bring products to the market is to identify larger numbers of similar trends, and create products which bridge the gaps, and are still attractive to members of each group.
A third option is for the company to identify a wide assortment of product tastes, and individual preferences across a wider population group, and thereby expand their customer base, and market penetration. This third option is one which the music industry should consider as it seeks to reenergize the marketplace.
Today's social and cultural fragmentation, alienation, dislocation, and disruption are the results of often radical transformations and changed in cultural expectations. Brought about by the collapse of the Western colonialist empires and the subsequent development of new forms of imperialism, for a period of time the capitalism which replaced the colonial and imperialist approaches to society were still built on an approach to the market place which sought to profit from economy of scale, delivering a small diversity of products to a wide number of people.
However, in the music industry, the creation of the internet and the capabilities to deliver individual songs digitally and globally has changed that perspective as well. The creation of a global economy and improved communication systems has facilitated the worldwide dissemination of mass culture. Specifically, trends in Latin America are now becoming part of the Latino population in the central and North American regions. Hence, the market for Latin American music, and the path toward improving the profitability of the Latin American music industry should also consider the North American markets a part of their potential customer base.
The recent census taken in the United States identified that the Latino population had overtaken the African-American people as the largest immigrant population in the United States. This large demographic, with its purchasing power based in American currency is a strong positive contributor to the Latin American recording industry. Therefore any discussion of improving the Latin American music industry must also include discussion of the North American communities which will be purchasing the music.
In the 1990s, it became evident that despite the process of political and economic global unification, "culture" was more diverse and complex than ever before. Rather than blending local differences into a homogeneous global culture, as books such as George Orwell's 1984 pessimistically predicted years ago, culture clashes have released unexpected energies, unleashed creativity, and provided opportunities for counter posing diverse alternatives. The "global village" is not a village, but an urban complex of global diversity, including all the ethnic neighborhoods contained within the city, as stated by Don Ihde (1993).
Confronted with the new realities of the postmodern culture, recording companies need to re-examine and reconceptualize their role in culture in social life. Recent works in cultural studies, indeed, show a "commitment to understanding…