U.s. Latin Music Sales Break Records As Business Expands

Just how powerful is the expansion of the U.S. Latin music industry nowadays? Well, consider that the stateside Latin music business has already generated more units sold in the first three quarters of 1999 than it did in the whole of 1998-which itself was a record sales year for the business.
SoundScan's inaugural third-quarter distributor market share report reveals that domestic Hispanic record labels delivered 16 million units in the period from Jan. 10 through Oct. 3 of this year. In 1998, the stateside Latin music business generated 15.9 million units in sales-a record annual tally as recorded by SoundScan.
Unit sales in the first three quarters of 1999 have ascended as well: They rose from 4.8 million in the first quarter to 5.2 million in the second to 6 million in the third. And with the traditionally robust fourth quarter coming up, sales of Spanish-language product could approach 22 million to 23 million units total this year.
"There is a lot of blockbuster product coming out in the fourth quarter from artists like Juan Gabriel, Los Tri-O, and Ricardo Arjona," says David Massry, president of Neptune, N.J.-based indie Ritmo Latino. "So sales should be strong. And our sales increase, which has been 10%-11% so far this year, should rise to about 15% in the fourth quarter."
Another factor contributing to the ever-growing U.S. Latin music market, says Massry, is the increasing sales of CDs compared with cassettes. The latter were previously favored by Ritmo Latino's largest customer base-fans of regional Mexican acts.
"Cassettes are dying," says Massry. "They make up only 20% of my sales now, whereas it used to be more than 30%."
The ongoing trend of new stores featuring Spanish music continues to help boost sales as well. Massry has opened four stores in 1999, including Ritmo Rock, a Los Angeles outlet devoted exclusively to Spanish-language rock.
Massry will announce the opening of more stores on Oct. 26 during the second Ritmo Latino convention in Los Angeles.
Though SoundScan has added nearly 50 stores to those monitored in the past year, most Latin industry executives estimate that SoundScan still only covers 30%-45% of the Hispanic music market.
Sony Music Distribution (SMD) continues to lead all distributors in the latest tally, but its market share of 27.3% is up only 0.3 percentage points compared with the same time frame last year. Further, SMD's latest market share represents a drop of 2.2 points from its market take as stated in SoundScan's 1999 midyear market share report.
By contrast, Latino indies showed a dramatic five percentage point spike in third-quarter market share, to 24.9%. The indies were led by Fonovisa, the Los Angeles label whose market share of 13% through three quarters of 1999 is 2.3 points higher than in the same period last year.
In addition, thanks to a greatest-hits set from its former artist Enrique Iglesias, Fonovisa's market share has risen 1.3 points from the 11.7% recorded in SoundScan's 1999 midyear report.
The indies' current stake in the domestic Latin music industry has been secured at the expense of not only Sony but the balance of the other distributors save BMG, whose market share rose 1.4 percentage points in 1999 compared with 1998.
The loss of market share from 1998 to 1999 among the majors was spread equally. Universal Music and Video Distribution (UMVD) lost 2.7 percentage points (11.3%-8.5%), EMI Music Distribution dropped 2.2 points (19.2%-17%), and WEA Corp. slid 1.7 points (14.3%-12.6%).
The market shares of Sony and UMVD dropped for the second straight time this year, with UMVD's market share falling to an all-time low in 1999 of 8.5%.
By contrast, WEA Inc.'s market share in the third quarter rebounded nearly three percentage points from the midyear report, due in large part to hit product by Luis Miguel, Buena Vista Social Club, and Buena Vista Social Club vocalist Ibrahim Ferrer.
Ricky Martin, Selena, and Elvis Crespo continue to occupy, in succession, the top three slots of artists with the best-selling discs so far this year.
Martin's Sony Discos smash "Vuelve" has sold 457,000 units, followed by Selena's EMI Latin greatest-hits set "All My Hits-Todos Mis xitos" (343,000 units) and Crespo's debut merengue package on Sony Discos titled "Suavemente" (317,000 units).