Strike Up the Banda

By DIANE SEO

July 19, 1997 12 AM PT

SPECIAL TO THE TIMES

The folks at Fonovisa have good reason to be talking big these days.

Enrique Iglesias is hot--so hot that chicas across the globe are swooning over the Latin pop sensation and sending his music to the top of the charts.

The 22-year-old Spanish heartthrob, who just happens to have a famous dad named Julio, has had the top single on Billboard’s Hot Latin Tracks for a record nine consecutive weeks and held the No. 1 album spot on Billboard’s Latin 50 chart for 15 weeks.

With a 1996 Grammy for best Latin pop performance and more than 2 million in U.S. album sales behind him, Iglesias may have delivered Fonovisa just the boost it needs to compete against the major record labels on their own turf.

Before the Van Nuys-based record company signed the previously unknown Iglesias in 1995, it had been regarded almost exclusively as a regional Mexican label, specializing in the country’s traditional melodies and love songs.

Now, Fonovisa President Guillermo Santiso feels confident the company can venture in new directions.

“We’re going to other pockets of the market where we don’t have as strong a representation,” he said. “This is a very active company. Things are always happening.”

In many ways, Fonovisa’s rise is similar to that of its star client’s. Fonovisa also has a prominent parental link: Grupo Televisa of Mexico, the world’s largest Spanish-language media company. But in the fiercely competitive Latin music industry, which involves all the major labels vying for larger shares of the growing market, Fonovisa has emerged as a powerhouse in its own right.

Last year, Fonovisa’s total sales to its vendors reached $63 million, up from $350,000 in 1986, its first year in business. Fonovisa also had seven of the Top 50 Latin albums on the latest Billboard chart.

“Fonovisa is definitely the dominant independent Latin record company,” said John Lannert, Billboard’s Latin music bureau chief. “Each year, they streamline their operation and become more shrewd with how to promote their products.”

Fonovisa is credited by many in the industry for developing the U.S. market for banda, mariachi, norteno, ranchera and other types of music that fall into the regional Mexican category.

Santiso “made Fonovisa grow from a small label into a huge empire,” said Catalina Schindler, who has worked in the Latin music industry for nearly three decades. “Fonovisa came out with huge promotional plans and opened up the market.”

Fonovisa was incorporated in 1986, after Televisa acquired Santiso’s previous company, Profono, an independent Latin label that started in 1979. At the time, regional Mexican music had been available in the United States, but the small, independent labels that represented the artists couldn’t afford to advertise and the market stagnated. But backed by its wealthy parent company, Fonovisa began extensively promoting its artists and saw its sales soar.

After signing with Fonovisa, acts such as Los Bukis, Bronco and Los Tigres del Norte exploded in popularity, inspiring other regional groups to enter the U.S. market. Because it took time for the major labels to hook on to the trend, Fonovisa was able to establish its dominance early on.

“It was music that a lot of people frowned upon because it was considered too country,” said Eduardo Safa, director of administration and finance at Fonovisa, which produces, promotes and distributes its music across the United States and licenses its products to companies in other countries. “But we found that there was a huge market for it. It was a niche market.”

But executives at Fonovisa and the other Latin labels acknowledge that they would not be where they are if it hadn’t been for one thing-- immigration. Since 1986, the U.S. Latino population increased from 17.3 million to 28 million, the U.S. Census reported.

“The continuing flow of new people has provided all the Latin labels with ready-made customers,” Lannert said.

Regional Mexican music gained a large U.S. following for simple reasons, Schindler said. “It speaks to the soul of Mexican people, their adversities, their loves, their problems with immigration,” she said. “It enters their hearts because it mirrors the life of a Latino.”

Regional Mexican music is still the hottest Latin sound on the West Coast and Fonovisa remains a leading regional Mexican label, but the company now faces tough competition in its own area of expertise.

And Fonovisa still falls behind EMI Latin, Sony Discos and BMG Music in terms of total U.S. Latin album sales. Last year, Fonovisa had 12.1% of the 15 million Latin albums sold by SoundScan-tracked retailers. That was behind Sony’s 15.9%, EMI’s 15.8% and BMG’s 12.5%, according to a SoundScan market share report.

SoundScan’s figures don’t include album sales at swap meets and small stores, which make up most of the regional Mexican business, Santiso said.

Many see the signing of Iglesias as an indication of how the company hopes to grow. Indeed, Fonovisa has much to gain by extending its influence into other genres. In 1991, wholesale Latin music sales in the United States were estimated at $60 million, Billboard’s Lannert said. Last year, that figure rose to between $230 million and $250 million.

To establish its prominence in other areas, Fonovisa plans to do what it does best--promote, market and push. Since its early days, Fonovisa has earned a reputation as one of the most aggressive promoters in the industry.

Of course, Fonovisa has a big advantage over other companies when it comes to touting its artists. Because of Televisa’s extensive international television, radio and publishing holdings, Fonovisa gets prime exposure for its artists and discounted advertising rates.

“Fonovisa artists have all these doors open to them, because Televisa is just a humongous empire with radio, television and all these wonderful magazines,” said Raquela Rios-Mejia, general manager of Oro Musical, a small Latin record label in Los Angeles. “It’s almost a sure thing they will be successful.”

When it does not have its Televisa ties to take advantage of, Fonovisa is known to hold little back to hype its artists. Iglesias received a barrage of television, radio and print exposure, including an appearance at this year’s Miss Universe pageant, which was broadcast live in more than 15 languages.

And take, for example, the company’s recent promotional blitz of Los Tigres del Norte, one of its most popular bands. To kick off the group’s new double CD, Fonovisa persuaded dozens of Spanish-language radio stations to play only its songs for 24 hours.

Santiso said the stations went along with the marketing coup because it’s to their benefit to play the norteno band’s songs. But others believe Fonovisa’s hefty advertising purchases is the reason it gets so much radio airplay.

“Fonovisa has tried to monopolize the market . . . as much as possible,” said Jose Garcia, who used to work in promotions and marketing for WEA Latina and BMG Music and now runs his own consulting business. “They buy a lot of air time, so they can buy programming at the radio stations.”

Juan Carlos Hidalgo, program director at KLAX in Los Angeles, which specializes in regional Mexican music, said the station selects songs solely on the talent of the artists. Advertising dollars have no correlation to air time, he said, although he does note that Fonovisa spends more to advertise at KLAX than any other label because it specializes in the same type of music.

However, there also have been complaints by competitors that Fonovisa purchases radio commercials that feature lengthy excerpts from their songs. These song snippets were believed to air long enough to register as a “fingerprint” by Broadcast Data Systems, which records radio airplay, influencing which albums retail stores decide to carry.

Last month, however, a new system was put in to place to prevent skewed results, and Fonovisa still dominated the radio category on the latest Billboard chart, with 16 of the top 40 Hot Latin Tracks.

“They can change whatever system they want to and it won’t affect our success,” Santiso said. “What radio stations play is just a reflection of what people want to hear.”

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Topping the Latin Charts

Enrique Iglesias is No. 2 on Billboard’s Hot Latin Tracks (radio airplay) and on Bill board’s Latin 50 (album sales). The No. 1 is another band under the Fonovisa label, Los Tigres del Norte.

Latin 50

Complied from a national sample of retail store and rack sales reports supplied by SoundScan.

Fonovisa

Number of albums in Latin: 8

EMI Latin

Number of albums in Latin: 13

Sony, Sony Discos, Tropical and Sony Latin

Number of albums in Latin: 10

PolyGram Latino

Number of albums in Latin: 4

Aroila/BMG

Number of albums in Latin: 7