Latin Music: Bigger Than Reported?

Latin music, already labeled the fastest-growing segment of the U.S. market, may be even more popular than is widely recognized, according to a new study by the Recording Industry Assn. of America.

The study--the association’s first on the music-buying habits of U.S. Latinos--concluded that 24% of Latinos purchase CDs and cassettes primarily through independent “mom-and-pop” stores that do not report music sales to SoundScan, the organization whose figures largely determine the hugely influential Billboard magazine charts. The magazine rankings influence mainstream media coverage of artists and are sometimes used to measure the credibility of record labels.

The finding supports long-standing concerns among Latin music label executives that their unit sales are routinely undercounted in the U.S.

Mike Shalett, chief operating officer for SoundScan, says his organization has made great strides to enlist independent vendors in Latino communities, but acknowledges it would be nearly impossible to track sales in shops without electronic cash registers, or in nontraditional outlets such as drugstores and flea markets. The RIAA study found a high percentage of music was purchased in such locations.

SoundScan has in recent years hooked into Latin music chains, such as Ritmo Latino, and continues to reach out to smaller music vendors. But many vendors are still wary of the organization and, Shalett says, must be educated about SoundScan’s role.

“There’s a natural suspicion on the part of some people that sales reported to SoundScan will be reported to the government,” Shalett says. “We don’t do that. We have confidentiality agreements with our customers.”

Shalett says SoundScan is probably undercounting some sales in Latino communities, but says the figure is not as large as the RIAA or Latin labels say it is. “We’re very committed to this area,” Shalett says, “and we’ve done an awful lot of work.”

But according to Ricardo Dopico, director of the RIAA’s Latin division, and many executives in the Latin music industry, undercounting is still a major problem. The RIAA says 39% of all Latin music sales are never reported to SoundScan.

Some Latin label executives say the percentage of unreported sales is even higher, particularly in Mexican regional and tropical genres. Jose Behar, president of EMI Latin, says SoundScan routinely undercounts sales of Mexican regional music on his label by 85%.

George Zamora, president of the WEA Latina label, says SoundScan does the best it can, considering the reluctance of many vendors. Still, he claims SoundScan misses half of his label’s Latin pop sales, 70% of his tropical sales, and 85% of his Mexican regional sales. For example, the label’s superstar rock group, Mana, has sold 900,000 copies of its last album, according to the label, but SoundScan has only tracked 300,000.

RIAA President and CEO Hilary Rosen said the organization conducted the study “because our Latin labels wanted a meticulous profile of Hispanic consumers of music.”

The study also concluded Latinos make up a “healthy marketplace” where young and old buy a lot of music, and where English-language music is nearly as popular as Spanish-language, especially among younger buyers.

As with the general market, a third of the Latino population buys two-thirds of the music. These avid buyers were divided into two categories, called “young hipsters” and “still grooving.”

The “young hipsters,” between ages 14 and 29, make up the single-largest consumer group, purchasing an average of 43 or more CDs a year. Only 42% speak Spanish at home all the time, and they are the least likely to listen to Spanish radio. Nonetheless, they list “Latin” as their favorite type of music, specifically pop and tropical. English-language pop, rap/hip-hop and R&B; are almost as popular. Their least-favorite types of music are classical, gospel and country.

The “still grooving” cluster, made up of mostly married people between ages 30 and 54, is the second-biggest group of consumers. About 60% speak Spanish at home all the time, and they buy an average of 39 CDs a year. They prefer Spanish-language ballads, and tropical. In English, they favor dance music and classic rock. Their least-favorite types of music are rap and alternative rock.

The study also found marked regional differences among Latino music buyers. Those living in New York City have the largest music collections, and are most likely to shop in independent stores. Those in Miami spend the most time listening to music, while those in Los Angeles are the most interested in Mexican subgenres and the least likely to shop in independent stores.

Sixty-three percent of all polled say they listen to Spanish radio. Mexican regional is the most popular Spanish radio format, with merengue and salsa tied for third. In English-language radio, easy listening stations are most popular, followed by rap/hip-hop, pop, alternative rock, oldies and variety. The least-favorite formats are Christian and talk radio.

The study was conducted in September by the Market Segment Group, which engaged in 25-minute phone interviews with more than 900 Latinos in New York City, Miami, Los Angeles, Houston, Chicago, San Francisco and Phoenix.

The study has been criticized for not having included anyone on the island of Puerto Rico, where Latinos generally buy more music per capita than on the mainland. Dopico said the oversight was not intentional, and will not be repeated in the future. “This was not meant to be an all-encompassing study,” said Dopico. “There is certainly room for improvement.” The study is ongoing and will be repeated next year.