Esta página no está disponible en español.
THE WALL STREET JOURNAL
Latin Music Problem: Albums Are Truly Hot
By JENNIFER ORDONEZ
August 20, 2002
It was with great caution that visitors were permitted to pass through the guarded gates of Conway recording studios in Los Angeles recently. In small groups, the media, radio programmers and other music industry types were escorted into a room to preview eight tracks from "Revolucion de Amor," the album due out Tuesday from the Mexican band Mana.
At first, everything seemed to go smoothly. Press and radio personnel alike voiced enthusiasm for the tracks that Mana drummer Alex Gonzalez describes as "probably the most relaxed we've ever done." Warner Music Group expects the album from Mana, known as the "U2 of rock-en-Espanol," will be its biggest Latin release of the year.
Then, one of the band's handlers spied someone exiting the studio in a hurry -- "una Americana," (an American woman), according to one witness -- carrying what looked to be a recording device hidden under a towel. In the worst-case scenario, the security breach could mean tens of thousands of counterfeit copies for sale on the streets before the album's release date -- exactly what the band and label were trying to avoid by holding the listening party rather than sending out hundreds of advance copies of the CD.
Although Internet piracy and computer file-sharing command much of the headlines these days, physical piracy -- the sale of illicit copies of whole compact discs -- is still a far bigger problem. Big artists from every genre are victims, a fact underscored earlier this year when Vivendi Universal SA's Interscope Records pushed up the release date for an Eminem album in part out of fear that bogus copies would hit the streets first.
But with the proliferation of CD burning in Latin America, artists like Mana may have it even worse. In some Latin American countries, pirated music accounts for more than half of the albums on the market by unit, according to the International Federation of the Phonographic Industry, which tracks global record sales. "It is the biggest problem we face," says Inigo Zabala, president of AOL Time Warner Inc.'s Warner Music Latin America. The reason, say music industry executives, is lax enforcement of copyright protection laws in some countries.
In 2001, 61% of Mexico's music market was taken up by pirated product, according to the IFPI. In Brazil, 55% of music available for sale is pirated while in Colombia, pirated product made up 65% of the market last year. The music is usually sold at flea markets and street stalls, often for a few dollars a disc.
Although music piracy has long been a problem in Latin America, record companies say the issue has become more serious in recent years as high-quality counterfeit compact discs have replaced the once-standard cassettes, a format where sound quality was considerably worse on a counterfeit copy. With CD-copying devices easily available, these days the contraband can hit streets in as much time as it takes to pull music off the Internet and start cranking out CDs.
The stakes have gotten even higher as the U.S. market for Latin music has grown along with the burgeoning Latino population. During the past two years, sales of blank recordable compact discs have more than doubled world-wide. While Latin music makes up roughly 5% of U.S. music shipped to retailers, it makes up about 24% of all pirated recordings seized in the U.S., says Hilary Rosen, chairman and chief executive of the Recording Industry Association of America.
Still, in a slumping music market, record companies are increasingly looking to Latin artists, who started their careers outside of the U.S., to become market-share leaders in the U.S. Recent examples include Shakira from Sony Corp.'s Sony Music Entertainment and Universal Music Group's Paulina Rubio.
Such lofty goals require marketing and promotion well in advance of the record's release, however. And that's potentially a big problem because even the small numbers of advance copies the music companies send to media and radio programmers can fall into the wrong hands and lead to counterfeiting.
Last month, Universal Music Group skittishly released a new single, "Mentiroso," from pop singer Enrique Iglesias's new album to radio programmers, but only the day before its release. It sent the single via traceable electronic files that couldn't be copied as well as a small number of compact discs that were hand-delivered to some stations. The company also is withholding from retailers the album's cover art, typically used to promote an album in advance of its street date, until its Sept. 17 release, to prevent it from getting into counterfeiters' hands. "It has been such a conundrum," says John Echevarria, president of Universal Music Latino . So far, no counterfeits have been detected.
The piracy problem has also put pressure on music companies to closely coordinate international release dates in Mexico and the U.S. so that neither country gets it early, which could lead to bootleg sales in the other. That creates a dilemma for artists such as Los Tucanes De Tijuana and Pedro Fernandez, who must choose whether to first promote the album in Mexico, where they are already popular, or in the desirable U.S. market, where they are building their fan base.
In an environment where artists must catch on quickly or risk being deprioritized by record companies under pressure to improve their bottom lines, the piracy problem in Latin America can present even bigger challenges for new artists, as well as established Latin groups trying to expand in the U.S.
"The basis for any label wanting to pick up a band is legitimate album sales," says Jason Garner, manager for El Tri, a popular Mexican rock group that has legitimately sold more than 10 million albums world-wide, a number the band says represents only a fraction of actual sales, including bootlegs, over its 34-year career.
"Unless the artist is like a Porsche -- zero to 60 in five seconds -- the rate of return for the labels diminishes significantly," says Rafael Fernandez, a former commander in the Miami-Dade police department's fraud section who last year was hired by the RIAA to head a new Miami-based unit to address Latin-music piracy. Since then, the RIAA has begun several antipiracy programs, including sweeps of flea markets in Los Angeles, South Florida and New York.
Still, Mr. Fernandez says, although they have seen some improvements since they started, the problem is "a cultural issue" he doesn't expect will disappear soon. "The most difficult challenge is to change people's mindset about how they purchase music."
Meantime, Mana's handlers, who are looking to expose the band to a larger U.S. audience, have held their breath in hopes that no copies of the album leaked before Tuesday's release. So far they have been lucky. But had illegal copies shown up, the group had drafted a contingency plan to rush the record into stores up to two weeks before its release Tuesday, potentially sacrificing valuable prerelease promotion time.
"We've had a couple of false alarms and we all panic," says Peter Lopez, the band's attorney. "It's a sad state of affairs."