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Latin Music Revenue Up 44%, Payouts Still ‘Despacito’

For all the streaming glory benefiting Latin music with global hits such as “Despacito,” it’s the lackluster payouts from on-demand services such as YouTube that should serve as a call to action, according to Cary Sherman, RIAA’s chairman and CEO.

Sherman’s appeal comes in the latest RIAA mid-year report, which shows that U.S. Latin Music revenues in the first half of 2017 grew by 44% ($115 million), from the previous year.

But even the power of streaming accounting for the majority of Latin music’s revenue rise at 82% doesn’t satisfy the monetary disbursements. Artists and labels, according to the RIAA report, cleared $20 million from free on-demand services such as YouTube. Latin music revenues made up 2.9% of the total U.S. recorded music market totaling $4 billion in the first half of 2017.

“These enormously successful and profitable companies can do better,” says Sherman, addressing the disparity. “That’s why a united music community continues to be incredibly animated about music’s value gap and calls upon policymakers across the globe to address these inequities.”

This year’s biggest Latin hits, both from Universal Music Latin Entertainment, comes courtesy of Luis Fonsi and Daddy Yankee’s “Despacito,” which includes a remix version with Justin Bieber. Similarly, J Balvin and Willy William’s “Mi Gente,” including a remix version with Beyonce, dominated the music scene with unprecedented streams.

Artists from Christina Aguilera to Bruce Springsteen have added their names to valuethemusic.com to show her concern over the overall “value gap,” which continues to plaque the music industry. YouTube, founded in 2005 by three former Paypal employees, benefits from distributing songs uploaded illegally daily, claiming they do not need a license because of the Digital Millennium Copyright Act that RIAA and others call outdated.

The mid-year report indicates that revenues from ad-supported streaming sources were disproportionate at a higher percentage of total revenues as unit-based sales such as digital downloads and physical products indexed lower.

Paid subscriptions made up the largest share compared to last year, growing rapidly at 74% to $40 million, comprising 35% of the total market value, the RIAA reports. On demand ad-supported streams that includes YouTube, Vevo, and the free version of Spotify provided a 34% increase year-over-year for a total of $20 million, revenue that accounts for 18% of the total market value.

Physical and digital unit-based Latin music product sales decreased in the first half of 2017 by 14% as track downloads decreased by 4%, according to the RIAA report. Additionally, total digital download revenues were down 6% to $10 million and revenues from physical shipments of Latin music products were down by 15% to $7 million.

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