The U.S. Latin music business experienced its second year of double-digit growth in 2018, driven almost entirely by streaming, according to the RIAA’s year-end report.
The Latin market grew 18% in 2018 to $413 million, driven by a nearly 50% growth in revenues from paid subscriptions, the report says. Streaming formats made up a whopping 93% of total Latin music revenues, compared with 75% for the overall U.S. music market. Latin music accounted for 4.2% of the total $9.8 billion U.S. music business, a slight increase versus 4.0% in 2017.
Artists mentioned in the report include J Balvin, Daddy Yankee, Karol G, Ozuna, Rosalia, Luis Miguel, Bad Bunny and Sofia Reyes.
“Any conversation about the Latin music market starts with one word: streaming,” said RIAA COO Michele Ballantyne in the report. “Latin music’s transformation from a physical-based business to a streaming-driven one is even faster than the overall U.S. music market’s turnaround. Revenues from streaming now comprise 93% of the total Latin market, with paid subscription services fueling most of the growth.
“But,” she acknowledges, “there are inherent challenges for any market where fans have a heavier reliance on free, ad-supported services – an area that has not yet reached its full potential due to the efforts by some platforms to drive down the value of music.”
Paid subscriptions from services like Apple Music, Spotify Premium and Amazon Unlimited grew 48% year-over-year to $239 million, making it the biggest driver of growth for Latin music and 58% of the total U.S. Latin music market, according to the report. Revenues from on-demand ad-supported services (which includes YouTube, Vevo, ad-supported Spotify, and others) grew at 34% to $91 million. This category made up 24% of total Latin music revenues, a significantly larger proportion than the 8% it contributed to the overall U.S. music market.
However, Latin music revenues from digital and customized radio such as Pandora and SiriusXM decreased: Revenues from SoundExchange distributions and royalties from similar directly licensed services were down 29% to $54 million in 2018. Also, physical and digital unit-based sales of Latin music continued to decline. Digital download sales fell 23% to $20 million, and revenues from physical product was only $6 million, down 63% versus 2017. Combined, they only accounted for 6% of U.S. Latin music revenues.