The Recording Industry Association of America released a year-end revenue report this week that detailed the rapid growth of the Latin recorded music market in the United States. Any conversation about the Latin music market starts with one word: streaming, RIAA COO Michele Ballantyne wrote.
According to the RIAAs latest report, the U.S. Latin music industry experienced its second straight year of double-digit growth in 2018: The market grew 18 percent in 2018 to $413 million up from $349 million in 2017. This can be attributed to a near-50 percent growth in revenues from paid subscription services like Apple Music, Spotify Premium and many others. Latin musics transformation from a physical-based business to a streaming-driven one is even faster than the overall U.S. music markets turnaround, wrote Ballantyne, listing J Balvin, Daddy Yankee, Ozuna, Karol G, Rosala and Bad Bunny among the industrys Most Valuable Players.
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Revenues from streaming now comprise 93 percent of the total Latin market, she continued in comparison to the general U.S. music market, which sourced 75 percent of its revenue from streaming services in 2018. Including estimates for both independent and major record label releases, Latin music accounted for 4.2 percent of the total $9.8 billion U.S. music business, a slight increase from 4 percent in 2017.
Meanwhile, revenues from on-demand, ad-supported services like YouTube, Vevo and Spotify grew at 34 percent to $91 million. This comprised about 24 percent of total Latin music revenue and 8 percent of the overall U.S. music market. (Latin acts most notably Ozuna, named YouTubes most-watched artist in 2018 accounted for 21.8 percent of all video streams last year, trailing close behind that of English-language rappers.)
There are inherent challenges for any market where fans have a heavier reliance on free, ad-supported services, added Ballantyne, an area that has not yet reached its full potential due to the efforts by some platforms to drive down the value of music. In addition, hard Latin music sales have also continued to dip, according to the report: Digital download sales fell 23 percent to $20 million, and revenues from physical product was only $6 million, down 63 percent versus 2017. Together they only comprised 6 percent of U.S. Latin music revenue the lowest numbers reported to date.
The full report is now available online, courtesy of the Recording Industry Association of America.