Recorded Music in Latin America

Market Latin America, July 1, 2006

Sales of recorded music fell overall in the Latin America region during 2005. But the region had a better year than the world generally. Sales in the region declined 0.4 percent in 2005 compared with a decline of 3.0 percent worldwide.

Total sales of recorded music in Latin America were us$663.3-million in 2005. Brazil was the biggest market posting 2005 sales of us$265.4-million. This represents a decline of 12 percent compared with 2004 sales. Worldwide 2005 sales were us$33-billion.

The statistics were reported by the Latin Business Chronicle on April 3, 2005. The online publisher cited a market research report released by the International Federation of the Phonograph Industry (IFPI) as its source. The Chronicle said that the figures measure trade revenues, not retail sales.

Mexico is the region's second biggest market for recorded music. Sales there increased 10 percent during 2005 to us$262.2-million-obviously very close to Brazil's sales total.

Argentina is the region's third biggest market with 2005 sales of us$51.4-million. This represents an increase of 28 percent from 2004 sales.

Venezuela increased recorded music sales 12 percent in 2005. And 2005 sales in Colombia were up 6 percent.

Paraguay was the region percentage increase leader in 2005 increasing the country's music sales 102 percent when compared with 2004.

Mentioning Paraguay in the context of recorded music sales brings up the central reason the Chronicle and its source IFPI said was the driving force behind Latin America's ability to staunch recorded music sales declines better than the rest of the world. That reason is that Latin America has done a better job of dealing with the obviously huge problem of piracy in the region-especially in Paraguay.

Worldwide, says the IFPI, 34 percent of sales of recorded music is counterfeit. It follows that in terms of market share, pirates can claim one third of the business.

The IFPI keeps track of what it calls "priority" countries where piracy is especially rampant. It has developed a statistic called the "piracy level," which compares the value of the legal market for recorded music with the value of pirated product. In Brazil, for example, the "piracy level" is 52 percent, according to the IFPI's "The Recording Industry 2005 Commercial Piracy Report." In Mexico, the "piracy level" is 60 percent. And in Paraguay, piracy is reported at an astonishing 99 percent.

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