Musica Explosion

Latin Trade, Oct, 2000 by Jack Epstein

Latin music sites scramble for customers.

JENNIFER MERKLE'S INTERNET STARTup--MiMusica.com--is just one of dozens of new Web sites that have sprouted in the past year to cash in on the growing demand for Latin music and a measure of how suddenly crowded the playing field has become.

Her competitors are mostly Miami-based firms--led by male executives and backed by private investors--which favor more tropical beats like salsa and merengue. Merkle, meanwhile, is a year-old East coast gringa based in San Francisco whose online specialty is Mexican ranchera and norteno music. "Miami sites tend to look down on Mexican music" says Merkie.

Times have changed for Latin music e-commerce sites. Gone are the days when a lone, U.S.-based Web site could dominate a category from Poughkeepsie to Patagonia. Now Merkle and the Miameros are battling others to gain the lead, and to create choice in a market jammed with very different genres.

"It's never been more right for Latin music," says Anne Cook, an Oakland-based consultant for Internet music sites. "If one person like this woman [Merkle] breaks through, they will all come running."

Merkle, who says she has a "corazon Latino," recognizes that Latin music has never been hotter commercially, now accounting for close to 4.5% of the US$13.7 billion music industry, according to the Recording Industry Association of America.

The start-ups have names like Dgolpe.com, Lamusica.com, Latinmusicworld.com, Musicavirtual.com and Latinmusica.com. Even crooner Julio Iglesias has thrown in with the Miami crowd to create aplauso.com, a site that sells CDs and provides music news from bureaus in Brazil, Argentina, Mexico and Spain.

These burgeoning Internet ventures can lay claim to a Hispanic audience that is expected to nearly quadruple, from 10 million to 38 million, by 2003. The growth is based partially on wireless and cable Net access technologies and community access centers, such as public "cabinas" and Internet cafes.

As a result, millions are being spent on Web site creation. In one of the latest announcements, the Miami-based Morfeo.com, said it would invest $15 million to launch an online Latin radio network in English, Spanish and Portuguese. Listeners will be able to play songs as they look up the artists and buy CDs.

Switched at birth? Back in the Silicon Valley, Merkle is redesigning her Web site and using an unconventional grass roots marketing approach to sell CDs. She sends five contract employees scattered around the United States to leave fliers at dance clubs and local professional Latino Associations in three main market areas--New York, Los Angeles and Miami. Her site now offers more than 10,000 CDs of every genre and has grown from 50 orders a month to 200. "Word of mouth has brought us many customers," she says.

Merkle fell for Latin music after spending her junior year studying in Alicante, Spain. "My parents still don't know what to make of me. They think I was switched at birth," she says.

She moved to Silicon Valley in 1995 after business school to take a job with industry titan Intel. There, she worked closely with several Internet start-ups and learned the trade.

In 1998, Merkle signed on with UsaNet.com, a firm that sets up free Web-based email accounts. Soon after, she created MiMusica.com, launched in December. Although she hasn't quit her day job at UsaNet.com, Merkle remains optimistic about the venture's future.

Not that there aren't clouds on the horizon. Down the road in San Mateo, a company called Napster has drawn the wrath of leading record companies. Napster helps users find and download songs from other users' computers for free. As a result, the notorious site and has been accused of everything from encouraging piracy to establishing revolutionary distribution models. The entire matter has ended up in court, naturally.

Merkle, however, scoffs at such competition. "They are still scratching the surface in the amount of CDs available," she says.

Still, Merkle sees a merger coming. She knows most Latin music Web sites will eventually be gobbled up by corporate entertainment outfits like Telemundo or Univision.

After all, even in the brave new world of the Internet, the richest companies usually get to call the tune.