Strong Economy Limits Decline In Argentine CD/DVD Sales

Buoyed by robust economic growth, physical music sales in Argentina suffered only a relatively modest decline in 2010.

The Argentine economy grew by 9.1% last year, a sharp improvement from just 0.9% growth in 2009, President Cristina Fernandez said during a speech in February.

That helped limit the drop in physical music sales in 2010. According to Argentina's recording industry trade group CAPIF, Argentine sales of music in all physical formats slipped 3.9% to $79.5 million last year from $82.7 million in 2009. Among physical formats, CDs accounted for 88.1% of sales, up from 87.3% a year earlier.

Argentina's strong economy has helped physical music sales remain relatively resilient despite the continued decline in the number of traditional music retailers. Tower Records shut its last store in Argentina in 2003, and Dromo, another major music chain, closed its doors in 2007. In February, the country's last major music chain, Musimundo, was sold to Megatone, an appliance and electronics chain.

But CAPIF executive director Javier Delupi says Megatone's acquisition of Musimundo could present an opportunity. While most of Musimundo's 45 stores are concentrated in Buenos Aires and other big cities, Megatone's 148 stores are spread throughout the country. That national reach could benefit record labels if, as the local press has reported, many Megatone stores will start carrying music.

"Although the business model is trying to evolve," Delupi says, "physical formats are what's keeping things going."

Few releases have illustrated that evolving business model better than Marco Antonio Solís' "En Total Plenitud" (Universal), Argentina's best-selling album of 2010.

Solís bundled the purchase of "En Total Plenitud" into the price of tickets for his extensive Argentina concert tour, which was timed with the album's release in October (Billboard, Nov. 6).

According to CAPIF, "En Total Plenitud" was certified triple-platinum for shipments of more than 120,000, with the ticket/CD bundle accounting for 70% of the album's total sales in Argentina, according to Universal.

The endeavor was so successful that the label is going to offer another ticket/CD bundle when Solís returns to Argentina for a series of eight to 10 shows later this year, Universal VP of Latin artists marketing Angel Kaminsky says. He adds that the label also plans to explore similar ticket bundling strategies whenever possible with all artists.

Meanwhile, CAPIF once again declined to disclose annual value or unit sales totals for the digital and overall music market. The trade group would only state that digital sales accounted for 12% of overall music sales, up from 7% from 2009. Nearly all of those sales-96% in 2010, according to CAPIF-stemmed from mobile sales. (A comparable mobile tally in 2009 wasn't available.)

Eight of the top 10 best-selling albums in Argentina last year were by adult contemporary artists, including Solís' "En Total Plenitud," Ricardo Arjona's "Poquita Ropa" and Sandro's "Sandro Lo Mejor," a CD/DVD collection. At No. 4 was "Teenangels 4," the soundtrack to the phenomenally successful teen TV series of the same name.