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Streaming Propels U.S. Latin Recorded-Music Industry to First Revenue Growth In More Than a Decade

Revenue from the Latin sector of the U.S. recorded-music industry grew last year for the first time since 2005, up three percent over 2015 to $176 million, according to the RIAA.

Revenue from the Latin sector of the U.S. recorded-music industry grew last year for the first time since 2005, up three percent over 2015 to $176 million, according to the RIAA. As with the broader U.S. recorded-music industry — which last year grew by double-digits for the first time in nearly 20 years — that growth was driven by the rise of streaming, with that format accounting for an incredible 74 percent of revenue, an increase of 19 percent over 2015.

On-demand subscription revenue nearly doubled year-over-year, growing 89 percent to $52 million and comprising 30 percent of all revenue, the largest slice of any revenue model. Ad-supported streaming was up 45 percent and accounted for $34 million, while SoundExchange payments, despite being down 25 percent over 2015, generated $44 million.

That growth was enough to stop the Latin industry’s slide, which had been declining since reaching an industry peak of $754 million in 2005.


Sales declined in the Latin market as well, with both digital album sales (down 39 percent) and digital track sales (down 22 percent) contributing to a 28 percent downturn in digital sales, to $21 million. Physical sales showed a similar decline, down 26 percent to $22 million; at 12 percent of the market apiece, digital and physical sales accounted for under a quarter of total revenue. Meanwhile, combining both digital sales and streams, revenue from digital increased from 83 percent of revenue in 2015 to 88 percent in 2016.

That’s a much starker split than exists in the broader U.S. recorded-music industry, where streaming revenue overtook sales revenue for the first time in 2016, accounting for 51 percent of the total market, and combined digital revenue added up to 78 percent of the market. In a note accompanying the release of the data, outgoing RIAA chairman/CEO Cary Sherman shared some thoughts about that disparity.

“The dynamics of the Latin market differ in some key ways,” Sherman wrote. “For one, Latin music never really transitioned from physical to digital downloads but instead moved directly into streaming. That’s notable and likely one of the reasons the Latin music market experienced growth for the first time in more than a decade… At the same time, the disproportionate share of streaming coming from the free, advertising-supported platforms means that the below-market valuation of music resulting from outdated federal laws particularly impacts the Latin market and its potential for future growth.”


The RIAA report also broke out the top sub-genres within the Latin market — defined as a release that is at least 51 percent in Spanish — based on physical shipments, with regional Mexican music (50 percent) and pop music (41 percent) dominating. Tropical (seven percent) and urban (two percent) rounded out the sub-genres. That’s less surprising when looking at Nielsen Music’s top-selling Latin albums of 2016, which was dominated by the late Juan Gabriel, whose work accounted for four of the top five highest-selling albums of the year.

The explosion of streaming in the Latin market — in addition to a wide range of other topics — will be the focus of a panel at this week’s Billboard Latin Music Conference, which will culminate in Thursday night’s (April 27) Billboard Latin Music Awards, which will be broadcast live on the Telemundo Network.