Merger of tropical labels reflects market hardships
By Leila Cobo
MIAMI (Billboard) - Tropical independent label MP, known for its hard-hitting, Puerto Rican salsa acts, has merged its operations with indie powerhouse J&N, best known for its merengue and bachata releases.
The move is a reflection of the hardships faced by tropical music labels, which have seen radio stations switch formats and sales decline in the past decade. Tropical music, which in the 1980s and 1990s was a bastion of Latin music and identity, now accounts for less than 10 percent of all Latin music sales, according to Recording Industry Association of America numbers.
By joining their respective areas of expertise, MP and J&N are hoping for more sales and clout on radio and at retail.
"We felt indie labels have been buffeted in the distribution and promotion areas, and that a merger could work well for both of us," MP owner Tony Moreno said.
MP was at one point distributed via Sony BMG but had been self-distributed in the past two years, a fact that hindered its entry into mass merchant accounts. J&N has a distribution agreement with Sony BMG that will now also cover MP releases.
Effective immediately, MP will be housed in J&N's Miami offices. The labels will continue to function independently of each other, with Moreno as VP of MP and Juan Hidalgo continuing as president of J&N, the label he owns with his brother, Nelson Estevez. The labels will share distribution, marketing, promotion and A&R resources, as well as revenue from record sales and publishing.
A major focal point, Moreno said, is sales of digital and mobile tracks, which J&N will soon begin to offer via its online store, MusicaLatina.com.
MP, whose roster includes Tito Rojas, Anthony Cruz and Eddie Santiago, was founded nearly 20 years ago, when salsa was in its heyday. But when salsa's popularity took a downturn, MP saw sales slip.
J&N maintained a solid foothold in the tropical market thanks to its inroads with other tropical genres, including bachata, merengue and now reggaeton -- all genres that have overpowered salsa in sales. J&N also has leveraged its catalog with several compilations like the "Hits" series, which includes "Salsahits" and "Merenhits."
The merger is widely viewed as beneficial to both parties.
"They are two complementing labels," said Eddie Fernandez, senior VP of Universal Music Publishing Latin America. "Tropical music is not buoyant right now, but it's a market that exists and has its audience."
Reuters/Billboard
