Curacao/MusicNet deal aims to boost digital sales

By Leila Cobo

MIAMI (Billboard) - It's no secret that U.S. Latins use the Internet less than other segments of the population. And it's no secret that digital sales of Latin music lag way behind the physical.

According to a study the Pew Hispanic Center released earlier this year, only 56 percent of U.S. Latinos use the Internet, far less than the 71 percent of non-Hispanic whites and 60 percent of non-Hispanic blacks who do so.

This may partly account for the lag in digital sales of Latin music. According to Nielsen SoundScan, less than 1 percent of all digital albums sold so far this year were Latin. In contrast, Latin music accounted for 7 percent of all albums sold.

A new alliance between Hispanic retailer La Curacao and content provider MusicNet will address both problems simultaneously, promoting online sales of Latin music and sales of media players and computers to Latin buyers.

Under the Curacao/MusicNet partnership, slated to go into effect by December, MusicNet will provide content for Pasito Tunes, a Hispanic-focused digital music service. Pasito will offer a music subscription service and a download store, both accessible on computers and portable media players. Pasito will have access to MusicNet's 4.5 million tracks but will appeal to Hispanic buyers with its own editorial voice.

This marks MusicNet's first partnership with a Latin retailer. But what makes the enterprise stand out is its promotion and marketing at the retail level.

IN-STORE INSTRUCTION

La Curacao, a chain of eight large department stores in California and Arizona (three more will open in the next nine months), caters to some 9 million customers per year and is best known for electronics. Approximately 1 million consumers hold Curacao credit cards.

When Pasito Tunes launches, all La Curacao stores will feature Internet pavilions where staff will instruct costumers on how to use the service.

Customers who do not have media players or computers will have the option to buy them at a discount price together with a Pasito subscription service.

"We'll be able to capitalize on foot traffic to subscribe people to the service," said Reuven Hayun, sales and marketing manager for La Curacao's business development group. "It's going to enhance my profit margin because I can sell bundles of media players and subscriptions. What we're doing is putting the hardware and the software together. And everything is bilingual and very easy to understand."

The Curacao model will not allow for in-store CD-burning, partly because the stores already sell CDs. If a buyer doesn't have a major credit card or Internet access but does have a laptop computer, the buyer can pay cash and download the tracks in-store.

This isn't MusicNet's first partnership with a retailer. But MusicNet Digital president/CEO Alan McGlade said the one with La Curacao is unique because "they will actually help educate the consumer and help them get started."

That may well be one of the missing links in pushing along digital sales of Latin music. And in launching Pasito, Curacao is, of course, hoping to make a profit. But it's also recognizing that Latin consumers want to get savvy about new media -- even if they face economic constraints.

Reuters/Billboard