Latin indie label undergoes digital conversion

By Leila Cobo

MIAMI (Billboard) - Musicalatina.com, the only Latin-owned, Latin-centric U.S. digital download store, launched in December.

The site is the brainchild of Juan Hidalgo, founder/co-owner of respected independent tropical label and distributor J&N in Miami. Hidalgo saw his retail sales decline with the onset of the digital revolution. In response, five years ago he purchased the domain name Musicalatina.com and began his plans for a digital download store.

Musica Latina carries music from all major labels, plus a wide array of independent labels. All of its downloads are free of digital rights management restrictions.

As a label owner, Hidalgo is an unlikely digital retail entrepreneur. But he said the move makes sense in light of the decline in J&N's physical sales while digital sales have increased steadily.

"That's what's really given me the incentive to go toward a digital venture," Hidalgo said. He will continue to operate J&N Records, whose current roster of 12 recording artists is down from about 30 in mid-2007 and includes bachata stars Monchy & Alexandra. "If you want to stay in the music industry, this is the future."

Musica Latina will sell tracks from all genres but will showcase mostly Latin acts and other performers who have broad Latin appeal, such as Britney Spears and Kanye West. The store charges 99 cents for single-track downloads and $9.99 for most digital albums, although Hidalgo said that some tracks and albums will likely soon be available for less, beginning with titles from the J&N catalog.

The digital store initially will operate only in the United States, but Hidalgo expects to start separate Mexican and Venezuelan sites in early 2009.

iTunes Latino, part of Apple's iTunes Store, dominates the U.S. Latin market for digital downloads. Although several Latin-oriented digital stores have emerged in the United States in the past few years, none have gained significant traction. In August, MisRolas.com, which specialized in indie Latin music, shuttered its digital store to concentrate on its mobile business.

Although digital downloads have accounted for a small portion of total Latin music sales, the market's potential continues to attract interest from big players. In October, Univision Communications partnered with Microsoft's Zune music service to launch a music download store at Univision.com.

Competing against iTunes won't be easy, but Musica Latina has one ace up its sleeve: its catch-all name, which Hidalgo said is already generating an average of 150,000 to 200,000 visits per month to Musicalatina.com from Web surfers looking for Latin music.

Hidalgo said J&N also plans to keep operating its distribution company and its two online stores, JNRecords.com and MPrecords.com, which sell only physical product. Over the long term, Hidalgo admitted, the CDs they sell will play a much smaller role in the business.

"Physical albums, regardless of how much we like them," he said, "will eventually become a boutique item."

Reuters/Billboard