Artists working with record labels in Latin America have a higher percentage of monthly listeners and generate more revenue on digital platforms than those who are self-released, according to a new report by Worldwide Independent Network (WIN) and the Latin American Independent Music Observatory (OLMI) on digital distribution in the region.
The report also shows that “the existence of local infrastructure (such as digital distributors) is related to higher levels of professionalization, income and knowledge of the digital value chain by artists, for example in relation to the types of existing contracts and the terms offered.”
Released on Tuesday (April 8), the study — which was conducted between 2023 and 2024 — analyzes the situation in eight countries, including Chile, Costa Rica, Ecuador and Paraguay, and highlights how artists’ presence on digital platforms and affiliation with independent record labels positively influences their economic sustainability.
“These results reinforce the notion that the structural and financial support that labels provide to artists is key to their success in the music ecosystem,” Noemí Planas, CEO of WIN, said in a press release. “Public and private investment to promote a professional music infrastructure in the region is key to ensure the growth of all players.”
One of the challenges the music industry faces in the region is the “heavy reliance on live performances,” the report states. That’s because “although more than 60% of artists generate income through streaming, less than 10% earn more than US$5,000 per year,” it notes. The report adds that “artists with more than 500 monthly listeners barely represent 30% [of artists]” — meaning a large majority may be affected by the recent royalty payment reforms introduced by the major streaming platforms that contemplate the demonetization of content below certain thresholds of streams and listeners.
The study found that almost a third (32.2%) of respondents market their music through distributors that have recently integrated — or are in the process of integrating — with majors, denoting a trend towards market consolidation.
“Consolidation in the music sphere is concerning because of its impact on the dissemination of Latin American independent music, especially in the digital market, where we see that there are fewer and fewer independent operators,” Planas adds. “The concentration of power, information and access channels in the hands of three large multinationals translates into worse conditions for independents, such as streaming models that demonetize their content and that they have no choice but to accept.”
The report highlights the importance of strengthening the relationship with record labels and investing in the education of key players. “[It] reaffirms the need to consolidate a professional, informed and collaborative ecosystem in Latin America,” Cristóbal Dañobeitia, director of OLMI, said in a statement. “The union between key players and investment in education, research and technology are essential to ensure equitable and sustainable growth.”
Titled “La Música Independiente en Latinoamérica: Cadena de Valor y Distribución Digital” (“Independent Music in Latin America: Value Chain and Digital Distribution”), the study was commissioned by WIN and developed by an interdisciplinary team of experts from OLMI, in collaboration with trade associations ABMI, IMICHILE and AMI PY, as well as AMPROFON, Sociedad Chilena de Autores e Intérpretes Musicales (SCD), Alianza Francesa Costa Rica and Universidad de los Andes.
To access the full report (in Spanish) click here.
