Global Interaction Perspective

We have focused on the United States for two reasons. The United States has always had a good economy allowing for consumers to enjoy the luxury of buying recorded music. Another reason is for the simple fact that the English language has always been the leading language in the entertainment industry from film to TV to music. For these reasons, following the trend within the United States can also give us substantial insight into foreign markets. Yet the international music market has always run in concurrence with American music in other nations. Only recently have we seen an expansion of the foreign music market WITHIN the United States. For example, the Latin music market has seen an upward trend in growth in the past couple of years. The Recording Industry of America (RIAA) lists two reasons for this upward growth in market share, units shipped, and revenues since mid 1998. The first is an incredible product diversity in their inventory ranging from Salsa to Cuban Jazz to Rock en Espanol. The second reason is the "sophisticated marketing and distribution techniques employed by Hispanic labels and retailers to reach a growing number of non-Hispanic customers." CD shipments of Hispanic music increased by 26% from 20.8 million CDs in 1996 to 26.3 million in 1997.

Both Universal Music Group and EMI have foreseen the value of the Latin market. In Brazil, for example, over 70% of all music sold is of Brazilian origin. This high level of domestic repertive provided an opportunity for entry into a new, powerful, and untouched market. EMI and Universal took this lead in the early 90's and are still dominant distributors and labels in the country.