Latin Fever Emerging genres begin to make headway in growing Latin
American markets

Latin Fever Emerging genres begin to make
headway in growing Latin American markets
Author: Dave Brooks
Date: September 1, 2006

When it comes to booking concerts in Costa Rica,
regional promoter Marco Carvajal offers every booking agent, talent
buyer and touring manager the same advice regarding the local
ticketbuyer – “stick to what they know.”

Fan awareness operates much differently in most
of Latin America, with regional tastes still outpacing North
American talents. The growth of mass media, especially the
internet, is raising South and Central American interest in
state-side rock bands, but increasing concert costs, marked by an
economic downtown in some southern countries like Colombia,
Venezuela and Brazil means weakened local currencies and less
consumer spending money for expensive American shows.

So when Carvajal wants to fill the country's
largest stadium, the 23,000-seat Deportivo Saprissa, San Jose, he
goes with the lowest-risk proposition.

“You always do well with musica reggaeton,” he
said of the emerging Latin dance trend that has been selling seats
with acts like Don Omar and Daddy Yankee. Carvajal said he can book
a top talent reggaeton concert at a 20,000-plus venue (the country
only has four) for about $200,000 in guarantees, and many of the
acts are helping produce the shows and offset some production
costs.

“It's a business like any other and I think a
lot of these acts realize that the reggaeton market is in its
infant phase and still growing. Artists like Daddy Yankee are
bringing new demographics out for live music and they realize that
their fan base still needs to be developed over time,” he said.

That new demographic is 15-to-25-year-old women,
a new market in the Latin American concert economy. As for U.S.
acts, Carvajal said he has regular contacts with a few American
producers, like Feld Entertainment, which books its Disney on Ice
units in Latin America. “Family shows always do well, even
ice-related events, which is kind of ironic since we have very
little ice hockey or competitive ice skating in Central America,”
he joked.

Carvajal said rock bands from the 1970s and
1980s also seem to do okay. Veteran rockers Scorpion stopped in
Costa Rica this year and did quite well although Carvajal couldn't
provide any concrete numbers. He said he believed the success came
from the band's longevity, adding that it takes a long time for
groups to break into the country's collective psyche in a way that
is going to translate into ticket sales – and offer a reasonable
rate of return for the promoter.

Booking Latin American dates “takes a lot of
creativity,” said Alex Ross of Supreme Entertainment which books
for groups Color Me Badd and Jordan Knight. “First off, you have to
realize that no promoter is going to want to spend a lot of money,
so you can't come at them with an unreasonable offer. It just won't
fly.”

Ross said he recoups some of his costs through
lower hospitality rates for hotels, local transport and production
staffing, although airfare costs can diminish any savings one might
achieve through capitalizing on third-world pricing.

“Plus there are other things you have to account
for, like added security. It just seems unpredictable, you could
have all the logistics set in place, and then you receive zero
media support and the show makes no money. I'm still waiting for
someone else to figure it out,” he said.

Most Latin American promoters said they're still
studying how to capitalize on American talent without spending a
ton. “I would definitely say we're much more risk-averse than
American promoters,” said Janet Vallef, who handles promotions for
Venezuelan promoter Water Brother, adding that is very difficult to
get traditional financing for the events industry. “No one wants to
take the risks, which means no one can afford to bring in Fall Out
Boy and take a possible loss. But the result is that fans aren't
getting exposed to big groups and they're just not coming down
here. That's the price of safety.”

Low consumer spending power isn't the only
prohibitive obstacle blocking live events. Transportation hassles
make most tours air-reliant. Besides poorly kept dirt roads in
rural regions and concerns with banditry, some areas are just
virtually impossible to traverse on a tour bus. The most famous of
the impassible regions is the dense jungle connecting Central and
South America and the border of Panama and Colombia. Known as
Darrian Gap, the area is a jungle of wild animals, disease and
separatist guerilla fighters.

“Latin America is definitely an airfare market,”
Carvajal said. That limits touring possibilities to major Latin
American cities: Guatemala City, San Jose, Panama City,
Bogotá, Sao Paulo, Rio de Janeiro, Buenos Aires and
Santiago.

The barriers to entry in Latin America can be
frightening to the most road-savvy tour manager, but there are a
few regional stops that are beginning to strongly appeal to
promoters. The Coliseo De Puerto Rico, San Juan, and Arena
Monterrey (Mexico) are beginning to attract a number of top
American talents and have successfully integrated themselves into
American tours.

“This has become a must play if you're a Latin
act of any type,” said Dale Adams, general manager of the Coliseo
De Puerto Rico for SMG. The Coliseo is enjoying a banner 2006,
pulling in $1.8 million for nine shows in June.

“Any Latin artist that is going to tour is going
to hit Puerto Rico, it's a must play because it's so much nicer and
larger than others,” Adams said. He estimated the venue garners an
average of $25 more per ticket than most shows in the states.

The newly built Arena Monterrey, one of the only
facilities of its kind in Mexico, is also enjoying a record year,
selling out traditional rock groups like Motley Crew, Black Eyed
Peas and Depeche Mode, along with Latin staple Juan Miguel. Alberto
Familiar, general manager at Arena Monterrey, said the arena
currently has 10 shows on sale. Familiar estimates the facility
books about 150 shows per year.

So why do Puerto Rico and Mexico do so much
better than their Latin American counterparts? Well, the most
obvious reason Adams pointed out, is the two countries' proximity,
and interconnectedness with the United States.

“Many Puerto Ricans were educated in the United
States and have family members who live in the states, so there is
definitely a connection and a pretty strong knowledge of American
music,” Adams said. Plus, geographically, it's much easier to get
transportation over to San Juan than it is to Sao Paulo. And with
Puerto Rico being a territory of the United States, there are no
customs hassles to deal with.

Still, booking a concert is not without its
hurdles. Local law bans Coliseo de Puerto Rico, SMG or any other
American entity from promoting shows – booking agents must go
through one of the island's local promoters like Jose Duano, Angelo
Medina or Tony Mojena. Many other Latin American countries have
similar rules, and it's not uncommon for booking agents to hire an
intermediary to deal with regional promoters. And unlike Arena
Monterrey, which is connected to the United States by an interstate
highway, large shipments can only be moved to Puerto Rico via
sea-transport and that can take two days, making a one-off to the
island a five-day affair.

So while logistical concerns still plague the
tiny island, Adams said most Puerto Ricans possess one popular
characteristic that artists can't ignore -disposable income.

“Puerto Rico is home to the top-selling
Wal-mart, Kmart and Target stores in the world,” Adams said. “Each
month, 11,000 brand new cars are sold on the island. You have four
million people here and they are spending a lot on
entertainment.”

The island is also spawning development growth
including a 580,000- square-foot convention center also managed by
SMG, as well as a swath of new hotel projects and a new bullet
train, mass-transit system.

“In the past, Puerto Rico was the quiet
alternative because we didn't have the convention center, or the
hotel rooms, and we just weren't on people's radar,” Adams
said.

For Monterrey, costs are still a prohibitive
issue. Any show costing over $300,000 is going to require corporate
sponsorship and help from the local government, Familiar said,
which could mean waivers on permit fees and expedited help getting
the correct licenses for a show. Concessions are also a big part of
their business, although Familiar pointed out there is a set price
point for what concertgoers will pay. Anything over $3 per beer and
$1 per hot dog will be a tough sell, he said.

Costa Rica could definitely use some of that
government relief, Carvajal noted. Concerts usually require 20
different letters of approval from government officials, and most
typically need to be stamped and notarized. “You need to get
permits from the health department, permits from immigration and
local organizations that collect taxes,” he said.

And while there are no production unions in most
South and Central American venues, high taxes are the number one
complaint of promoters trying to protect their bottom line,
Carvajal said. In Costa Rica, 25% of the gross ticket sales go to
the government.

And for those big-ticket artists who do make it
down to South America, groups like U2 and the Rolling Stones who
both toured the region this year, merchandising sales are often
significantly less. Carvajal said expect a 25-to-30% drop compared
with the United States. Low spending power, coupled with unchecked
competition from counterfeit merchandisers, makes it difficult to
sell a $30 T-shirt.

“And we just can't make up that difference for
the artists with ticket prices,” he said. “Plus Latin acts usually
have far less requirements and typically more media awareness and
exposure – not to mention lower prices. In general, we prefer Latin
artists for that reason.”

Interviewed for this article: Marco Carvajal,
(506) 87 771 04; Janet Vallef, (58) 212 941 6623; Alex Ross, (617)
782-7179; Dale Adams, (787) 625-6831; Alberto Familiar (81) 8126
2100