Impact of Covid-19 on music: the view from Latin America

This overview was first presented by WIN’s Network Development Director, Noemí Planas, at Sandbox Summit Global on Monday, September 21.

In recent months, we have often heard that music was one of the first sectors most affected by Covid and will be one of the last to recover from it. This is especially true for Latin America.

The region’s GDP had been growing at a slow pace since long before the pandemic, but is now likely to suffer a 10-year setback. Countries like Chile were already crippled by last year’s social unrest and were only beginning to recover when the virus hit.

Several LatAm territories are experiencing the longest quarantines in the world, with full lockdowns through July. At the time of recording, live concerts are not yet allowed in Mexico or Colombia, apart from some sporadic drive-ins. In other territories, they are, but with heavy restrictions that make them financially unviable. Uruguay is one of the few examples that managed to control the pandemic and was able to allow the return of a gradual normalization of activities in June.

Impact and challenges

The impact on the music industry is being felt more intensely here than in other territories. Some examples:

In Argentina, local trade association ASIAr estimates the loss of revenue of record labels at more than 50% on average. 80% of them had to postpone recordings due to the pandemic and will have to lay off 1.7 employees on average.

A survey conducted by DataSIM in March reported an impact of more than 565 million dollars and 1 million professionals affected in Brazil, with 80% of the events cancelled or postponed.

In Chile, according to the Observatorio Digital de la Música Chilena, over 90% of shows had to be suspended, an annual economic decline of more than 41% is estimated for 2020, and about 80% of music companies risk layoffs and bankruptcy in the coming months.

Despite the setbacks, the music sector has responded and delivered inspiring content that is helping us through the crisis. But it is also questioning many of its models and putting a magnifying glass on the deficiencies that we already knew, such as the structural precariousness of streaming. Many LatAm music companies relied heavily on live revenues and, without the possibility of playing shows, the digital value gap has become even more apparent.

Support and cooperation

Cultural and creative industries need support mechanisms and the development of stimulus measures, as the financial sustainability of the sector is in jeopardy. But despite calls for governments to approve specific plans, their responses have been uneven, and generally not sufficient, throughout the Latin American region.

This pandemic has reinforced the importance of the role of trade associations in raising public awareness and fighting for better conditions for music professionals. The absence of representation in key territories, such as Mexico, Colombia, and Peru, has deprived the sector of an effective dialogue with their governments. Therefore, no sector-specific plans have been approved, with culture and music being the least of their priorities.

And, where general support measures were made available, the lack of business and artist censuses, and the fact that the black economy is still huge, meant that many were unable to benefit from them. To lay the foundations for a lasting recovery, beyond the current crisis, production proximity models should be promoted, considering the small and micro-enterprises that make up the independent music industry, fostering professionalisation and capacity building. 

More than ever, international cooperation is proving essential to respond to the pandemic. And will be even more vital in the aftermath. It is crucial to guarantee the exchange of knowledge and experiences through decentralized cooperation. An example is WIN’s LatAm Network working group, where the organization’s staff, our associations in the region, and individuals in key territories, are working together to assist in associative efforts and with advocacy, by sharing helpful information and resources.

Despite all the challenges facing the Latin American region, we are confident that independents, as global players with significant transformative and convening power, will lead to a better, stronger and more inclusive reconstruction of the music industry after the pandemic.

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