Rampant Piracy Threatens to Silence Latin Music Industry
A vast underground market in Mexico is forcing labels to cut acts and retailers to close.

By Marla Dickerson, Times Staff Writer

MEXICO CITY — They have been compared to the Rolling Stones for their longevity and legions of loyal fans. They've sold tens of millions of albums in Latin America. Now the seminal Mexican rock group El Tri is getting dumped by its record label. The reason: Bootleggers are the only ones profiting.

Piracy is so rife in Mexico that the vast majority of the band's album sales are illegal CDs peddled on the street. So although most anyone over the age of 13 knows the words to "Que Viva El Rock and Roll," El Tri and its label, a division of Warner Music Group, rarely see a peso from those recordings.

"If we play somewhere on a Friday night … by Monday it will be [for sale] in the subway," said Alex Lora, the gravel-voiced front man for El Tri. "It is becoming a way of life."

El Tri may be among the first big Mexican acts to lose a contract to piracy, but it may not be the last. Entertainment bootlegging is sweeping the globe, but nowhere has the landscape changed more quickly than in Mexico. An estimated six out of every 10 CDs sold are believed to be bootlegs, vaulting Mexico to the No. 3 spot worldwide, behind China and Russia.

But unlike those nations, Mexico has a long-established commercial industry that is getting pummeled in the process.

Music retailers are closing their doors, as sales last year plunged to $347 million, down 25% from 2002, dropping Mexico out of the world's top 10 music markets for the first time in years. Recording industry employment has fallen by nearly half since 2000, and the government is losing more than $100 million annually in tax revenue.

Labels are culling their rosters of established acts and signing fewer new ones. Pirates have robbed musicians of so many sales that the Mexican industry last year slashed the standard for granting gold records by one-third to just 50,000 copies — one-tenth of the U.S. threshold.

"It's an economic crisis" for the industry, said Fernando Hernandez, director of the Mexican Assn. of Phonogram and Videogram Producers, known as Amprofon...