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As a movement, reggaeton has been bubbling under the surface for at least 10 years in Puerto Rico. There, artists have been recording and selling their albums independently, with little radio or media support until last year.

But during the past 12 months, the genre -- a blend of dancehall, tropical and hip-hop elements -- has single-handedly shaken up radio in the United States, reinvigorated sales of Latin music and crossed over into the mainstream. In addition, labels across the board are vying to sign and develop new talent, anticipating even further growth for the genre.

"It has served as a much-needed adrenaline shot for the business by expanding the consumer base," says Jose Behar, president/CEO of Univision Music Group. "We had lost the tropical consumer, and it had boiled down to pop and regional Mexican. It's exciting to see young consumers flocking to retail."

Univision is one of many labels that is expanding its urban division to accommodate a growing roster of acts that fall under not just reggaeton, but also Latin hip-hop and urban regional music.

BOARDING THE BANDWAGON

That growth has accelerated exponentially as the radio landscape changes, with 17 U.S. stations -- including former English-language outlets -- having switched to rhythmic Latin formats with reggaeton-dominated playlists.

During the past six months, in any given week, three to five of the top 10 titles on the Billboard Top Latin Albums chart have been reggaeton.

"The genre is in the zenith of its explosion," says Jesus Lopez, chairman of Universal Music Latin America/Iberian Peninsula, adding that the movement is not limited to the United States. "It is now awakening interest in the rest of the world."

Universal was the first major to express an interest in reggaeton, signing a licensing deal in 2002 with Puerto Rico-based Nightman Records. Universal's drive to discover new talent continues.

When sales of tropical music, a Universal stronghold, began declining in recent years, the company turned to Puerto Rico to explore up-and-coming music trends.

Lopez had seen the possibilities of reggaeton with Panamanian rapper El General, a pioneer in the genre who sold several million albums by the late 1990s.

Many reggaeton stars (including Yankee, Don Omar and Luny Tunes) are distributed or promoted and marketed via some kind of agreement with Universal. But in the past year the company also has focused on developing its own artists. In addition, earlier this year, Universal created the Machete Music label, which is dedicated to all styles of Latin urban music.

GOING SOLO

A key change in the business, Machete president Gustavo Lopez says, is the recent emergence of artists' solo albums, as opposed to the multi-artist compilations that had dominated the reggaeton marketplace.

"Compilations are a mainstay of the business," notes Lopez, who reports to Jesus Lopez (no relation). "But now you're seeing the artists from these compilations coming out" on their own.

Many of these acts -- Hector "El Bambino," Wisin & Yandel, Angel & Khriz -- are Puerto Rican.

But now, Lopez says, "we're seeing U.S.-based acts as well. I think now with the radio stations opening up their doors, the markets can develop their own product and they're not so dependent on getting reggaeton product from Puerto Rico. I think we'll start to see stations supporting some reggaeton from Panama (and) Mexico."

"The next stage is, we're going to have to break an artist, and that will be the real start of the reggaeton movement," Urban Box Office CEO Adam Kidron says. Created only 18 months ago, UBO has become a strategic player in the reggaeton realm, thanks to a series of low-priced and strategically marketed CDs, including the documentary CD/DVD "Chosen Few."

"The idea is to create living Latin music that has a growing population and a natural audience in the United States," says Kidron, whose UBO is self-distributed.

OPPORTUNITIES UNFOLDING

The willingness to sign and develop acts, not merely license or distribute them, opens up possibilities for new talent, who as recently as one year ago would have had to do things themselves.

"Our strategy is about artist development first and foremost," Sony BMG Norte president Kevin Lawrie says. "It's generally not about purchasing someone else's talent."

UBO's Kidron is banking on new reggaeton artists who are still "under the radar." They can more easily reach a bigger audience, he believes, because they are bilingual.

"The assumption is that the current artists are the ones that are going to be successful, and that is not correct at all," Kidron says.

Sony BMG has a joint-venture deal with Puerto Rican indie White Lion that originated before the Sony-BMG merger. Although the label will continue to promote artists who fall under that agreement, it is also seeking new acts. (Acts that have been signed so far include Alexis & Fido and MRP.)

Another new joint venture is Wu-Tang Latino, created by label president Ray Acosta, formerly with UBO, and Wu-Tang Records.

Wu-Tang Latino's first release will be the compilation "Wu-Tang Latino: Quemando el Genero," due before year's end. It will feature Wu-Tang Latino's current acts -- including Los Yo Yai -- who all hail from Puerto Rico or the United States and play a mix of styles within reggaeton.

"Reggaeton is coming from all over the world, and people are adding their own sound to it. So radio will have to adapt. It will change," Acosta predicts.

And as much as reggaeton is influencing Latin pop and other music, executives are confident that it will not displace other styles.

In fact, since "Barrio Fino," no other reggaeton album has made it to No. 1 on the Billboard Top Latin Albums chart. At least for now.

Reuters/Billboard