He has sold more than 60 million records worldwide, topped the charts in 60 countries and has been named one of the most beautiful people in the world. Now the Puerto Rican pop star Ricky Martin, best known for the 1999 single 'Livin' La Vida Loca', has made headlines for an entirely different reason: he has finally admitted that he is gay. "I am proud to say that I am a fortunate homosexual man. I am very blessed to be who I am," he wrote in a lengthy open letter to fans on his website. He explained that the fear of ruining his career prevented him from revealing the truth earlier. "Allowing myself to be seduced by fear and insecurity became a self-fulfilling prophecy of sabotage."

For the majority of pop fans and celeb-watchers, Martin's statement will hardly come as a shock. His sexuality has been one of the worst-kept secrets in the music industry for years. But there is more to this than the simple tale of a man finally setting aside his fears and coming out of the closet. The message that Martin's story imparts is that homosexuality is a career-killer when it comes to pop music – that it is more acceptable in the 21st century to be a drug addict like Amy Winehouse than it is to be gay.

Should we be surprised? This is the record business we're talking about after all – an industry that in the last 50 years has stood for liberalism and equality. Not according to Matthew Todd, editor of the gay lifestyle magazine Attitude. "The record industry itself is pretty pro-gay, but the outlets that support it, particularly radio and TV, are not," he says. "Ricky Martin's main market is America, and there the radio and TV stations wield a huge amount of power. Just look at what happened to [American Idol winner] Adam Lambert after he kissed a man on stage at the American Music Awards. He was kicked off all the TV shows he was due to appear on, and was replaced by Chris Brown, the man that famously beat up Rihanna."

Even so, the record industry has a lot to answer for in refusing to get behind gay artists. We all know that a mainstream artist's appeal can rest as much on their attractiveness as their ability to sing in tune. In the realms of chart-friendly pop, homosexuality has proved a particular thorn in the side for music executives. Artists such as Ricky Martin are primed for their sex appeal to a generation of teenage girls – tell them their idol is gay and the myth is ruined.

But the record industry has long underestimated the loyalty and intelligence of music fans. When the late Stephen Gately of Boyzone announced he was gay in 1999, fans were expected to throw their hands up in horror. In fact, they rallied round in support. The same went for Will Young, who came out to fans shortly after winning Pop Idol. Eight years later Young has had nine top 10 singles and has been nominated for 10 Brit Awards – hardly the achievements of a man who is loathed for his sexuality. More recently, when Mark Feehily from Westlife came out of the closet, few even noticed.

As for Martin, his career has been on a downward slide for some time, a fact that has less to do with his sexuality than that his music has gone out of fashion. He has also put his music career on hold recently to concentrate on fatherhood – in 2008, he became the father of twin boys, Matteo and Valentino (left), who were born to a surrogate mother. So he has had plenty of chances to come out over the years, and has chosen not to.

The veteran interviewer Barbara Walters famously gave him a grilling about his sexuality in 2000, asking him what Gloria Estefan had meant when she told him to "enjoy your sexuality". Martin refused to be drawn.

Todd believes that the star's decision to keep his sexuality to himself for all this time is sad, but ultimately understandable. "There are still a huge number of gay men who are troubled about their sexuality," he says. "There's so much homophobia out there that it's easy to feel ashamed. In the case of Ricky Martin, on the one hand his reluctance to come out doesn't send out a great message, but, on the other, if he'd come out, would he have got the breaks he had? You have to wonder: why did he take so long?"

The Stars who came out

Elton John: Coming out made little difference. He is still hugely popular.

Will Young: After winning Pop Idol in 2002, he came out. Since then he has released four albums and has been nominated for 10 Brit Awards.

Stephen Gately: As a member of Boyzone, he racked up 16 consecutive top-five singles. He came out in 1999, and his solo album New Beginning reached the top of the charts.

George Michael: One of the biggest pop stars in the world, both as a member of Wham! and as a solo artist, he came out in 1998. He still enjoys global success.