I’m regularly at several of the world’s most important music conferences over the years, from the MIDEM (Cannes) and Popkomm (Berlin) at Canadian Music Week (Toronto). These have not only a great opportunity to meet and do business with companies in the major Western markets, they also get a real perspective on the specific challenges and opportunities in these markets. So it was with pretty excited that I on my way to Hong Kong for my first trip to Asia, and the fourth Edition of Music Matters at the Grand Hyatt from June 2-4 (http://www. Music Matters. Asia). From the outset it was clear that Music Matters is a very different feel from most other conferences, more of what I call a “family matter” would. Unlike other conferences, which offer a variety of simultaneous, often lightly attended, Music Matters is a single program by all the delegates followed. The message is clear: If you want to understand the Asian market, here’s the information you need. And while the other participating conferences are available to facilitate scheduling meetings in advance, Music Matters takes a completely opposite approach. “We have a free-flowing networking event, where everyone has access to all other in an open format you want,” said Stan Ruza Commercial Director. Although I initially skeptical that this would work, was, it ended in it about a beautiful and productive changes, especially for someone to build a broad base of contacts in Asia. I have so many contacts as I have from other conferences, although she was much smaller – mostly of leaders composed of all major Asian markets from Tokyo to Mumbai, Sydney to Kuala Lumpur. Japanese NirvanaWhile I learned a lot about the Asian market in these two days, was the surprising “revelation” is actually a question: When will the Japanese music market in the U.S., the # 1 position excel? More shocking were the estimates range from 5-10 years. So what exactly happened to justify this doomsday scenario (at least from the USA)? It’s simple: the Japanese love the music, and still more than willing to pay for it, no matter whether old or young. Kei Ishizaka, CEO & Chairman of Universal Music Japan and RIAJ LLC (Recording Industry Association of Japan) will present some facts chairman in his opening speech, “New Strategies & Opportunities in Japan” that some in the West could make red with envy: * Digital Sales in Japan increased from 7th 5% in 2005 to 20% in 2008 * Mobile is the driver, accounting for 89% of digital sales in 2008 * Note that this is a slight decrease of 94% in 2005 credited iTunes Japan, which for 50% of online sales is * Japan is the only digital music market, where sales are made to account for losses in physical sales – that is, until 2008, to when the mechanical losses exceeded the growth of digital distribution * Consumers Japanese music will appear relatively inelastic, with a willingness to pay the highest prices for each country for music: up to $ 4/ringtone and $ 30 + / CD-Album * The Japanese music industry is still a hit-driven onePerhaps most importantly, did not the Japanese music industry’s most profitable customers : given up on the 40th The dirty little secret in the U.S. is that after Soundscan, CD sales are faster among the more than 40, largely fallen out of neglect by labels focused on the youth market. The Japanese music industry on the other, have consciously developed products for the over 40 demographic, the (i) do not download music and (ii) are willing to spend much money ($ 30 +) for high-quality CD (pay ie music, packaging …). This is not to say that Japan is a complete musical nirvana: more music was about illegal funds (407 million tracks purchased), as a legal (329 million tracks) on mobile platforms. In 2006, the RIAJ sent over 220,000 takedown notices, and has since filed criminal charges against mobile BBS (Bulletin Board System) Web site operators. But despite these challenges, the Japanese market is growing non-stop, with the exception of 2008 when a measly 3% decline in sales, the record is not generally regarded as a trend for the coming years. Get Me a piece of that pie! At this point you are probably trying to develop ways to a piece of cake Asian grave. Think again! You’re still likely to get it to earn in the U.S. or Europe than any Yens or yuans make. Just like the Great Wall of China, the Asian market is almost insurmountable challenges, even for the experienced western artists. First, the Asian market is completely dominated by local repertoire. Japan is actually one of the more accessible markets, with international accounting standards repertoire for more than 20%, although this declined in the past few years. Look outside of Japan and the numbers are downright depressing. Join the fastest growing markets such as Malaysia, Indonesia, India and China, and local repertoire accounts for nearly 99% of the total cost. Simply put, Asians want music that they relate to culturally / linguistically and can comfortable with. Of course there are hip hop, pop, rock and all of Asia, but it’s all sung in their native language, culture and its nuances. This is in stark contrast to the West, where English is to be for all intents and purposes, a need for an international star, no matter whether you as Shakira, Bjork, or the Scorpions. In addition, Asia has no long-tail effect. It is still a hit-driven market, which tends to play against foreign acts. The general consensus among the speakers and participants seem to be that the Asian consumer just too busy to have to go hunting for new music to listen to podcasts or endlessly surfing social media sites. As such, the Asian consumer much more ‘captive’ recommendations and editorial procedure than the U.S. say, where we have a proud tradition’m diving for the rare LP – was not the old Napster and today’s MySpace just the digital form of these art form? The fact that mobile music consumption as drives to the net the other hand, has a part to play in this as well. For the same reason, all-you-can-eat subscription services are not in competition with iTunes, such as to gain a sufficient customer base despite the markets’ size. But let us say, for argument’s sake that you develop a to do some form of recognition in an Asian market. How do you expect to make money to generate from it? You have all heard of the scourge of piracy in Asia, I will not warm up the topic. Let me just leave you with this fact by Google China’s Bin Lin: the 7000 + music services in China, only 0th 1% of their offers are legal downloads. Licensing is is not much. In contrast to North America and Europe, where Performing Rights Organizations (PROs) have a long history, are Collection Agencies relatively young and in Asia to get even a grip on the digital market. As a result, there is much mistrust between publishers and public research institutions, Takes significantly impeded licensing opportunities. to the Indian market, for example, where 70% of the music consists of soundtrack (courtesy of Bollywood), music labels were as collecting all relevant rights until recently. Even the mature Japanese market has its eccentricities, such songs will be available for free sync licenses for commercial purposes up to a year after its publication. consequence of success in the Japanese market may also synchronize on the willingness rights for commercial use to dispense, from which an important way to break a song, said Kimitaka Kato, Managing Director Universal International. Are You? Depressive open yet, I’m not, my recommendation is also in the Far East, when the Wild West: full of opportunity for those who are patience and the courage to tough it out. The first lesson is that you no one, unless you’re here. So I made the trip to Music Matters, and then to Beijing, where I have a successful music pioneer, Kenny Bloom. Bloom, who was kindly referred by NARIP’s (National Association of Record Industry Professionals), Tess Taylor, China seemed on 20 years start to Warner Music. He now runs Mogo (www. MoGo. Com. Cn), one of the coolest video sites in China to serve the young, hip (undeserved) Chinese urban youth. So, why is he still in China with all that I mentioned earlier? (I) China has the largest Internet population (about 300 million, ie, the entire U.S. population) (ii) Approximately 80% of Chinese Internet users music consumers (240 million) ( iii) The music was the # 2 search term for the last three years (iv) The volume of 50 billion U.S. dollars, China is now the second largest advertising market (it recently surpassed Japan for the # 2 position) He also has a different take on the Chinese consumers. According to Bloom, it is not so much that the Chinese employed or work harder, but that they are an underdeveloped market in Media. Media in China (TV, radio and in part on the Internet) is directly or indirectly by the Communist government. As The Economist recently noted, “the dissemination of programs, media, information and entertainment offers unlimited possibilities for the [Chinese Communist] Party to convey their message to get instigated by commercial operators.” One consequence of this is the cleanup the media to appeal to a national audience that the rural farmers as well include such as city residents. It is a process not unlike our over-conglomeratized radio or broadcast television markets through competition more original and niche programming on cable, satellite and the internet suffers. The advantage is that these unique opportunities to the growing urban chique class that the central media market is presented unable to serve in satisfaction; a segment Bloom estimates to 40 million and growing. Serving these high-value segment with high-quality, original video programming, is in a position to Mogo big-name brands such as Converse, that place a premium on attracting this demographic. In a way, Mogo is trying to do for China today MTV was in the U.S. is seen in the 80′s. Another company, based in Beijing Yobo Music (www. Yobo. Com), a recommendation and Location for the music. Its founder Allen Guo was perhaps the most eloquent at Music Matters to offer on the need for Chinese consumers a variety of models and services, to experience the improvement of their music. Only by meeting the various needs of different segments of consumers – like the Japanese music market is so successful – done are alternatives to piracy to be sustainable. Future revenues will be driven by value-added music services, rather than simply downloads or ringtones piracy. And while the advertising can be a cure-all seem to many in the U.S. and China (I have mentioned, they are the two largest advertising markets) put Allen had some success by Yobo music with other revenue models such as micro-payments, and music gifting. The Silver LiningIn At the end of the Wild West was tamed and I think the same will happen with China. America in its first 50 years was home to pirates (ie, pirates) and some of the worst copyright / patent infringers of the time. This is part of what lead to the growth of young, scrappy Republic. But so mature, and even was started by a creator / innovator, America, increasing emphasis on protection of copyright / Patents held. The same is also for China. As Bloom states: “As you do not expect a people who had no concept of private property to understand 10 years ago, let alone value, something like copyright?” In other words, not copyright only was a foreign word, it would be counterproductive to the development of the country. But as it begins to more cultural goods export and the development of new patents, this trend will be as safe as it has in the U.S. to turn back. The question is only if it the genie back in the bottle when the time comes. I was just in Beijing come to the 20th anniversary of the Tiananmen incident. Sure enough, I could not on Twitter or YouTube, and any reporting on foreign TV channels , as reported BBC blocked by a blank screen. After the Communist Party determined that the copyright worthy, the conservation efforts, I would not give for the 7,000 so-called music services hardly a chance.
