Asian Digital Tastes Explored At Music Matters Confab

May 30, 2007 - Global | Digital and Mobile

By Steve McClure, Hong Kong

Asian consumers are as passionate about the digital technology they use to access and play music as they are about music itself, according to the results of a survey released May 30 at the Music Matters conference in Hong Kong.

Fifty-one percent of consumers said they would listen to music more if they owned an MP3 player or music-playing mobile phone, said Ian Stewart, MTV Networks Asia VP, research and planning, in presenting the results of a survey of just under 4,000 people between the ages of 15 and 34, and conducted in 10 Asian territories in April.

The survey, which was jointly conducted by MTV, advertising agency Branded and market-research firm Synovate (both based in Hong Kong), found that 56% of consumers had played music on a computer in the past month, while 53% had played music on an MP3 player in the past month.

But Stewart said traditional methods of music delivery should not be discounted, with digital technology living side-by-side with traditional forms of music delivery in Asian territories such as India and Indonesia, where Internet penetration is not as widespread as in other parts of the region.

Other highlights of the survey (which covered China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand) were:

* Twenty-seven percent of consumers in the region had downloaded and saved a song to their mobile phone in the past month.

* Thirty-two percent of males aged 15 to 24 said they are likely to download songs to their mobile phones -- the highest ratio for any of the demographics profiled in the survey.

* Consumers in China (39%), India (33%) and Malaysia (33%) are more likely than consumers in other countries in the region to have downloaded songs to their mobile phones.

* Seventy-one percent of Indians feel "very passionate" about music -- the highest ratio for any of the 10 territories. Meanwhile, just 27% of Hong Kong consumers -- the lowest figure among the territories covered by the survey -- feel the same way.

Music Matters – Music piracy fact sheet

30 May 2007

HONG KONG — Music piracy remains an ongoing problem in Asia according to the Branded, MTV and Synovate Music Matters survey released today at the 2007 Music Matters Asia Pacific Music Forum in Hong Kong.

In research that explores music habits and attitudes among young urban Asians, Synovate surveyed 3,857 respondents aged 15 to 34 years in China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand.

Synovate Director Media Research Asia Pacific, Craig Harvey said with the proliferation of digital technologies, music piracy continued to pose a challenge to music industry organisations in Asia.

"The Music Matters survey shows that one quarter of urban Asian consumers surveyed have downloaded and saved a song from the internet without paying for it in the past month, and 18% have used a file-sharing program to share music with others," he said.

"Consumers also appear to underestimate the extent of the piracy problem, with 47% of respondents surveyed believing that the music industry is doing a good job at protecting the intellectual property of artists."

However, Mr Harvey noted that it was not all bad news, with online music also providing new opportunities for the industry in Asia.

"On a more positive note, of the relatively healthy 14% of consumers surveyed who had paid to download music from the internet over the past month, only one fifth of these (21%) had also purchased music in a physical store, showing that the web is opening up a whole new market of music consumers across Asia," Mr Harvey added.

About music piracy

In the past month, of the young urban consumers surveyed regionally:

• 31% swapped or borrowed a music CD or mini-disc from a friend
• 34% purchased music in a physical store
• 25% downloaded and saved a song from the internet without paying for it
• 19% ripped or copied music from a CD
• 19% burned or copied music onto a CD or DVD
• 19% purchased a bootleg or counterfeit music CD
• 18% used a file sharing program to share music with others
• 14% paid to download music online
• 9% purchased a CD or mini-disc online

Asia's Digital Music Free-For-All

Demand for online and mobile music is strong in Asia, but so is piracy, and that has music executives singing the blues

by Brian Bremner - Business Week 30.05.07

Young, urban Asian consumers are among the most tech-savvy people on the planet. In a region that boasts roughly 1 billion handsets and blisteringly fast wireless networks in richer markets such as Japan, South Korea, Taiwan, and Hong Kong, Asian teens and 20-somethings are "mashing up" music and video content from every imaginable source by integrating applications from their feature-laden mobile handsets, personal computers, and the Net.

These kids love to download everything from J-Pop acts in Tokyo to Vedic heavy-metal bands out of Mumbai and New Delhi. There's just one problem: They hate to pay for it. And what should be a dynamic market for the global music industry and all manner of online and mobile music sites is turning out to be a bedeviling one. Companies are casting about for the right business model to exploit the undeniable demand for digital music in a region where pirated CDs and illicit music and file-sharing sites are ubiquitous.

Most vulnerable by far are the major music-recording labels. Legitimate physical sales of music (LPs, cassettes, CDs, DVD audio, and so on) have been falling or remaining stagnant this decade and the $29.3 billion in worldwide sales the industry raked in last year is expected to fall 61% to $18 billion by 2009, according to estimates by Soundbuzz, a Singapore-based digital music provider.

Biggest Black Market

"It's impossible to talk about the music industry without talking about the piracy that is ravaging it," bemoaned John Kennedy, head of the IFPI recording trade group at a music industry conference in Hong Kong on May 30. "We can't compete with free."

And Asia, despite its huge mobile phone base and dynamic economies, is a big part of the problem for global record companies trying to embrace digital technologies as distribution channels for their artists. In China, about 350 million knock-off CDs are in circulation and these in turn are being ripped, burned, and transferred to PCs and MP3 music players, according to IFPI data. It is by far the biggest black market for pirated CDs, which cost the recording industry more than $400 million in lost sales per year—and the mainland is also a growing player in online fraud.

At the urging of major recording labels such as EMI, Mercury Records, Sony BMG, Universal, and Warner (WMG), IFPI has gone after regional Web sites and search engines such as Yahoo! China. The concern is that Internet service providers have allegedly maintained links to illegal music download sites, where one can gain access to tracks by international artists such as Coldplay and Gorillaz and any number of popular regional acts for no charge. On Apr. 24, a Beijing court ruled that Yahoo! China should be responsible for blocking access to such sites

On the Phone

That's not to say there aren't huge opportunities for the industry if it can make some headway in rolling back the piracy problem in Asia. About 85% of the $4.2 billion in digital music sales (online and mobile) last year in the Asia Pacific region were downloaded via music-enabled handsets. What's more, the total digital music market in Asia is expected to more than double to $9.35 billion, according to forecasts by Soundbuzz. Right now, ringtone melodies, rather than song tracks, are by far most the biggest type of digital music in demand.

In the future this could be sweet news for handset manufacturers with music phones that are easy to use, sync seamlessly with PCs and music sites, and have the kind of memory capacity that can store 1,000 or so songs.

Until recently, "Manufacturers haven't done a good job" developing music phones that match the ease of use and memory storage of popular MP3 players, especially Apple's smash hit iPod, says Chris White, a senior director for global music marketing at Motorola (MOT).

However, he thinks the mobile phone industry is closing the gap and points to the functionality of Motorola's new ROKR brand of music phones. To make it easier to find and transfer music quickly to its handsets on the mainland, the company has developed a MOTOMusic China site that offers 100,000 music tracks and is the biggest legal, online, commercial music service in the country.

Still, for the digital music market to deliver profitable growth to recording companies and most online sites, different types of business models must be rolled out that price music at a level attractive enough to build a big following of consumers interested in buying content legally.

Victimless Crime?

A number of executives think some sort of subscription-based, online music site (in which consumers pay one low, monthly fee for unlimited downloads) is the way to go. "You have to price music at a level that consumers will avail themselves [of]" and look for alternatives to pirated music, says Don Millers, president and chief executive officer at Beatnik, a San Mateo (Calif.) mobile-device software maker. However he admits that offering a significant discount on its copyrighted content is "going to be difficult for the music industry to accept."

Getting the right distribution and pricing strategies for Asia's fast-growing digital music market will be a critical challenge for the global music industry. Most young consumers in Asia think pilfered music is a victimless crime and hardly worthy of condemnation.

Indeed, a survey by researcher Synovate, released on May 30, of 15- to 34-year-old consumers around the region found that 25% had downloaded music from the Net—without paying—in the past month and 18% used file-sharing programs to swap music with friends. That kind of consumer behavior makes music industry executives mad—and will make profiting from Asia's digital music boom a tall order.

Bremner is Asia Regional Editor for BusinessWeek in Hong Kong.

Music Does Matter - Especially When It Is Mobile

Lots of big music industry folks down at Music Matters in Hong Kong last week. For those of you not familiar with the confab, it is basically an opportunity for everyone who touches the music business to sit down and talk about the business in Asia.

The attendees included EMI, Mercury Records, Sony BMG, Universal Music, and Warner Music Group, along with a host of other companies in different parts of the industry.

It's Like a Royal Navy Symposium, circa 1740

Naturally, at the top of everyone's agenda was piracy, and that got a lot of play. Reading the coverage each music executive sounded like a cross between Babbit and Marvin the Paranoid Android, spinning tales of woe about how they are all getting ripped off by those bad kids ripping their pirated CDs.

Research house Synovate contributed their little bit to the gloom, with survey results from around the region suggesting that one out of five of Asia's young urban consumers purchased a bootleg CD in the last month, and one in four downloaded an illegal song from the Internet. Synovate's stuff is interesting, but all it offered was a snapshot rather than some inkling of how some of those numbers might be evolving.

The downer of the session likely came from industry group IFPI, who estimate that piracy costs the music business $400 million annually around the region.

Now, that's not good, certainly, and we here in the Hutong are scrupulous - nay, anal - about legitimate content. But with clients and family in what has become affectionately known as "the Biz," I'll grant we are no test case.

Nonetheless, there is a sunny side to the music business in Asia, and the folks at the record labels appear to have a lot more to be happy about than the movie, television, and shrinkwrapped-software crowds.

The Music Industry Eats Its Wheaties in Asia

Brian Bremmer at BusinessWeek did a nice write-up on the program ("Asia's digital Music Free-for-All",) and he points to the PriceWaterhouse Coopers study that estimates Asia's digital music industry at over $4.2 billion. In other words, if you believe the stats, digital music sales alone, not counting sales of CDs or cassettes, is four times LARGER than the total estimated piracy losses in the region. Think the MPA would kill for those kinds of stats? You bet. And the digital music industry is supposed to rise to over $9.35 billion in Asia.

(Okay, so can we fess up to the idea that digital media is not such a terrible thing after all? That while it eases piracy and cuts down on album sales because people are just buying the tracks they want, that it really is a significant market?)

And you need to look at what is driving the market: mobile phones. PWC says that 85% of that $4.2 billion were songs downloaded directly to music-enabled mobile phones. Half of the people MTV surveyed in Asia said they would listen to music more if they had a mobile music device like a music-enabled handset.

The Future of Music is Mobile

You look at all of these numbers, and you are led to a couple of inescapable conclusions:

1. Piracy sucks and still exists in Asia. (It still exists in America, for that matter, but we digress)

2. The future of music in Asia is mobile, and it's a robust business already with huge growth prospects. Any artist, label, distributor, or retailer not doing everything they can to make legitimate music more accessible to Asia's one billion (and growing) mobile device owners is both ignoring their future and giving the business away to pirates.

The challenge is for the industry to work together to make listening to music an increasingly fast, easy, and delightful experience. The model is there and its working. Now the challenge is to broaden the appeal.

It's absolutely stunning Apple didn't own this event. My friends at Apple need to get their collective act together. The music lovers in this region are shopping at other vendors and building that habit. Don't wait for long, guys. The market sure won't.

Further Link: Mobile Converge

Article from 03.06.2007 Silicon Hutong

弄假成真

(nong4 jia3 cheng2 zhen1)

Make-believe becomes reality

旧的不去, 新的不来

旧的不去, 新的不来

(jiu4 de bu4 qu4 xin1 de bu4 lai2)

If old things don't go, new things will never come;

大吃大喝

大吃大喝

(da4 chi1 da4 he1)

Eat and drink to one's heart's content;
to waste too much money on feasting and partying