Music Matters Keynote from IFPI CEO Frances Moore Outlines Digital Growth, Challenges and Opportunities in Asia

IFPI CEO Frances Moore, delivering her keynote at the Music Matters conference

The 2013 version of Asia’s leading music conference, Music Matters, closed on Thursday evening with the legendary Seymour Stein offering an impromptu tribute to conference founder and impresario Jasper Donat. Stein attended the meetings and noted organizing was “in Jasper’s blood.” He also lauded efforts by the event to build bridges between the Asian music markets and the West.

The conference saw industry execs Rob Wells of Universal Music Group, Axel Dauchez of Deezer, Frances Moore of IFPI, Kenji Kitatani of AVEX and Johnny Wright, among many others, present.

Dauchez, CEO of the streaming giant Deezer, highlighted his company’s international presence and focus on Asia. He noted the global platform launched one year ago and already has 4 million subscribers and access to 25 million tracks. Dauchez noted of all the streaming services Deezer “is in the most Asian markets and has the most users.”

Dauchez acknowledged that Asia presented special challenges and needed detailed research. He outlined two points a company should consider when attempting to enter the Asians markets: a B2B approach, and mobility. Dauchez stressed that for Asia the uniqueness of each territory meant that B2B was the most effective way to penetrate the markets. He also emphasized companies' need to be fluid in their approach and adapt to the local circumstances.

Frances Moore, the CEO of IFPI, gave a optimistic and rousing keynote address. She started out by noting that worldwide the music industry grew by .02 percent and it was the first growth in 13 years. She added, “It is clear that sustained year-on-year growth on a global basis may take a few more years to arrive. But even so, there is a palpable buzz across our industry which hasn't been there in recent years.”

Moore went on to detail the reasons for the excitement. She said, contrary to the take that the music industry is against the Internet, it is a core part of the music business now. “First, we are a business that ‘gets’ the Internet. Consumer choice in music has transformed and is still widening. 30 million tracks available. More than 500 licensed services worldwide. These are impressive statistics and they debunk the myth still peddled by some that the music industry has not fully licensed its repertoire for the digital age.” She lauded the plethora of subscription services available worldwide and noted that subscription service revenue was up more 60% in 2012 in a year-on-year comparison.

Another reason for optimism is the new global nature of the business. Moore related, “In 2011, the major international services were present in only 23 countries. Today, just two years later, they are in more than 150. There is a rush of new services alongside the boom of smartphones and tablets -- particularly in emerging markets such as Brazil, India and Mexico. Markets where growth in the last four years has been spectacular in comparison with global trends.”

Another reason for the renewed sense of hope in the industry is the way local music is travelling internationally, finding new markets. Moore observed, “Increasingly, we see repertoire from emerging and non-English speaking markets reaching out across national borders. PSY's 'Gangnam Style' was number three in IFPI's global best-selling single table of 2012. Brazil's Michael Tel was number six. It is exciting to see non-Anglo-American artists connecting to a fast-expanding global audience.”

Moore then turned to Asia and noted it was a region of particular growth and diversity. She explained, “In terms of revenue growth, one of the most positive stories of 2012 was India. A market where the smartphone revolution helped revenue growth of 20% last year, and where new download and subscription services promise more in 2013. There are still very few countries in the world where digital income has crossed the 50% threshold and accounts for more than half of all revenues. India is one of them, along with the US and some Scandinavian countries.” 

She analyzed further a number of Asian markets, including South Korea, China and Japan, and pointed to strengths in each. The K-pop boom in South Korea, the Chinese giant Baidu cutting deals with record companies in that territory and the continued strength of physical in Japan. Of the region she concluded, “the whole of Asia is right now at a pivotal moment of development. Licensed digital content is spreading rapidly across the region. Physical sales and the first generation of mobile and ringtones businesses are giving way to a new generation of digital services, delivered on new platforms. You can practically see the momentum building. iTunes has opened stores in 14 markets, many of them local language services and all of them licensed by majors and independents. If iTunes sales evolve in Asia as they have in other markets around the world, we can expect strong growth.”

Music Matters also had a special focus on Japan this year. Ken Ohtake, president of Sony Music Publishing Japan, gave a market overview in which he pointed out that physical sales in the country grew in 2012 and that the Japanese music market had total revenue of $3.6 billion in 2012. This was split between physical and digital 85%-15%, with, unusally, the lion’s share going to physical. Ohtake also noted the Japanese government is becoming proactive in supporting the export of Japanese content, something the industry has long called for.

Kenji Kitatani PhD., president of AVEX International Holdings, gave an informative Q&A. He explained the often wondered-about strength of the physical market in Japan, noting that the sale of CD singles was very strong, something that other markets lack. He also pointed to the strength of J-pop acts like AKB48, which have been very successful in marketing their physical product across generational lines in Japan. Dr. Kitatani also informed the audience that the mobile broadcasting business has emerged in Japan as a major force. He pointed to the success of two services, Bee TV and Uula, and noted that they have more buzz than terrestrial TV broadcasts now.

The bountiful Japanese presentations concluded with Tadashi Goto, a producer at Barks, the ‘go to’ website in Japanese for info about the Japanese music scene, giving a talk. He announced that Barks is launching two Chinese language websites (simplified and traditional characters) in addition to their recently launched English language website, noting the worldwide interest in Japanese music is increasing.