The Year in International: Think Globally, Act Globally (Like PSY)

The Year in International: Think Globally, Act Globally (Like PSY)

The Year in International: Think Globally, Act Globally (Like PSY)

The music business in 2012 continued its inexorable march towards increased globalization at an ever-greater velocity. The year's biggest industry stories weren't limited to just the top music markets -- the U.S., Japan, Germany, the U.K. and Australia -- but the entire globe as artists, labels, promoters, retailers, tech companies -- and especially a certain pudgy Korean rapper -- thought and acted globally.

Perhaps nowhere was this more evident than Universal Music's $1.9 purchase of EMI Music.The deal, so quintessentially 2012, marked the consolidation of four major labels to three (remember the 'Big Six"?). Universal, a subsidiary of the French-owned Vivendi Corp., spent a large portion of 2012 anxiously awaiting regulatory approval of its non-refundable purchase of a British-based EMI Music that had gone into a kind of receivership to an American bank CitiGroup after European private equity firm Terra Firma failed to meet its payment obligations. Globalization indeed.

The Year In Music 2012

The first countries to approve the merger, in fact, came a full three months before the European Union's conditional approval. First New Zealand gave its unqualified thumbs-up on June 21; Japan followed on July 11; Canada on Aug. 20 and Australia on Sept. 19 presaging the seeming inevitability of the deal's approval by the U.S. and Europe. Interesting to note, too, that internationally, opinions on the merger didn't fall neatly along independent-major lines. Patrick Zelnick, the French owner of Naïve Records and co-President of the European based independent music association IMPALA, broke ranks with his organization to support the Universal-EMI merger. The U.S. congressional hearings (where former WMG chair Edgar Bronfman vehemently opposed the deal) pitted two Brits against each other: UMG Chairman Lucian Grainge and Beggars Group head Martin Mills.

The issue of technology was an oft-trotted out boogeyman both by those for and against the UMG-EMI merger. Those opposed claimed UMG's market share would allow the biggest music label to set global rates and stifle competition among music tech companies. On the pro side, some noted the role technology has played in lowering market barriers and the rise of independent labels. In his manifestation for the new music industry, UMG's Grainge said in the Financial Times that he wanted "a new way of working with all these startup platforms ... in a fair, open-minded way" that in an era of piracy and powerful technology groups, would create the same diversity of digital retailers that record companies enjoyed in the heyday of the record store.

With or without Grainge's manifesto, 2012's proliferation of digital music services spread out like planetary wildfire. Deezer, iTunes, Rdio, Spotify and others announced their expansion into various territories, which included parts of Latin America, the Middle East, Asia, Africa and beyond -- with no territory too small. Apple's expansion, while impressive in its sheer number of countries, contained some nation states so obscure there was some overlap with the Coalition of the Willing.

Where the music markets develop, touring is sure to follow. In the last year, Live Nation announced it was opening offices in Russia and the Ukraine; Lollapalooza launched in Brazil and announced its plans for Israel while parent company C3 expanded its relationship with local promoter GEO; and Ultra Music Festival, the EDM promoter expanded to Buenos Aires, Warsaw and Seoul.

In a recent interview, Live Nation CEO Michael Rapino spelled out quite clearly how the global market was part and parcel of Live Nation's core business. "...we had to go global," he said. "That sounds so simple now, but nine years ago it wasn't. There was nobody global [then], and we've gone from two to 41 countries in the last eight years, with the majority of our revenue now coming from overseas. We've still got lots of room to grow globally."

Even Shanghai's touring market began heating up in 2012 as for the first time two Western superstars -- J.Lo and Elton John -- played the city on back-to-back nights. This year marked something of a turning point for the Chinese music industry as the government made a concerted effort to enforce copyright laws and foster the development of a legitimate music business which now has a platform to blossom. Baidu, China's largest search engine, was removed from the Office of the United States' Trade Representative at the end of last year and grew its legal download operation throughout 2012. And U.S. indie label trade group A2IM made an historic trade mission to China marking the first time an established US music industry body met with Chinese counterparts with the government's approval. A Music Matters report in June on the growing Asian markets noted that "China's 1.33 billion citizens had a trade value of just $68.2 million last year. New mobile products and services and growing middle classes will undoubtedly lead to more consumer spending."

The accelerant to all this activity is whatever device you're using right this second to read this ( smartphones hit a billion users globally this past October). It's what galvanized the globe to support Pussy Riot, the Russian punk collective unjustly imprisoned for a music protest. It's what helped spread the word about an Australian-Belgian musician named Gotye with a voice like Peter Gabriel and an earworm about "Someone That [He] Used to Know." It's the fuel that finally brought the EDM explosion to these shores. These machines helped give Adele a second year atop the music charts. And even more jaw-droppingly astonishing, it was what catapulted a South Korean rapper with a catchy dance-pop song and a comedic color-saturated video to stratospheric heights.

On a myriad of levels the success of PSY's "Gangnam Style" is a paradigm shift for a changing global music industry. Only in 2012 could a relatively obscure 34-year-old without major label backing, radio airplay or a major tour, have the most-viewed video of all time ( surpassing the 1 billion mark on Dec. 21). The path to that success started with the uploading of the video to YouTube on July 15. Thirteen days later a user named Luckydud13 posted the clip to social-news aggregator Reddit on the very same day that BritPop star Robbie Williams posted the clip. A few days later Gawker noted the video, and on July 31 Scooter Braun, Justin Bieber's manager, lamented that he did not "sign this guy." A month and a half later, Braun did, inking PSY to a deal with his Schoolboy Records through Universal Republic.

It took PSY a sum total of two weeks from when his video hit his official YouTube channel to the day it caught the attention of one of the most powerful executives in the music business. In the past, artists spent that much time putting together a media kit with demo tape and promo pictures that more often than not wound up in some label's circular file. And for a song with non-English lyrics? Chances were zero to none anyone at a major label would even consider it.

PSY's example is certainly the exception to rule, and he did have 12 years of working as a musician under his belt. "Gangnam Style" was the first single from this sixth album and he had the not-insignificant resources of YG Entertainment (whose roster includes 2NE1, Big Bang, and Se7en) on his side. The video does not look as if it were done on the cheap. No matter, the path PSY has blazed (and others before like Rebecca Black, Michel Telo, Susan Boyle and more helped plot) is one others will follow. PSY's thumping electro dance beats, chantable chorus, ribald humor and absurd/brilliant dance steps were played out more than a billion times across the globe this past year (really just five months!). It used to seem that only tragedies, sporting events, political happening could create a massive global zeitgeist; that changed this year. More people than ever before in 2012 were on the same (YouTube) page.

When asked about the overall health of the global live music industry by Billboard's Ray Waddell in our year-end issue, Live Nation's Global Touring chairman Arthur Fogel may have summed up the future global market best. "The global industry is extremely healthy and shows great promise for the future,'" he said. "The economics [of emerging markets] have developed. The executional aspects of working in different regions of the world has improved dramatically and just continues to keep developing... the opportunities are endless."