Exploring Asia's Music Biz: Taking Cues From Korea's Dominant Streaming Service While Sizing Up a Collecting Society That 'Doesn't Square'
How fast will China rise? What's the next K-pop? Syracuse students look for answers across an energized landscape.
Bill Werde is the director of the Bandier undergraduate music industry program and the graduate Audio Arts program at the Newhouse School at Syracuse University, as well as Billboard's former editorial director. He is traveling with his students through Southeast Asia to explore the music markets, focusing on opportunities for the West and local tastes and trends, providing regular dispatches here.
MAY 16 | SOUTH KOREA
Korea's Top DSP: Meeting with Melon, the top streaming service in South Korea, provided a few key insights. Melon controls a whopping 60 percent of the streaming marketplace. That translates to 5 million + paid subscribers and 22 million monthly users -- not too shabby for a country with roughly 51 million people. In a 90-minute presentation, their obsession with keeping current customers happy turned up a couple of ideas that I wish Western companies would embrace.
One, they offer loyalty programs. As you stay on the service over years, you become eligible to unlock emojis, for example; the Melon emojis have a through-the-roof download rate. And two, they have a Top Fans listing on each artist page, which is brilliant. Think about the fan wars and Twitter armies. And then think how desirable it would be to claim that you were The number one Arianator on Apple Music or Spotify.
There have been rumbles of Spotify launching in South Korea, where they would join Apple Music, who has failed to make much of a dent after nearly three years. Given Melon's market share, their customer retention stats, and the 10+ years of data they have on Korean music fans, it's hard to see a big market opening here for the Swedes. Not to mention, it's a clear point of pride for every executive I spoke with that Korean companies dominate the music, media and telecomm markets in Korea.
Con-CA? Korea's royalty-collecting body KOMCA (Korean Music Copyright Association) could seemingly use some scrutiny. (Side note: South Korea's publishing industry in general has room for improvement, aka growth. Case in point: TV doesn't pay a sync to publishers.) No executive that we met with was willing to publicly discuss KOMCA. But everyone that I spoke with who collects royalties from KOMCA complained about the limited number of songs they added each month for collection, and the lack of transparency around their accounting practices.
I checked this out with the Western head of a publishing company with interests in South Korea, and that person confirmed the situation: "The idea that a music market as evolved, rich and export heavy as South Korea should have a local society that generates as little domestically as KOMCA … doesn't square."
Doesn't square, indeed.
Tomorrow? K-Pop, K-Pop and more K-Pop. But also: the Korean indie scene.
MAY 14 | SOUTH KOREA
Syracuse Students Launch Trip to Emerging Markets in China, Korea & More
Greetings from Seoul, South Korea, where I've just arrived with 13 students from the Bandier Program for the Music and Entertainment Industries.
I've directed this top-ranked program since August of 2017. But I've been obsessed with what's next in the music business since my early days writing about Napster and emerging remix culture in the late '90s for The New York Times, The Washington Post and others. And in a business obsessed with "next," perhaps nothing is more next as you read this than the emerging music industries in Asia.
China has sky-rocketed to be the No. 7 IFPI market for recorded music in the world, from non-player status just a few years ago. Many executives I've spoken with feel it will be top five in the next year or two, and could easily take the top spot away from the US if trends continue. K-Pop has reached explosive velocity and shows no signs of slowing down; to the contrary, we may only be at the beginning of this phenomenon. And Southeast Asia has the major labels positively salivating, according to one head of international that I spoke with as I was planning this trip.
Why? Because Indonesia, the Philippines and Vietnam alone represent roughly half a billion people. And unlike China, where local companies such as Tencent may already have an iron grip on the market, there may be substantial opportunity for the West -- if they don't screw it up.
The students and I will tour Seoul, Beijing and Tokyo, with a brief stop in Hong Kong. I will then continue on, solo, to Ho Chi Minh City for additional meetings in Vietnam -- an ideal little slice of the music industry's substantial aspirations in SE Asia. We are traveling to learn, firsthand, from the folks on the front lines of the music industry, about the governing -- and changing -- dynamics in each of these territories. Each of these markets is very different: China, the awakening giant; Seoul, the export country du jour; and Tokyo, the steady, mature industry, No. 2 in the world behind only the USA. And yet each is also very similar in another way: the West has failed to make many inroads, particularly when it comes to recorded and streaming music.
My group will meet with top folks at the newly-public Tencent in Hong Kong, Melon (one of the top DSPs) and SM (one of the top K-pop shops) in Korea, Western powers such as CAA and UMG, and local giants including Baidu, Netease and ByteDance (who owns TikTok) in Beijing. We will attend the Greenroom festival in Tokyo and Greenplugged festival in Seoul, and speak with organizers. When the dust settles, we will have had more than 30 distinct meetings, meals, office visits, drinks and conversations with the people creating tomorrow's music business.
Throughout, our focus will be on three questions: What is the Western opportunity (or lack thereof) and why, in these territories? What are the tastes and trends driving the local domestic market in each territory? And what is the likelihood of Western interest in domestic music, or, put more succinctly, is there a next K-pop waiting in China? We will consider these questions through the lens of labels, publishers, live, media and digital sectors.
So please, watch this space. I'll be posting quick insights as we go, geared toward sharing opportunities for the West, and fostering better understanding of this ever-globalized music economy. Because "next," when it comes to Asia, is pretty much "now."