Indonesia is among the top performers for Spotify in Southeast Asia, where the service is also available in Singapore, Malaysia, Thailand, the Philippines and Vietnam. Apple Music and Deezer are also available in Indonesia, along with local services like Langit Musik and JOOX.
While revenue numbers are still relatively small, streaming revenue has increased nearly fivefold in Indonesia during the past three years, to $19.1 million in 2018, according to IFPI's latest global report. Over 98% of the country's total music revenue in 2018 came from digital sources, second in the world percentagewise only to Bolivia, and ninth in the world in other digital revenue, IFPI reported.
Overall, Indonesia's $41.2 million ranked as the 35th-largest music market in 2018, with 0.2% of global revenue, and 37th in streaming revenue, with under 0.2% of the global total. (Japan, the world's second-biggest market overall, draws 64% of music revenue in Asia, compared with Indonesia's 0.9%.)
Indonesia's monetized music penetration — paid and free streaming users — is still below 5% of the country's population, which is the fourth-largest in the world, says Toto Widjojo, managing director of Warner Music Indonesia. "If people can find a way to properly monetize some of the streaming outlets, the potential can be huge," says Cindy Gu, regional marketing manager for dance music at Warner Music Asia.
While the Indonesian market is not as well known as Asian powerhouses like South Korea or Japan, its potential is luring major labels and forward-thinking international producers. Composer-producer Iggy Strange Dahl, co-founder of Swedish hit-making collective The Kennel, says his group started to compose songs for Indonesian artists as early as 2013.
"When we started to work with Indonesia, they sold lots of physical CDs," says Dahl. "Now most of the biggest digital platforms are present in this region, which gives more artists possibilities to reach an audience both inside and outside of the country." Dahl adds that Indonesian labels are focused on synchs and brand deals, which he says will be crucial for artists in the future.
With Indonesian stars like DJ Dipha Barus and R&B singer NIKI — who has opened in the region for Halsey (2018) and Taylor Swift (2014) — paving the way, Indonesian music, some of which is sung in English, has become so popular outside of its home country that Spotify created the Pop Indo Hub for fans in 2016, while its Indonesia Top 50 playlist has over 300,000 followers.
Against that backdrop, some international music labels, including Universal Music Group, are signing more local acts. In September, UMG established a hub in Singapore from which it plans to pump up A&R and marketing resources in Indonesia, Malaysia, Indochina, Thailand, the Philippines and Singapore — an area that includes some 700 million people. UMG's plans for the region also include newly launched Def Jam Southeast Asia, headquartered in Singapore, which has been signing Indonesian rappers such as A. Nayaka.
"Where streaming penetrates, local repertoire consumption goes up dramatically," says Adam Granite, UMG executive vp market development. "We fully expect that to be the case in places like Indonesia. It's already the case in places like India and China."
Still, despite smartphone penetration reaching 73% in 2017, Indonesia's music market faces the same challenges in producing higher revenue as other emerging markets, most notably an ingrained lack of willingness to pay for music, says Yonathan Nugroho, managing director at Trinity Optima Production, one of Indonesia's biggest local labels. "Kids will still pirate files, go to free sites or to the ad-supported models instead of paying a subscription fee."
Aside from its burgeoning pop and hip-hop scenes, Indonesia and Thailand are the top markets for electronic music consumption in Southeast Asia, says Gu. Because catalog consumption is so heavy (up to 50% of streams come from releases older than 18 months), legacy acts often do well in Indonesia, but it's difficult to break new dance hits there, she says.
The live scene is also growing. Guns N' Roses grossed $2.5 million for one show in November 2018, while Ed Sheeran grossed $4.8 million on 49,000 tickets sold in May, both at Gelora Bung Karno Stadium in Jakarta, according to Billboard Boxscore. This summer, the sixth incarnation of We The Fest had its highest turnout yet, with 65,000 concertgoers spread across three days, up 15,000 attendees from 2017, according to Ismaya, one of the country's biggest promoters. The event featured international artists like U.S. hip-hop duo Rae Sremmurd, Troye Sivan, 6LACK and Cigarettes After Sex.
"Just this year there were five or six new music festivals in Jakarta," says Christian Rijanto, Ismaya's co-founder. He says that metrics from Spotify and JOOX inform his programming decisions.
Despite that growing sway, global streaming services like Spotify and Deezer are still more focused on international repertoire than domestic music, says Nugroho. (Their libraries are about 70% international and 30% domestic.) But as their followings have grown, artists like rapper Rich Brian — whose track "Dat $tick" has over 134 million YouTube views and was certified gold in the United States by the RIAA in 2017 — are starting to break through internationally.
Says Dahl: "It's just a question of time when we see the first Indonesian artist or band climbing the charts in the U.S. and Europe."
Additional reporting by Alexei Barrionuevo.
This article originally appeared in the Nov. 16 issue of Billboard.