Around Asia'a Key Markets: Music Industry Overview

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Around Asia'a Key Markets: Music Industry Overview

  1. 1. MUSIC IN INDONESIA TODAY Presented By : Gumilang Ramadhan PT. Musica Studio’s
  2. 2. Physical Sales 1996 2010 2011 2012 2013 Until April 77 Millions 11 Millions 15 Millions 15 Millions 3 Millions
  3. 3. RBT Era • September  2004  to  October  2011,     Indonesia  manage  to  gather  25  Mio   Subscribers  across  all  telcos  
  4. 4. Digital RBT Sales RBT  Subscriber 2005 2010 Current 5  Millions 25  Millions 5  Millions
  5. 5. Details 1996 2010 2012 1.  Mobile Phone User 40 millions 180 millions 240 millions 2. Total Music Store/Chain +/- 400 +/- 300 +/- 200 3. Total Physical Distributor 26 26 18 4. Total Live Music (Tour) Top 10 Local & Int’l Artist - More than 3000 gigs More than 4000 gigs 5. Total Physical Bundling - +/- 4 millions +/- 9,5 millions
  6. 6. Details 2005 2010 2011 (until Oct) 2012 1. Total iTunes Indonesia Store - - - Just started 2. Other Digital - - +/- 10 % of Total Market +/- 10 % of Total Market
  7. 7. •  Local Music : 80 % •  Int’l Music : 20 % International vs Local Repertoire
  8. 8. 1. 360º Deal a. Artist Management b. Recording c. Publishing Unique Market 2. Bundling a. Physical Bundling b. Digital Bundling
  9. 9. 1.  To  Minimize  Digital  and  Physical  Piracy   2.  To  Panetrate  a  new  Niche  Market   3.  To  Panetrate  New  Bundling  Partners   4.  To  Maximize  ExisLng  New  Digital  PlaMorms   5.  Start  to  Collect  ReproducLon  Rights  From  Karaoke  Lounge   (more  than  1000  outlets  with  min  10  karaoke  rooms) 6.  We  Need  To  Persue  On  Sound  Recording  Performing  Rights   Law   Challenges
  10. 10. Thank You
  11. 11. India  Music  Update   Mandar  Thakur   COO   Times  Music  
  12. 12. •  Industry  consolida8on  as  players  come  together  for  common  physical   distribu8on  networks   •  Digital  revenues  contribute  between  60%  –  80%  in  most  labels  today   (up  from  50  %  about  3  years  ago)   •  Sheer  nature  of  top  selling  content  like  Bollywood  Film  music  (already   in  a  audio  visual  consump8on  format  –  necessitates    video  plaLorms   and  their  rise)     •  Growth   of   smart   devices:   already   30%   of   all   devices   are   internet   enabled   &   growing   at   CAGR   34%-­‐   which   effec8vely   means   consump8on  paUerns  of  music  will  change  from  IVR  based  to  digital   streaming  and  subscrip8on  services       •  iTunes  launched  in  India  in  December  2012  at  a  price  point  of  US  20-­‐25   cents  per  song  –  lowest  price  point  in  the  world     •  Local  streaming  services  Gaana,  Dhingana  and  Saavn  are  seeing  strong   growth   and   à-­‐la-­‐carte   download   services   are   beginning   to   emerge.   Youtube   viewership   gaining   trac8on   (aided   by   portable   mobile   devices)  –  Music  is  one  of  the  largest  drivers     4G/LTE  to  be  launched  in   2013  end  (with  expected   adop8on  of  4G  users   reaching  5  million  by   2014).  What  this  means  is   that  all  the  dots  in  the   Indian  ecosystem  to  foster   high  speed  streaming   music/video  consump8on   are  now  in  place  namely:     ü Smartphones  (sub  30  US $);     ü High  speed  LTE   connec8vity  (120,000   KM);     ü Content  availability  with   a  very  simple  licensing   structure;     ü Major  global  music   services  present  and   entering;       ü A  high  spending  middle   class     India  –  Music/Entertainment  Landscape  
  13. 13. India  –  Music/Entertainment  Landscape   •  Size  of  recorded  music  market  in  US$   –  The  Indian  music  industry  is  projected  to  achieve  revenues  of  INR  1,160  Cr.(US$215mm)     in  2013,  registering  a  growth  of  9%+  over  2012.     –  In  India,  film  music  (both  Bollywood  and  regional  film  music)  con8nues  to  be  the  mainstay   of  the  music  industry,  contribu8ng  approximately  70%  (depending  on  topicality)  of  the   industry’s  revenues   –  However,   what   is   extremely   important   is   -­‐   with   the   emergence   of   digital   streaming/ subscripDon  plaEorms  and  greater  channels  of  music  discovery,  consumers  are  now  being   exposed   to   newer   genres,   leading   to   a   growing   demand   for   non-­‐film   music   and   consumpDon  outside  Telco  dominated  ‘walled  gardens‘.  These  include  a  higher  poten2al   for  Interna2onal  music  sales  in  India.   –  IFPI-­‐2013  report  :  India  moved  up  to  #14  on  IFPI  Music  Sales  ranking  by  country   •  Physical/digital  split   –  Physical:  30%;    Digital:  70%     •  Domes8c/Interna8onal  as  %  of  respec8ve  plaLorms:       –  Physical:    5.5%,     –  Mobile  -­‐RBT  primarily:  1.5%,     –  Digital  -­‐led  by  itunes:  25%+  (also  includes  subscripLon/  streaming,  others)  
  14. 14. New  Film 55% Old  Film 30% Non-­‐Film  &   All  Else 15% Mobile  Music New  +  Old   Film 66% Devotional  /   Classical  /   Non  Film 22% Intl 7% Regional 5% Physical  Music Bollywood 60% Non  Film 25% Intl 15% Digital  Music Cross  Medium  Genre-­‐wise  Breakup   US$  1.1~1.8  (MVAS   ARPU)  –  TRAI  AR  FY12   The  rapid  growth  in  smart   phone  ownership,  growing   3G  access,  launch  of  4G   and  rising  household   broadband  adop8on,  are   opening  doors  to  new   business  models.      Major  legi8mate   services  (web-­‐based):   iTunes,  Nokia  Music   Ovi,  Gaana,  Saavn,   Dhingana   List  in  order  of  Revenue  generated:   • Telco  based  music  subscrip8on   services  (RBT  subscrip8ons  and   mobile  radio)   • Music  streaming    &  subscrip8on   services  viz.  Saavn,  Dhingana,  Gaana   etc.   • Video  streaming/subscrip8on   services  –  YouTube,  DailyMo8on,   BoxTV   • A  la  carte  downloads  (iTunes,   Nokia  Ovi,  Flyte)   Digital  Landscape  
  15. 15. Mobile 95% Internet 5% Digital  Sales  Breakup  -­‐10-­‐11 Mobile 80% Internet 20% Digital  Sales  Breakup  -­‐11-­‐12 CRBT 60% Mobile  Radio 20% Downloads  &   Streaming 20% Digital  Sales  &  Product  Breakdown Punjabi 40% South  Indian   36% Bengali 16% Rest 8% Regional  Content  share  breakdown Ringback  tone 70% Mobile  Radio 12% Ring  tones  &   images 5% Full  track   downloads  &   services 13% Product  based  breakup  of  mobile  music Digital  Landscape  
  16. 16. Live  Business  Overview   ü 2012   had   been   a   big   year   for   Live   music   industry   in   India   with   around  17  Interna8onal  acts  performed.   ü The   Indian   Live   Industry   comprises   broadly   of   Brand   Ac8va8ons   (26%),  Managed  Events  (72%)  &  Owned  IPs  (2%).  It  is  es8mated  to   grow  to  US$  900mm  in  2013-­‐14  growing  at  Y-­‐o-­‐Y  20%.  2013  has  seen   a  Y-­‐o-­‐Y  growth  of  28%   ü Labels  and  event  organizers  are  seeking  to  build  enduring  brands   around  music  plaLorms,  events  and  services.   ü Several  lifestyles  brands  are  associa8ng  themselves  with  live  music   events  and  concerts  in  order  to  engage  with  target  audiences  and   create  an  experien8al  property,  e.g.     • Eristoff  Invasion,  Bacardi  NH7  Weekender,  The  Great  Indian   Oktoberfest,  and  Percept’s  Sunburn,  Universal  Music  Group   has   started   a   ‘music   launcher   project’   for   HP,   Coca   Cola   India’s  Coke  Studio@MTV,  Bacardi  India’s  Dewarist   24.0% 19.0% 14.0% 16.0% 14.0% 14.0% 19.0% 17.0% 17.5% 13.0% 13.0% Digital  activations Sports Corporate  events Exhibitions B2C  awards,  Contests Brand  events Weddings Activation  campaigns Industry  Average B2B  awards TV  game  show  production Expected  category  growth  rate
  17. 17. •  The   past   year   has   seen   a   phenomenal   explosion   in   the   Indian  independent  music  ,  art  and  culture  ecosystem   •  This  industry  has  seen  a  financial  year  on  year  growth  of   28%           (Source  :  Events  and  Entertainment  Management  Associa8on,    Ernst  &  Young)  
  18. 18. From  a  paltry  number  of  9  in  2010,  the  number  of  art/music/lit  fes8vals  in  the   country  has  grown  to  75  +  this  year.  
  19. 19. From  an  average  aUendance  of  700  people  in  2010,  alterna8ve  music     concerts  /fes8vals  in  India  register  an  average  aUendance  of  7500+     audience  of  high  spending  Urban  Youth   An  average  weekend  spend  at  a  music  fes8val  stands  at  Rs  20,000  (US$400)+   per  person       (Data  gleaned  from  OML  fes8vals  over  the    past  3  years)  
  20. 20. Publishing  Business  Overview   •  Presence  of  Interna8onal  publishers  from  2006/7   •  Warner  Chappell  Music  Publishing  (represented  by  Times  Music)   •  Universal  Publishing  India  (fully  owned  en8ty)   •  Sony  ATV  Music  Publishing  (joint  venture  with  Sony  Music  India)   •  The  Copyright  (Amendment)  Bill,  2012  has  been  passed  in  May  2012.  This  has  been   welcomed  by  writers  and  composers  of  music  as  it  gives  them  ownership  rights  for   their  works  and  recognizes  mechnicals     •  India   is   incorpora8ng   interna8onal   and   WIPO   (World   Intellectual   Property   Organiza8on)   norms   into   exis8ng   laws.   The   new   act   specifies   that   the   authors   (lyricists,  composers  etc.)  of  underlying  works  and  assignees  (publishers)  are  each   en8tled  to  equal  shares  of  royal8es  received.  
  21. 21. 2012  Taiwan  Pop  Music   Industry  Market  Survey
  22. 22. Pop  Music  Industry-­‐  Na8on-­‐wide  Value  Es8ma8on   •  According  to  this  research,  Taiwan’s  popular  music  industry  is  valued  at  3.49   hundred  of  million  US  dollars.  (This  excludes  fiscal  income  from  travel,   transporta8on,  adver8sement,  and  entertainment  industry  and  other  addi8onal   values  from  transna8onal  or  cross-­‐industry  coopera8on.)   Profit  From 2009  (Million  USD) 2010  (Million  USD) 2011  (Million  USD) Record  Company 109 115 102 Digital  Music/  Media  Service   Provider 32 39 55 Live  Performance 59 62 123 Music  Copyright              (Corporate   Sales) 11 15 13 Music  Copyright                    (Karaoke   and  Videos) 28 58 56 Total  (Pop  Music  Value) 239 289 349
  23. 23. 170   71   25   37   27   9   19   51   12   109   148   121   103   41   0   17   56   264   0   0.7   23   0   45   274   0   49   15   160   141   0   38   0   50   100   150   200   250   300   Album  Sales  (Produc8on  Costs  included)     Copyright  Authori8za8on     Ar8st  Representa8on   Live  Performances   Digital  Music   Others  (Project  revenue  etc.)   Music  Downloads   Mobile  Service  (Ringtones)     Mobile  Subscrip8on     Broadband  Streaming   Others  (Internet  Maintenance  etc.)   Ticket  Sales   Venue  Rental     Merchandise   Corporate  Sponsor     Music  Educa8on     Others   Ticket  Sales   Venue  Rental     Merchandise   Corporate  Sponsor     Music  Educa8on     Others   KTV  (Copyright  Royal8es)   Dining     Karaoke  Recordings  Rental   Others  (Karaoke  Machine  Sales  etc.)   KTV  (Copyright  Royal8es)   Dining     Karaoke  Recordings  Rental   Others  (Retail  products,  misc.  )   Record  Company Live  House Promoter KTV  Distributor KTV  Venue Digital  Service Pop  Music  Industry-­‐  Profit  Dynamic  Breakdown Million  US  dollars
  24. 24. Pop  Music  Industry-­‐  Opera8on  Gross  Profit   Analysis 102   55   123   13   294   90   54   59   6   213   12.24%   0.31%   51.92%   50.13%   27.7%   0   10   20   30   40   50   60   0   50   100   150   200   250   300   350   Record  Company   Digital  Music  Service  PlaLorm   Promoter   Copyright  Management  Associa8on   KTV  Business   Gross  Profit  %  Million  USD 2011  Pop  Music  Industry  Gross  Profit  Analysis   Input   Output   Gross  Profit   Through  observa8on  and  comparison,  we  can  see  that  Promoters  share  the  highest  gross  profit  at   52.92%.  Copyright  Management  AssociaLons  follow  secondly  at  50.13%.  KTV  business  (venue  and   distributors)  hits  27.70%.  On  the  other  end,  Digital  Music  Service  PlaMorms  has  the  lowest  gross   profit  of  0.31%.  
  25. 25. Pop  Music  Consump8on  Characteris8cs Subject Album   Live   Performance Digital KTV Average   amount  (USD)/   per  year   $63.49 $81.45 $64.20 $103.33 Consump8on   Frequency     2-­‐3  8mes  a   year 2-­‐3  8mes  a   year Pay  by  monthly   2-­‐3  8mes  a   year   Consumer   Feature     Income  and   consump8on   are  directly   propor8onal   -­‐  Northern   Taiwan  avg.   USD$129.16   -­‐  Southern   Taiwan  avg.   USD$93.57     The  most   popular  service   is  KKBOX -­‐  Male     -­‐  Higher-­‐ income   35%  of  the  naLonal  populaLon  regularly  consumes  pop  music  products:  In  2011,   the  other  65%  does  not  purchase  music  products.  
  26. 26. SINGTEL  INNOV8   China  Music  Market   May  23,  2013  
  27. 27.         China  Music  Market   1.1    Consumer  usage  trends   27  Source: CNNC, iResearch June 2012 Service   No.  of  Users   (Millions)   Usage  ProporLon  (%)   6-­‐Month   Growth  Rate  (%)   Instant  messaging   445   82.8   7.2   Search   428   79.7   5.2   Music   410   76.4   6.4   News   392   73   6.9   Personal  sites/Social   353   65.7   10.9   Videos   349   65.1   7.6   Games   331   61.6   2.1  
  28. 28.         China  Music  Market     1.2    Market  Trends   •  Physical  –  immaterial   –  “The  physical  market  has  prac8cally  disappeared”   China  Record  Working  CommiUee   •  Digital  –  a  lot  of  units,  not  a  lot  of  money   –  China  digital  market  is  US$205m  in  revenue  (2011)   –  280  billion  units  downloaded/streamed  (2011)   –  Pay  model  vs  adver8sing   •  Video  –  the  new  fron8er     28  
  29. 29.         China  Music  Market     1.3    InternaLonal  vs.  Local  Repertoire   •  LiUle  interna8onal  influence  but  growing   –  Live  performances  by  interna8onal  acts  are   notoriously  difficult  to  organize   –  Taiwan,  Korea,  Hong  Kong  and  Japan   29  
  30. 30.         China  Music  Market     1.4    Recent  industry  moves   •  MP3  Search  licensing  deals   –  Labels  and  internet  players  come  to  the  table   •  Sites  gain  trac8on  by  offering  free  music  to   users   –  Unable  to  mone8ze  current  music  services  offered   –  Instead  pay  one-­‐8me/annual  licensing  fee  to  labels           30  
  31. 31.         China  Music  Market     1.6.1    Growth  OpportuniLes   •  July  1st,  2013   –  95%  of  the  China  digital  music  market  will  begin  charging  for   quality  copyrighted  music  downloads   –  Streaming  remains  free   •  Digital  Music  /  Hardware  partnerships   –  Ex:  Tencent  QQ  Music  /  Sonos  partnership   •  Tencent’s  digital  music  team  has  partnered  with  over  10  Audio  /  TV   manufacturers  since  2012             31  
  32. 32.         China  Music  Market     1.7    Trends   •  Digital  Na8ves  versus  Mobile  Na8ves   •  China  coming  out   •  Mobile  video   –  Online  video  10%  of  views  in  the  US  and  China   versus  50%  of  views  in  Japan  and  over  70%  in  Korea   •  Mul8channel  Networks/Audience  Aggregators   •  An  adver8ng  model  that  works  for  music             32  
  33. 33. Confiden8al  and  Proprietary        33   Korea: Music Industry Overview" May 23, 2013 / Singapore" Q Chung" Managing Director / Sony Music Korea Entertainment Inc."
  34. 34. Confiden8al  and  Proprietary        34   " • Digital: 10th" • Physical: 11th" " • Synchronization: 23rd" " • Performance rights: 29th" " " Total market: 11th" " Korea World Ranking in Recorded Music Market" (Source: IFPI)
  35. 35. Confiden8al  and  Proprietary        35   Digital Sales vs. Physical in Korea" (Source: IFPI) 0" 50" 100" 150" 200" 2008" 2009" 2010" 2011" 2012" Physical" Digital" 52% 45% 45% 45% 56% 48% 55% 55% 55% 44% (US$ Million, Trade Value) 'Korea was the 1st music market in the world where digital surpassed p hysical sales in 2007'
  36. 36. Confiden8al  and  Proprietary        36   International pop vs. Domestic pop (%) in Korea" (Source: IFPI) 2008 2012 International" 30%" Domestic" 70%" International" 16%" Domestic" 84%"
  37. 37. Confiden8al  and  Proprietary        37   韓流 K-pop goes Global" Billboard Magazine │ January 19, 2013"
  38. 38. Confiden8al  and  Proprietary        38   " • Most advanced wired and wireless country in the world" " • Korea is one of the top 4 net export music countries in the world" • Open dialogue with and strong support from the Korean government" • Local digital music portals dominate the local music market • Local music market driven by artist management companies and local " conglomerates" Unique market characteristics and strengths"
  39. 39. Confiden8al  and  Proprietary        39   Korean Digital Music Business" 40%" 48%" 53%" 43%" 16%" 23%" 20%" 22%" 37%" 74%" 14%" 10%" 8%" 23%" 22%" 17%" 20%" 10%" 0%" 20%" 40%" 60%" 80%" 100%" 2008" 2009" 2010" 2011" 2012" Other" Ad-supported" Subscriptions" Downloads" (Source: IFPI)
  40. 40. Confiden8al  and  Proprietary        40   " • How to maintain the overseas K-Pop boom" " " • Lack of industry standards : Awards, Charts and ISRC" • Digital Pricing not appealing to RO and Artists" " " • No global digital music stores/services in local market" " " Challenges"
  41. 41. Confiden8al  and  Proprietary        41   Growth opportunities " " • Advanced Digital Infrastructure" • Potential of International Digital Services launching in Korea" " • Massive Growth in Live and Artist management business" • Stronger Copyright Protections" • Diverse and Dynamic K-pop repertoire" "
  42. 42. Confiden8al  and  Proprietary        42   PSY" •  Release ‘GENTLEMAN’ (Apr. 12th)" •  Seoul concert at World Cup Stadium" (Apr. 13th)" •  Currently promo tour in North America"
  43. 43. Confiden8al  and  Proprietary        43   Cho Yong Phil" •  Legendary K-pop Artist" •  Release his 19th album ‘Hello’ (Apr. 23rd) " •  Dominate every K-pop chart"
  44. 44. Confiden8al  and  Proprietary        44   2PM" •  Tokyo Dome Concert" •  Apr. 20th ~21st "
  45. 45. Confiden8al  and  Proprietary        45   Super Junior" • Latin America tour " • Apr. 21st ~ 27th" • São Paulo, Buenos Aires, Santiago, Lima
  46. 46. Confiden8al  and  Proprietary        46   Yiruma" • K-pop Producer & Pianist" • Germany Tour" : Berlin (Apr. 5th) " " • Australia Tour" : Sydney & Melbourne " (May 2nd ~ 8th)"
  47. 47. Confiden8al  and  Proprietary        47   G-Dragon (Big Bang)" •  Hong Kong Concert" •  May 17th"
  48. 48. Confiden8al  and  Proprietary        48   Jason Mraz & Kim Jong-un (North Korea Leader)" " • SNL Korea " • Last Saturday "
  49. 49. JAPANESE MARKET OVERVIEW Ken Ohtake Music Publishers Association of Japan
  50. 50. Physical vs Digital 85% : 15% $3.6 billion
  51. 51. Local vs International 87% : 13% $468million
  52. 52. Uniqueness Artist Fans≫ Music Fans
  53. 53. Opportunities Streaming(Challenge?) Vibrant Live Music Scene Music Export

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