From the start, it was clear that Music Matters has a distinctly different feel from most other conferences, more of what I’d call a ‘family affair’. Unlike other conferences that offer a plethora of simultaneous, often lightly attended, Music Matters sets a unified program followed by all delegates. The message is clear: If you want to understand the Asian market, here is the information you will need. And whereas the other conferences make participants available to facilitate scheduling meetings in advance, Music Matters takes a completely opposite approach. “We want a free-flowing networking event where everyone has access to everyone else in a open format,” explained Commercial Director Stan Ruza.

While I was initially skeptical that this would work, it ended up being a nice and productive change, especially for someone looking to build up a broad base of contacts in Asia. I left with as many contacts as I do from other conferences, even though it was much smaller — composed mostly of decision makers from all the major Asian markets: from Tokyo to Mumbai, Sidney to Kuala Lumpur.

Japanese Nirvana

While I learned a lot about the Asian market in those 2 days, the most surprising “revelation” was actually a question: when will the Japanese music market surpass the US for the #1 position? More shocking were the estimates ranging from only 5-10 years.

So what exactly is happening to justify this doomsday scenario (at least from the US perspective)? Simple: the Japanese love music, and are still more than willing to pay for it, whether old or young. Kei Ishizaka, CEO & Chairman of Universal Music LLC Japan and RIAJ (Recording Industry Association of Japan) Chairman presented some facts in his opening keynote “New Strategies & Opportunities in Japan” that might make some in the West red with envy:

* Digital sales in Japan have increased from 7.5% in 2005 to 20% in 2008
* Mobile is the driver, accounting for 89% digital sales in 2008
* Note that this is a slight drop from 94% in 2005, credited to iTunes Japan which, accounts for 50% of online sales
* Japan is the only music market where digital sales have made up for losses in physical sales – that is until 2008, when physical losses appear to be outpacing the growth of digital sales
* Japanese music consumers appear relatively price inelastic, with a willingness to pay the highest prices of any country for music: up to $4/ringtone and $30+/CD album
* The Japanese music industry is still a hit-driven one

Perhaps most importantly, the Japanese music industry has not abandoned its most profitable customers: those over 40. The dirty little secret in the US is that according to Soundscan, CD sales have fallen faster amongst those over 40, largely out of neglect by labels focused on the youth market. The Japanese music companies on the other hand, have consciously developed products for the over 40 demographic, which (i) do not download music and (ii) are willing to pay big bucks ($30+) for a high-quality CD (ie music, packaging…).

This is not to say that Japan is a complete musical nirvana: more music was acquired via illegal means (407 million tracks) than legal (329 million tracks) on mobile platforms. In 2006, the RIAJ sent over 220,000 takedown notices, and have since filed criminal charges against mobile BBS (Bulletin Board System) site operators. But despite these challenges, the Japanese market has been growing non- stop, with the exception of 2008 when it recorded a measly 3% drop in sales, which is not generally viewed as a trend for the coming years.

Get Me A Piece Of That Pie!

By this point, you’re probably trying to devise ways to grab of a piece of the Asian pie. Think again! You’re still more likely to make it in the US or Europe than earning any yens or yuans. Just like the Great Wall of China, the Asian market presents nearly insurmountable challenges for even the most savvy western artists.

First, the Asian market is completely dominated by local repertoire. Japan is actually one of the more accessible markets, with international repertoire accounting for a little over 20%; though, this has been decreasing over recent years. Look outside of Japan and the numbers are downright depressing. Take the fastest growing markets such as Malaysia, Indonesia, India and China; and their local repertoires accounts for nearly 99% of total.

Put simply, Asians want music that they are culturally/linguistically comfortable with and can relate too. Of course there is Hip Hop, Pop, and Rock throughout Asia, but it is all sung in their respective native language, with their cultural nuances. This is in complete contrast with the West where English is, for all intents and purposes, a necessity to become an international star, whether you’re called Shakira, Bjork or The Scorpions.

In addition, Asia has no long-tail effect. It is still a hit-driven market, which tends to play against foreign acts. The general consensus among conference speakers and attendees appears to be that Asian consumers are just too busy working to go hunting for new music, to listen to podcasts, or to endlessly surf social media sites.

As such, Asian consumers are much more ‘captive’ to recommendations and editorial leads than say the US, where we have a proud tradition of bin-diving for that rare LP – wasn’t the old Napster and today’s MySpace simply the digital shape of this art form? The fact that mobile drives music consumption as opposed to the net, has some part to play in this as well. For the same reason, all-you-can-eat subscription services competing with iTunes are not likely to gain a sufficient subscriber base despite the markets’ sizes.

But let us say, for argument’s sake, that you do develop some recognition in an Asian market. How do you expect to generate money from it? You’ve all heard of the scourge of piracy in Asia, so I don’t want to rehash the topic. Let me just leave you with this fact from Google China’s Bin Lin: of the 7,000+ music services in China, only 0.1% of their offerings are legal downloads.

Licensing isn’t much help either. Unlike North America and Europe, where Performing Rights Organizations (PROs) have a long history, collection agencies are relatively young in Asia and have yet to get a grip on the digital market. As a consequence, there is a lot of mistrust between publishers and PROs, which significantly hampers licensing opportunities. If one takes the Indian market for example, where 70% of music consists of soundtracks (courtesy of Bollywood), music labels have been collecting all relevant rights until recently.

Even the mature Japanese market has its eccentricities, such as songs being available free of sync licensing for commercial purposes up to one year after its release. As a consequence, success in the Japanese market may well depend on a willingness to waive sync rights for commercial use, representing an important way to break a song, explained Kimitaka Kato, Universal International Managing Director.

Are You Depressed Yet?

Frankly, I’m not! My recommendation is too look at the Far East as the Wild West: full of opportunity for those with the patience and guts too tough it out. The first lesson is that you are nobody unless you are here. Thus I made the trip to Music Matters and then to Beijing, where I met a successful music pioneer, Kenny Bloom.

Bloom, who was kindly referred to me by NARIP’s (National Association of Record Industry Professionals) Tess Taylor, came to China over 20 years ago to launch Warner Music. He now runs Mogo (www.mogo.com.cn), one of the coolest video sites in China serving the young, hip (undeserved) Chinese urban youth. So why is he still in China with everything I previously mentioned?

(i) China has the largest internet population (around 300 million, ie, the entire US population)
(ii) Around 80% of Chinese internet users are music consumers (240 million)
(iii) Music was the #2 search term for the last 3 years
(iv) At $50 billion annually, China is now the 2nd largest advertising market (It just recently surpassed Japan for the #2 position)

He also has a different take on the Chinese consumer. According to Bloom, it’s not so much that the Chinese are busier or harder working, but that they are in an underdeveloped media market. Media in China (TV, radio and to some extent the internet) is directly or indirectly controlled by the Communist government.

As The Economist recently noted “the proliferation of channels for media, information and entertainment offers unbounded scope for the [Chinese Communist] party to get its message across, abetted by commercial operators.” One consequence of this is the sanitizing of media in order to appeal to a national audience that includes rural peasants as well as urban dwellers. It’s a process not unlike our over-conglomeratized radio or broadcast TV markets, which is suffering from competition by more original and niche programming on cable, satellite and the internet.

The upside is that this presents unique opportunities to serve the growing chique urban class, which the centralized media market is incapable of satisfying; a segment Bloom estimates to be 40 million and growing. By serving this high-value segment with high-quality, original video programming, Mogo is able to attract big-name brands such as Converse that place a premium on this demographic. To some extent, Mogo is trying to do for China today what MTV did for the U.S. in the 80′s.

Another Beijing-based company to watch is Yobo Music (www.yobo.com), a recommendation and discovery site for music. Its founder Allen Guo was perhaps the most eloquent at Music Matters on the need to offer Chinese consumers a variety of models and services that enhance their music experience. Only by meeting the various needs of different consumer segments — as the Japanese music market has done so successfully — will alternatives to piracy be sustainable. make bath salts

Future revenues will be driven by value-added music services rather than easily pirated downloads or ringtones. And while advertising may seem a panacea to many in the U.S. and China (did I mention they are the 2 largest advertising markets), Allen noted some success by Yobo Music with other revenue models such as micro-payments and music gifting.

The Silver Lining

In the end, the Wild West was tamed and I believe the same will happen with China. America in its first 50 years was home to pirates (ie., privateers) and some of the worst copyright/patent infringers of the time. This is part of what lead to the growth of the young, scrappy republic. But as it matured, and itself became more of a creator/innovator, America began to place increasing value on protecting copyright/patents.

The same will be true for China. As Bloom noted, “How do you expect a people that had no concept of private ownership 10 years ago to understand, let alone value, something like copyright?” In other words, not only has copyright been a foreign concept, it would have been counter-productive to the country’s development. But as it begins to export more cultural goods and develop new patents, that trend will reverse as surely as it did in the US. The only question is whether it can put the genie back in the bottle when the time comes.

I happened to arrive in Beijing on the 20th anniversary of the Tiananmen Square incident. Sure enough, I could not access Twitter or YouTube, and any coverage on foreign TV channels, like BBC were blocked by a blank screen. Once the Communist Party determines that copyright is something worth putting the effort towards protecting, I wouldn’t give those 7,000+ so-called music services much of a chance.

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The Digital Music Market Outlook: Evolving business models, key players, new challenges and the future outlook

The increasing adoption of broadband and mobile technologies and the widespread adoption of smart phones and portable music playing devices continue to drive the digital music market. The music industry landscape is undergoing major structural changes as companies from other industries become integrated into music distribution, and business models transform to adapt to changing market demands. Piracy remains a major concern in the industry, with losses from illegal downloads running into billions of dollars. ‘The Digital Music Market Outlook: Evolving business models, key players, new challenges and the future outlook’ is a new report published by Business Insights that analyzes the growth of the digital music market and recent transformations to the industry structure and business models. The report examines the growth drivers and inhibitors of the market, emerging geographies, industry challenges and the future market outlook. It also provides detailed profiles of the leading digital music service providers including an examination of their operations, service offerings, financials and strategic outlook.

Key Chapters :

The Digital Music Market Outlook

Executive summary 10

Digital music – the new era 10

Key markets 11

The value chain and evolving business models 12

Key challenges 14

Future outlook 15

Key players 17

Chapter 1 Introduction 20

What is this report about? 20

Methodology and definitions 21

Chapter 2 Digital music – a new era 24

Summary 24

Global market overview 25

Market size and growth 25

Segmentation – online and mobile music components 27

Digital music more popular among younger consumers 29

Growth drivers 31

Increasing penetration of broadband and mobile technologies 31

Soaring sales of smartphones and portable players 33

Expanding online catalogues and DRM-free strategy 34

Key trends 34

Innovative marketing drives the market forward 34

Move towards DRM-free tracks 35

Partnerships emerging across the value chain 35

Artists reaching out to fans directly 36

Growing involvement of local governments and ISPs in controlling piracy 36

Chapter 3 Key markets 38

Summary 38

Developed markets 39

US 39

Japan 44

UK 52

France 56

Germany 57

Emerging markets 57

China 57

India 59

Brazil 60

Chapter 4 The value chain and evolving

business models 64

Summary 64

The virtual music value chain 65

Artists 67

Record labels / production companies 67

IP rights protection body 68

Physical retailers 68

Digital music retailers 68

Consumers 70

A-la-carte downloads vs. subscription services 71

Key emerging business models 73

Advertising supported services 73

Artist led distribution channels 75

Linking with brands, merchandise and mobile games 76

Music access services by ISPs and mobile operators 78

Partnerships across the value chain 79

Flexible pricing 81

Chapter 5 Key challenges 84

Summary 84

Introduction 85

Piracy – plague of the digital music industry 85

Depth of the problem 85

Piracy spans across geographies 87

Steps to curtail piracy 88

Role of ISPs and government support 89

Legal action against P2P networks 90

Initiatives by record companies 90

Interoperability issues – finding an effective DRM system 91

Determining the right price for digital music 92

Chapter 6 Future outlook 94

Summary 94

Strong growth to continue 95

Developed and emerging markets 95

The future face of music – music to go 96

Graduating to full-track downloads and music videos 96

Evolution of business models 97

Subscription model is the key to the future 97

Ad-supported services will become more popular 97

Labels reaching out to consumers directly 97

Cashing in on live music 98

Capitalizing on popularity of social networks 98

Emergence of new business models 98

Changes in the pricing mechanisms 99

Technology innovations and advances 99

MP3 player market to grow with innovations 99

Technology enabling music on the go 99

Convergence of multiple formats, devices and channels 100

Audio formats and quality 100

Music piracy 100

Music piracy most rampant among younger consumers 100

Collective efforts required to curtail music piracy 101

Chapter 7 Key players 104

Summary 104

Digital music retailers 105

iTunes Music Store 105

Overview 105

Service offerings 105

Operational and financial performance 107

Strategy 109

eMusic 110

Overview 110

Service offerings 111

Operational and financial performance 112

Strategy 113

Napster 114

Overview 115

Service offerings 115

Operational and financial performance 116

Strategy 117

Rhapsody 118

Overview 118

Service offerings 119

Operational and financial performance 120

Strategy 122

Amazon MP3 123

Overview 123

Service offerings 123

Operational and financial performance 124

Strategy 124

7digital 125

Overview 125

Service offerings 125

Operational and financial performance 126

Strategy 126

Wal-Mart Music Downloads 127

Overview 127

Service offerings 127

Operational and financial performance 128

Strategy 128

Appendix 130

Index 130

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The fact is, there are ways to build your fan base and amplify people’s interest your independent music – without selling out. If you are an independent music maker, here are a few ways you can do some marketing without selling out to the music industry.

First, you need to put aside your anti-marketing frame of mind and think about what is best for your career in the music industry. Finding ways to reveal your ideas and creations through your sound to more people, which in turn is essentially marketing shows that you believe in what you are creating.

Doesn’t the music you develop deserve to be heard around the world? Of course you think that way unless you only want to play for yourself. Marketing does not have to be a negative word. There are ways to market and advertise your music without “selling out” as independent music artist.

Think of your fans, they are your best promoters and marketers! Marketing isn’t all about dealing with media and big corporations. If you’re not comfortable with dealing with those people, forget about them and focus on your fan base. Have you considered provided them with ways to “spread the word.” They may already be doing just this for you. Fans probably already market for you and they will be your most passionate music contacts and promoters.

So now, you just must increase your fan base’s size and your marketing will increase. See, this is done without the use of those outlets you may despise. What is better than that? What do your fans love about your music? Once you know this, it becomes even easier to find more prospective fans that would also be interested in your music and your message.

Independent music marketing does not have to be corporate nor selling out, now does it? You are sharing what you love with those who love what you do. Use this concept to your advantage. The music industry is all about money and there is money to be made. Take a little piece of the pie without feeling like you are turning your back on your beliefs.

2. Make use of MySpace and start spreading the news. Have many friends as you can. Do some bulletin posts for your friends to read it. You can resort in using friend blaster programs to help you boost your list of friends.

3. Your profile along with your tunes and photos should always be available for public may it be in your MySpace account or with your web site.

4. Your set of audios can be submitted to different social media websites such as Last.fm, American Idol Underground and Ourstage.co. Be keen enough in searching through the Internet. Use different strategies when searching to broaden its results.

5. There are websites that offer free classifieds for your advertisements like Craigslist. This kind of websites provide specific categories that allow you to place your advertisements accordingly. You might as well incorporate links from Craigslist into your MySpace account, also try using UsFreeAds. The Internet provides numbers of freelistings for you to post your ads.

6. Provide professional write-ups such as articles and submit it to EzineArticles.com, GoArticles and to other article directories. Place your article in an appropriate category such as Music. In your content are given the opportunity to convince your readers to checkout your MySpace account and listen to your music.
7. Join forums of musicians and message boards. Make use of taglines having your MySpace or website address in it. Remember more visitors to your web sites much better.

When it comes to music marketing strategy your main target is to have a high traffic for your website who will be listening to your music. Make people know about you and your music. Through your links you are able to promote your music and even about your band. Learning about the idea of how Search Engine Optimization (SEO) works may also help you in giving your website an organic traffic.

What I’m really pushing artists to do right now is sell affiliate
products because the returns from commissions are more generous than CD’s and sell better, so it only makes sense, Sell your CD too, sell whatever fans will buy basically, stay innovative. It is the basic idea of Music Marketing Campaign. Use an email newsletter as well as a blog and social network promotions to push various propositions to your fans. It’s important to have many avenues open and have a variety of purchase options available so you can see what your fans are really interested in purchasing.

Kurb promotions are always happy to start with the basic online promotion, but I am interested in the email list you’ve already established. This is main strategy of Music Marketing Campaign. Have you got a strategy to engage this audience, and are you thinking about what you want to happen when we start driving traffic?

We can work towards pushing the album but I think the best ways to be sure that you’re connecting with that traffic is to offer some kind of free download or set up some kind of situation where the fans will want to return so that you continue to have opportunities to interact with them and sell them the album or related propositions. Basically have you got material ready for social networks blogs and newsletters? When traffic arrives on your website, myspace etc. what is the main outcome you’re looking for?

Because rather than have them arrive and go away again we need to be pushing toward a specific direction for fans to act, and if we don’t make that clear and straightforward we won’t be able to bring them to a point of engagement where they are ready to spend money. In some Music Marketing Campaigns we might want to pay attention to
how you can earn in the short term so artists can make money from music related business quickly to cover their initial investment.

This usually for me involves focusing on 1 product or service
combination that we can push at $100+ because it’s much easier to sell 1 x $100 product than it is to sell 100 x $1.
But at the same time I feel you’re pushing toward a earnest connection with fans, I think you’ve got the right attitude and appeal, which means although you need to support yourself the best path may be slowly building up those “real” connections to your fans and me helping you with technology so you can retain that intimate, personal
connected vibe with your fans while still keeping yourself viable as a professional.

It’s a hard road but in the future of the music business it may be the only one. Marketing and promotions can only do so much, and connection between the fan and the artist is now essential to building a business. Getting everything for your Music Marketing Campaign in order and accentuating your artist brand now could set you up for sustaining
momentum long term. Generating income short term although is another excellent way of maintaining momentum long term! If you are interesting in Music and want to know more about it then visit us at: www.MusicMarketingManagement.com

I’m quite experienced in Music Marketing and promoting novel acts because my background is in marketing and branding, which is all about translating unique experiences into value for audiences, and making their enjoyment and your recognition into a source of income online.

It’s important when artists understand that they are personally committed to their art that professional support is probably required to determine whether there’s a realistic market for what you offer, or more precisely in my field, to determine whether this can be developed into a source of income through new online business models and marketing methods.

From a sales perspective, you need a strong sales pitch on your site so to speak, but perhaps before we investigate that it would be worth examining your basic business models. I don’t know how viable driving sales and revenue with a CD in this era so we’d want to look at what you can offer in broader depth.In terms of promotion we have plenty of methods and techniques that would compliment your emerging brand but we’d have to assess what we’d need to do pronounce that brand – really take that tone from your blog and make it present.

I always say to artists we can do our promotion and drive fans but there needs to be something there for them to engage with, you’ve got your email list, now you need to drive sign ups with content that connects. Thats why this branding and development of content for your audience is so important. Online you have to have a consistent presence in order to build a consistent fanbase, then you can create revenue by servicing that fanbase in multiple ways including CD sales.

With $600 we could do a fair bit in 3 months, I’d suggest a makeover for your site, and developing your blog as a platform, and promoting that through search engines. I would also use an online advertising campaign to drive email sign ups – this becomes more effective once your whole sales process has matured – but we’d also have to develop your email management process to work in with your business model.

So there’d be a lot of written content development and editing required but we’d also look at how we can use video to meet our needs, and perhaps work on creating a video for the purpose of driving

propositions such as email sign ups and sales relevant to our primary business model (whether thats selling CD’s or otherwise).

Youtube and Myspace promotion we’d have to discuss whether these were suitable.

Basically it depends whether you want simple online promotions or you need us to get involved with branding and content creation also.

I know your basic content is strong but have you got the capacity to engage a building fanbase with regular weekly content?

So your basic $200 p/month covers the promotion you’re talking about, social networks, and search through Google. I’ll also discuss recommended strategies for online advertising which I suggest an

additional budget of $50 p/month for.

But what will happen when social and search visitors begin to arrive?

Have you got free content we can offer to push email sign ups?

And will you need support in delivery weekly content through the social portals and your blog?

If you and/or the artists can contribute regular blog posts, video content and interactive/viral concepts, great, but you may need regular content developed (blogs, video, interactive/viral elements) and branding support to engage fans.I think once you’ve got your head around outsourcing and having guys overseas do all the promotion for you, that’s pretty much half of learning Music Marketing how to sell your music online. But you want to know which sites I use where I do everything and how I do it so it all works out. Once you know that stuff, well you’ve already got the edge over the guy who is completely DIY.

Now you just need to work out how to make money. I can’t promise anything there but I can give you plenty of ideas to Sell Your Music Online and some of them work for me, I’m sure one or two will work for you. You just have to be ready for it take a couple of years. That’s life. For more log onto: http://www.musicmarketingmanagement.com