Asia ‘The Future’ For Music Industry Says Label Boss

The largely un-tapped Asian markets are key to the future of the music industry according to Universal's global Chairman Max Hole.

Speaking at the Music Matters conference in Singapore, via Hollywood Reporter, Hole said the industry needed to adapt to countries like China to foster new business practices.

When I look at the Chinese music industry, despite its difficult past, I see the future,” he said. “China is not only the world's largest country, it is also the world's biggest experiment in testing the new business models of the future.”

Asia accounts for less than a quarter of global music revenues despite being home to 60 percent of the world's population.

“As an industry, China is our billion people challenge,” Hole said. “If we touch all of these consumers, just once a year, in some form, then we will generate more Yuan to re-invest in China and build our businesses.”

He added, “The Chinese have virtually bypassed the business model that we came to rely on so effectively in the West and Japan over the past 50 years. The traditional model of purchasing musical product, be it physical or digital, has never really existed in China on any major scale.

“The market is moving straight to one where it's all about securing access to tracks. We are in the middle of an extraordinary transition and it's very exciting to be part of it.”

Earlier this year a slump in Japanese music sales brought global music revenues down, with Hole telling theMusic.com.au via conference call that a market not ruled by major labels made it difficult to enact innovation.

“The three majors are different [in Japan] because it's Sony, Universal and an independent called Avex [Trax, part of the Avex Group] and they only make up about half the market, the other half of the market is made up of about 40 independents,” Hole said.

“In a consensual society it's amazingly difficult to build consensus in Japan, which is part of the background for the problems that we find ourselves in.

“For example, iTunes launched in Japan in 2008 and it took four years before they could persuade all of those constituent parts of the artist managers and the record labels to agree to license all of the repertoire into iTunes. And guess what? As soon as they did, 14 months ago, iTunes has exploded in Japan and is the one bright spark in the digital landscape, growing by about 30 percent.”

In his Music Matter keynote Hole said that it was imperative that the industry worked with business partners, regulators and business to help promote the region's investment in its own local industries.

“In the last 50 years the music industry has made 80 percent of its money in about 10 countries, and too much of our money in Asia with artists from outside the region. In the next 30 years I believe this has to change. The 80/10 split is bad for business, bad for artists and bad for fans. The real opportunity is turning the 80/10 into something more evenly balanced. Indonesia, China and India are key markets for us in achieving this.”

A number of Australian business have began to dip their toes into Asian markets, with Laneway festival's thriving Singapore date and Future Music Festival's popular Malaysian date. Artist Voice, one of Australia's biggest booking agencies, has a Hong Kong office.