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. 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. • Local Music : 80 %
• Int’l Music : 20 %
International vs Local
Repertoire
8. 1. 360º Deal
a. Artist Management
b. Recording
c. Publishing
Unique Market
2. Bundling
a. Physical Bundling
b. Digital Bundling
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
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
$);
ü High
speed
LTE
connec8vity
(120,000
KM);
ü Content
availability
with
a
very
simple
licensing
structure;
ü Major
global
music
services
present
and
entering;
ü A
high
spending
middle
class
India
–
Music/Entertainment
Landscape
13. India
–
Music/Entertainment
Landscape
• Size
of
recorded
music
market
in
US$
– The
Indian
music
industry
is
projected
to
achieve
revenues
of
INR
1,160
Cr.(US$215mm)
in
2013,
registering
a
growth
of
9%+
over
2012.
– In
India,
film
music
(both
Bollywood
and
regional
film
music)
con8nues
to
be
the
mainstay
of
the
music
industry,
contribu8ng
approximately
70%
(depending
on
topicality)
of
the
industry’s
revenues
– However,
what
is
extremely
important
is
-‐
with
the
emergence
of
digital
streaming/
subscripDon
plaEorms
and
greater
channels
of
music
discovery,
consumers
are
now
being
exposed
to
newer
genres,
leading
to
a
growing
demand
for
non-‐film
music
and
consumpDon
outside
Telco
dominated
‘walled
gardens‘.
These
include
a
higher
poten2al
for
Interna2onal
music
sales
in
India.
– IFPI-‐2013
report
:
India
moved
up
to
#14
on
IFPI
Music
Sales
ranking
by
country
• Physical/digital
split
– Physical:
30%;
Digital:
70%
• Domes8c/Interna8onal
as
%
of
respec8ve
plaLorms:
– Physical:
5.5%,
– Mobile
-‐RBT
primarily:
1.5%,
– Digital
-‐led
by
itunes:
25%+
(also
includes
subscripLon/
streaming,
others)
14. New
Film
55%
Old
Film
30%
Non-‐Film
&
All
Else
15%
Mobile
Music
New
+
Old
Film
66%
Devotional
/
Classical
/
Non
Film
22%
Intl
7%
Regional
5%
Physical
Music
Bollywood
60%
Non
Film
25%
Intl
15%
Digital
Music
Cross
Medium
Genre-‐wise
Breakup
US$
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. 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. 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. • 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. 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. 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. 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.
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. 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. 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. 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.
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.
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$205m
in
revenue
(2011)
– 280
billion
units
downloaded/streamed
(2011)
– Pay
model
vs
adver8sing
• Video
–
the
new
fron8er
28
29.
China
Music
Market
1.3
InternaLonal
vs.
Local
Repertoire
• LiUle
interna8onal
influence
but
growing
– Live
performances
by
interna8onal
acts
are
notoriously
difficult
to
organize
– Taiwan,
Korea,
Hong
Kong
and
Japan
29
30.
China
Music
Market
1.4
Recent
industry
moves
• MP3
Search
licensing
deals
– Labels
and
internet
players
come
to
the
table
• Sites
gain
trac8on
by
offering
free
music
to
users
– Unable
to
mone8ze
current
music
services
offered
– Instead
pay
one-‐8me/annual
licensing
fee
to
labels
30
31.
China
Music
Market
1.6.1
Growth
OpportuniLes
• July
1st,
2013
– 95%
of
the
China
digital
music
market
will
begin
charging
for
quality
copyrighted
music
downloads
– Streaming
remains
free
• Digital
Music
/
Hardware
partnerships
– Ex:
Tencent
QQ
Music
/
Sonos
partnership
• Tencent’s
digital
music
team
has
partnered
with
over
10
Audio
/
TV
manufacturers
since
2012
31
32.
China
Music
Market
1.7
Trends
• Digital
Na8ves
versus
Mobile
Na8ves
• China
coming
out
• Mobile
video
– Online
video
10%
of
views
in
the
US
and
China
versus
50%
of
views
in
Japan
and
over
70%
in
Korea
• Mul8channel
Networks/Audience
Aggregators
• An
adver8ng
model
that
works
for
music
32
33. Confiden8al
and
Proprietary
33
Korea: Music Industry Overview"
May 23, 2013 / Singapore"
Q Chung"
Managing Director / Sony Music Korea Entertainment Inc."
34. Confiden8al
and
Proprietary
34
"
• Digital: 10th"
• Physical: 11th"
"
• Synchronization: 23rd"
"
• Performance rights: 29th"
"
"
Total market: 11th"
"
Korea World Ranking in Recorded Music Market"
(Source: IFPI)
35. Confiden8al
and
Proprietary
35
Digital Sales vs. Physical in Korea"
(Source: IFPI)
0"
50"
100"
150"
200"
2008" 2009" 2010" 2011" 2012"
Physical"
Digital"
52%
45%
45%
45%
56%
48%
55%
55%
55%
44%
(US$ Million, Trade Value)
'Korea was the 1st music market in the world where digital surpassed p
hysical sales in 2007'
36. Confiden8al
and
Proprietary
36
International pop vs. Domestic pop (%) in Korea"
(Source: IFPI)
2008
2012
International"
30%"
Domestic"
70%"
International"
16%"
Domestic"
84%"
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"
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. 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. Confiden8al
and
Proprietary
42
PSY"
• Release ‘GENTLEMAN’ (Apr. 12th)"
• Seoul concert at World Cup Stadium"
(Apr. 13th)"
• Currently promo tour in North America"
43. Confiden8al
and
Proprietary
43
Cho Yong Phil"
• Legendary K-pop Artist"
• Release his 19th album ‘Hello’ (Apr. 23rd) "
• Dominate every K-pop chart"
