Lachie Rutherford is the GM of Warner Music Asia. He has been active in Asian music for over 20 years. You can see his extended profile here.
We first came across Lachie at Music Matters ’08. He came across as a fairly typical big label boss, bemoaning the loss of the golden days of big label supremacy and railing against the realities of a new music industry. This is what he had to say this year:
There is a large gap between Japan and the rest of a potentially huge market in Asia, despite relative successes in Malaysia and Indonesia.
There are 3 Myths about music in Asia:
Myth: international music is critical to development of digital music in Asia.
The figures don’t back this up: 80% of digital business is by domestic artists.
Myth: It is a long tail business.
Not true. It is a hit driven business in Asia.
Myth: Asian artists are as sensitive about commercial tie-ins as Western counterparts.
So, in Asia, as a telco, don’t advertise in an abstract way featuring (and I quote) a pretty girl walking by a river singing. Speak to a record label about their artists: Artists in Asia are trusted – give credibility to a brand as an endorser.
FACT: Asian people work hard and are very busy. You need to feed them via editorial and ratings – create a simple and easy experience – they have no time and they will feel intimidated, especially if there is lots of international music.
Partnership –record companies need to realize they are a tool to increase customer signup and reduce churn (retention).
BUT labels should not just be a consumer experience – the labels need business relationships that are transactional, so the artists and composers can get paid. The content business should receive a fair share of the successes of the telcos. This will create a virtuous circle that helps both businesses to build.
Need to work on experience, and the value proposition – if “all you can eat” (i.e. Nokia’s comes with music) is not relevant, there is a need to come up with other ways of making it simple for the consumer.
OUR CONCLUSION
OK, let’s look at the business reality. Telcos have a great business model, have over half of the world paying them significant fees every month for a service that has become the most essential part of our lives as modern consumers. On the other hand, we have a bunch of businesses that have spent the last 10 years trying to stifle and snuff out competition, rather than embracing a new paradigm. They are largely broke, irrelevant and business model-less. This speech seems different to the one in 2008 – last year, Lachie was angry and bullish, this year he is resigned and desparate. The message I get is:
Please telcos, don’t go without us…