How about some more numbers? (FYI, the beginning of the conference was largely putting the 2009 Asian market into context from a numerical perspective). We put the second and third speeches together. First up was
MARCEL FENEZ (PWC Entertainment Global Practices Leader – quite some title). His numbers were as follows:
- Global Consumer Spending on music will decline @ 2-3% compound per year for the next 5 years. In Asia, growth will be flat, and will account for 33% of global consumption by 2014.
- Japan will make up 75% of the region and will overtake the US as the biggest consumer of recorded music in 6 years (75% of the market – we imagine China makes up .00001% of the same market).
- By 2013, 60% of consumption will be via digital, 83% of that digital consumption via mobile.
- Physical: is there a bottom or is the floor actually 0? By this, we suppose the answer will be close to 0 – CDs, like vinyl will become the domain of the obsessive collector.
- MOBILE – Asia Pac leads the world (with 58% of consumer spending) and Japan leads Asia with 86% of region.
- 95% illegal downloads globally, 99% in PRC.
WILL BAO BEAN (Will heads up a big fund backed by Softbank and headquartered in China, but active all over Asia) talked about the mobile music market in China:
- There is now more competition in China in the mobile space. The government has created quasi competition by allowing China Unicom and China Telecom to enter the mobile market. However, China Mobile still the big market leader.
- Advertising is growing.
- BUT paid download dead.
- The Baidu bugbear is overblown – Baidu “only” make US$7-10m from music (which still seems high, considering all they are doing is pointing people in the direction of illegally shared files – anyway, we think this figure is probably on the low side).
- It has taken 10 years for geeks to get into bed with Music Moguls and actually get a music model working in any form online. To make the ad-driven model work (which is currently the great white hope of the industry), the industry needs ads. Brand manager/ marketing agency egos are huge (even in the context of music industry ego, which is saying something. The music industry must learn the language of the brand manager.
- The key is to get more revenue share from the carriers, and to this end, “the Enemy of your Enemy is your Friend” – the music industry should arm China Unicom and China Telecom in order to bring China Mobile to the negotiating table. Allow them to make their service efficient and compelling and force China Mobile to compete.
The insinuation here is that China Mobile is a horrible, horrible negotiating partner, and that this “competition” will be good for the consumer!
For some pretty indecipherable and confusing charts, check Will’s presentation here: