The COVID-19 pandemic made it impossible to meet for the 11th Vienna Music Business Research Days at the University of Music and Performing Arts Vienna. Therefore the international conference on “Emerging Music Markets” went online and gathered conference guests from all around the globe to highlight the rising importance of music markets in Asia and Eastern European.
The first online event on September 21 was the 10th Anniversary Young Scholars’ Workshop, which offered a forum for junior scientists to present their master and PhD projects to renowned international music business researchers. Young scholars from Australia, Germany, Spain, Sweden and the Netherlands discussed their findings with their mentors’ and other workshop participants. At the end of the conference Laura Weinert of the Hanover University of Music, Drama and Media was rewarded for the Young Scholars’ Workshop best paper entitled “Music in the mediatised everyday life of young people”. Her contribution is considered to be published in the International Journal of Music Business Research (IJMBR).
The Conference Track Day on September 22 gathered music business researchers from Australia, Austria, Germany, the Netherlands and Sweden, who presented their research findings on a broad range of music business topics, such as digital ecosystems for micro music businesses, the role of fandom in artist promotion, the power of reputation of festival directors, the digital transformation of value creation in the music business and the impact of the COVID-19 pandemic on music consumption and the live music scene in Germany (see program).
The online conference continued on September 23 with the Invited Conference Day focusing on the main conference topic “Emerging Music Markets”. Bernie Cho, President of the Seoul-based artist & label services agency DFSB Kollective, gave a keynote on the “Hip Hype Reality of the Korean Music Market” and highlighted the hugh economic impact of K-Pop for the Korean but also international music markets. Philipp Grefer, who is the founder of the Beijing-based Future-Think-Tank WISE explained it the next keynote how the Chinese music market developed from more or less nothing into the seventh largest recorded music market worldwide. In the following talk, Achille Forler, who is the managing director of the Indian-based sound design agency Music Curator and member of the advisory board of the Indian Performing Right Society, highlighted the specifities of the Indian music market that is still dominated by the big Bollywood film companies. They all joined Weining Hung, co-founder of the LUCfest in Tainan/Taiwan for the panel discussion on “Emerging Music Markets in Asia” and discussed the growing economic but also cultural impact of Asia in the global music market and music industry.
The virtual afternoon conference session was devoted to Eastern European music markets. Dartsya Tarkovska, founder of music consulting agency Soundbuzz and co-founder of Music Export Ukraine, explained how the Ukrainian recorded music industry is structured and analysed the music streaming market in the Ukraine. Ania Kasperek, who founded the all-female Chimes Agency in Poland, highlighted then the specifities of the Polish music market, before Carina Sava of the Agentia de Vise in Bucharest showed how the Romanian music market works. In the following panel discussion on “Emerging Music Markets in Eastern Europe”, all three speakers highlighted again the differences and similarities of music markets in Central and Eastern Europe and discussed the future potential of these markets.
11th Vienna Music Business Research Days 2020
“Emerging Music Markets”
YOUNG SCHOLARS’ WORKSHOP ON SEPTEMBER 21st (program)
CONFERENCE TRACK DAY ON SEPTEMBER 22nd (program)
Edlom, Jessica & Jenny Karlsson, Karlstad University, Sweden: “Hang with me – fandom, brandom and the experiences and motivations of music fans”, presentation
Flath, Beate & Maryam Momen Pour Tafreshi, Paderborn University, Germany: “Cancelled gigs, closed venues and running costs. An explorative investigation on the relation of professional self-concepts of local event managers of live music in Ostwestfalen-Lippe (OWL) and their strategies to face the corona crisis”
Kalser-Gruber, Martina, Danube-University Krems, Austria: “The power of reputation. A case study on the artistic directors of Austria’s music festivals”
Morrow Guy, University of Melbourne, Australia: “Designing the music business. Design culture, music video and virtual reality”
Mulder, Martijn & Erik Hitters, Erasmus University Rotterdam, The Netherlands: “Live is live? An analysis of the differences between motivations for concert and festival attendance”
Murphy, Shane Terry, Torrens University, Brisbane, Australia: “Establishing a digital presence in the music industry: constructing the digital ecosystem for a micro music business”, presentation
Murtaza Ali, Muhammad, Jenny Karlsson & Per Skålén, Karlstad University, Sweden: “How has digitalization transformed value creation in the music industry?”, presentation
von Ammon, Diethard, Ludwig-Maximilians-University Munich, Germany: “The digitalization of music and the effects of Corona”, paper
INVITED CONFERENCE DAY
„EMERGING MUSIC MARKETS“ ON SEPTEMBER 23rd
The Invited Conference Day was opened by a welcome address of Ulrike Sych, Rector (president) of the mdw – University of Music and Performing Arts Vienna. She pointed to the current exceptional circumstances under which the 11th Vienna Music Business Research Days took place this years and welcomed students, music business researchers, business professionals as well as policy and law makers to discuss the recent developments in the music business and especially in emerging and growing music markets.
The first keynote speaker was Bernie Cho, President of DFSB Kollective, a Seoul-based artist & label services agency that specializes in providing digital media, marketing, and distribution solutions to 600+ Korean Pop music artists. He explained, that the Republic of Korea, which has a population like Spain, is – according to IFPI statistics – the 6th largest recording music, streaming and physical market in the world. Bernie highlighted 6 reasons, why South Korea ranks 6th:
(1) Cultural technology: South Korea has not just the highest Internet penetration, but also the fastest Internet of the world. The smartphone penetration is also exceptional high and Koreans are social media enthusiasts. 84.8% of Internet users pay for music subscription services and the number of paying subscribers of 17 million is far higher than in Japan or Germany.
(2) Premium DSPs: South Korea has very large and influential domestic music DSP’s such as Melon, Genie and Flo. These three top DSPs have a combined market share of almost 79%. The Korean DSPs are also very different from their foreign incumbents such as Spotify, YouTube and Apple Music. They do not just distribute digital music, but produce musical and other entertainment content. They invest in musicians, have partnerships with recorded music labels and act in some respect as labels and artist service agencies too. The Korean DSPs behave like “frenemies”, that means despite they a market competitors there is a high degree of collaboration too.
(3) Independence: The global recorded music majors have just a combined market share of 11.8% in the Republic of Korea. The Korean indie labels does not just have a joint market share of 88%, but they also dominate the Korean music charts (GAON Top-100) with a share of 83% – of course with K-Pop hits. There are only a few foreign artist & label service companies (e.g. The Orchard) that operate in the Korean market, which is dominated by the big K-Pop agency such as Big Entertainment and SM Entertainment.
(4) Full-stack business model: The Korean music labels operate a full-stack business model. 75% of their revenue comes from artist services and 25% from recorded music sales.
(5) Investment policy: They closely collaborate with the DSPs, which invest in music companies as well as in musical content. In 2019, the DSPs invested US $80m in acquisitions and – depending on the company – US $17-22m in content, which is significantly more than the investments by the majors in South Korea.
(6) K-Pop boom: The K-Pop agencies dominate the booming K-Pop market. They generate much more with K-Pop in Korea than all global music majors combined. The two largest agencies, Big Entertainment and SM Entertainment earn more with K-Pop than the total of recorded music sales in India.
Philipp Grefer gave then a presentation on the Chinese music market. Philipp is the founder of WISE – The Future Think Tank, (www.wisenotwise.com) in Beijing, which brings together thought leaders of the creative industries, science and tech to discuss how we will and should live in the Future. He has been at the forefront of China´s music and events industry for over a decade.
Philipp Grefer described the Chinese economy as highly technological and fast growing with more than 1bn inhabitants and a growing middle class of 550m, but very political with a strong influence of the Chinese Communist Party (CCP). This is also true for the music economy in mainland China, which was the 7th largest recorded music market worldwide in 2019. The average music consumer in China is young and well educated with a preference for music streaming. While digital music services are usually licensed, the physical recorded music market is still a pirated market (99% piracy rate). The live music market, especially the festival market is fastly growing, whereas music publishing is more or less non-existent, but emerging.
However, the Chinese music market is not about music, but about data. The large players on the music market are conglomerates using music as a content to enlarge their user base to get access to more data. Tencent Holdings Ltd. is the most influential actor in the Chinese music industry. Tencent entered the music business in 2016 by acquiring 61.6 percent of the Chinese Music Corporation (CMC) that was founded in 2012. CMC had purchased the music streaming provider Kuwo Music in 2013 and bought a controlling stake of Kugou Music. After the acquisition Tencent Music Entertainment (TME) was formed, which also has the music streaming app QQ Music, WeSing and Ultimate Music in its portfolio. QQ, Kuwo and Kugou have an estimated market share of music streaming services in China of more than 50%. In 2018, TME acquired almost 10% of the Swedish music streaming company Spotify in a swap deal and went public at the end of the same year with a market capitalization of US $21,3bn.
In 2013, the gaming and technology conglomerate NetEase Inc. lauched NetEase Cloud Music as a freemium music service, which received US $107m in a series A financing round. Two year’s later, the e-commerce giant Alibaba Group invested US $700m in NetEase Cloud Music in a further funding round. Alibaba, however, itself operates the influential music streaming app AliMusic, which is a merger of Alibaba Planet and Xiami Music, which was acquired in 2013.
The music companies of Tencent, NetEase and Alibaba control the Chinese music market and left little room for foreign incumbents such as Spotify and Apple Music. Compared to the the Chinese music services, they have a neglectable market share. Therefore, the recorded music majors, Universal, Sony and Warner, have to license their catalogs to TME, NetEase Cloud Music and AliMusic. Until recently, it was usual that the majors had exclusive licencing deals, e.g. Warner Music Group and Sony Music Entertainment with TME. But in 2018 the indie licensing agency MERLIN got non-exclusice deals with TME, NetEase and Alibaba, which became a blueprint for the non-exclusive licensing agreement between Universal Music Group and NetEase Cloud Music in 2020.
Another important player in the Chinese music market is the video-sharing app Tik Tok owned by the internet technology company Bytedance. In 2017, Bytedance bought the lip synchronisation app musical.ly and merged its Douyin service with Musical.ly. However, India as well the USA banned Tik Tok and other Chinese apps allegedly threatening the countries’ national security by collecting data. Therefore, Bytedance is pressured by the US government to sell Tik Tok US to a consortium of Walmart and Oracle. Thus, Tik Tok is a good example for the geopolical implications of China’s music industry.
Achille Forler gave the third keynote on the “Indian Music Market”. Achille is the founder and managing director of the Indian-based sound design agency Music Curator and member of the advisory board of the Indian Performing Right Society. He knows the Indian music industry for 25 years, when he founded the India’s first full-service music publishing company in 1995, which was acquired by Universal Music Publishing in 2012.
Achille explained that India initially had just one national broadcaster for decades. Therefore, people went to the cinema also to listen to music. Thus, the Bollywood film industry became the most influential player in the Indian music industry too and is still highly relevant. Until the 1990s, the Bollywood film studios were the main music distributors. However, the first indie revolution in India’s music industry was triggered by Bollywood film stars, who started to perform and record music outside the studio system of the film majors. The advent of music streaming brought forward the second indie music revolution. Within 5 years CDs ceased to exist in India and was substituted by music streaming services. In 2017, the Indian Telco Jio entered the music streaming market with a freemium and low price strategy to conquer the market. A year later, Jio purchased the music streaming service Saavn, which was founded in 2006 to merge it with JioMusic to JioSaavn. The other domestic Indian streaming service is Gaana, which was launched by Times Internet in 2010 to provide both Indian and international music content. In 2018, Tencent invested US $115m in Gaana to get access to the Indian music streaming market. Despite the growing influence of JioSaavn and Gaana international music streaming services such as Apple Music, Amazon Music and Spotify dominate the Indian streaming market with considerable market shares. And the Bollywood film studios are still highly relevant, since they provide the main musical content for the streaming services. The international music majors, therefore, are not an important factor in India, since they do not produce films.
The live music industry in India is less developed, since there are few concert venues due to extremely high rents in the metropolitan areas. Thus, the live scene in India is dominated by local promoters, some national but most operating on a regional basis.
In the following panel discussion, the speakers highlighted again the specifities of the Chinese, Indian and South Korean music markets. Weining Hung, co-founder of the LUCfest in Tainan/Taiwan) contributed the overall picture of the the South East Asian music markets including Thailand, Malaysia and Indonesia. All these markets are highly influences by the international music majors, but the relevance of the Chinese music companies is fastly growing.
In the afternoon, the emerging Eastern European music markets were highlighted by presentations of Dartsya Tarkovska (Soundbuzz and Music Export Ukraine, Kiev), Ania Kasperek (Chimes Agency, Poland) and Carina Sava (Agentia de Vise, Bucharest, Romania).
Dartsya Tarkovska highlighted in her talk the Ukrainian music market. After the collpase of the Soviet Union, several indie labels such as Comp Music, Moon Records and Lavina were founded in 1990s. Later Best Music and artist and label service companies such as Mamamusic and Mozgi Entertainment also joined the market. In addition more than 60 DIY indie labels operate in the Ukraine in genre niches. The music streaming market, however, is dominated by the international streaming services Apple Music, Spotify and Deezer. They offer comparably affordable subscription tiers for monthly 5-6 Euros. Spotify launched its freemium service in 2018. It was a great boost for the Ukranian musicians and also reduced music piracy. A recent music consumption study highlights that just 7% of music consumers use only pirated musis services whereas 13% use exclusively legal offerings. Nevertheless 80% of the respondents declared that they use both pirated and legal services.
In the next presentation, Ania Kasperek analysed the Polish music market. In 2019, the recorded music market in Poland had a volume of US $115m. Music streaming accounted for 27.7% of all music sales, whereas physical sales were still relevant with a market share of 44.6%. The well-known international music streaming services also operate in Poland: Spotify, Tidal, Apple Music and YouTube. Nevertheless, Poland has a strong domestic market with relevant indie labels such as Agora, Kayax and Jazzboy Records, MTJ Agencja Artystyczna, MyMusic, Step Records, Asfalt Records and Mystic Production. The Polish album charts are therefore dominated by Polish acts and especially local HipHop/Rap is very popular.
Video stream (not available)
Carina Sava rounded up the overview of the Eastern European music markets by highlighting the Romanian music business, which is mainly driven by concerts and music festivals. Romania currently hosts 5 larger music festivals in big cities such as in Bucharest, Cluj and Varna, which also feature international acts. Thus, the main income source for Romanian musicians come from live music events. Recorded music plays an inferior role. Universal Music is the only music major that is active in Romania, which leave market niches for domestic indie labels. Nevertheless, the Romanian music charts are dominated by global repertoire. The streaming market in Romania is also less developed and YouTube is the main source of digital music consumption with a market share of more than 50%. Spotify, however, launched its freemium service in 2018 and triggered a similar boom of music streaming like in the Ukraine.
In the following panel discussion on “Emerging Music Markets in Eastern Europe”, conducted by Peter Tschmuck, the three speakers highlighted the similarities and differences of the music markets in the Ukraine, Poland and Romania and assessed the future market potential in Eastern European countries.
Traditionally, the 11th Vienna Music Business Research Days were closed by announcing the winner of the Young Scholars’ Workshop. Laura Weinert from the Hanover University of Music, Drama and Media was awarded for her paper entitled “Music in the mediatised everyday life of young people”. Her contribution is considered to be published in the International Journal of Music Business Research (IJMBR).
*All photos are screenshots from the online presentations and panel discussion.
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