How piracy saved the Asian music industry

In the early 2000s, the western music industry was reeling thanks in no small part to the likes of Napster, Kazaa and a whole host of similar file sharing software that made it easy for the masses to freely exchange their music collections. At its peak, Napster had 26.4 million users, and there is no doubt that the average user probably downloaded somewhere in the region of 10-1,000 tracks, which, I’m aware is a broad range, but either number is still a significant amount of sales that were lost.

While loss of these single and album sales was a big blow to the western music industry financially, what is more significant is the change in listener mindset it created. The average music consumer from those that were in high-school and college between the mid-1990s and mid-2000s onward have been changed forever. We (Yes, I do include myself in that generation) no longer attach the same financial value/cost to musical product as the record labels had us pay in the pre-Napster days (which was typically £15/$25 in the UK for an album).

Western record labels have spent the best part of the last decade trying to figure out how they’re going to survive financially, creating new business models, while also trying to combat most online innovations that help spread music. They are scared.

The attentive reader will have noticed that every mention of the music industry has been of the “Western” industry until now. What about the Eastern record labels and musicians? The truth is, most Asian countries have always had easy and cheap access to pirated content. Even though record labels sold product at lower prices, piracy continued. Pirated albums were, and remain pretty openly sold in certain Asian markets, and they usually retail for just a couple of US dollars.

But why aren’t the Asian record labels as scared as their western counterparts? The reason is that because piracy has been so prominent in Asian markets for decades, the music industry didn’t focus its business model on the sale of music (whether tapes, CDs or MP3s) alone. For a long time, Asian record labels have known that the way to profit was to use an artist’s music primarily as a platform to create fame and a fan base that would enable the following:

• Large stadium tours, which fans are willing to pay for.
• Using the artist’s stardom to expand into other, paid, media roles – starring in movies, hosting TV shows etc.
• Acting as a spokesperson/model for multiple brands simultaneously.
• Creating original songs and music videos about brands’ products.

The last 2 items in the west have typically been called “Selling out”, but it’s never really been seen that way in Asia. Perhaps the level of music “idol” (i.e. artist) fandom is more extreme, with fans simply happy to get any piece of an artist that they can. Or maybe it is that fans accept that their favourite musicians need to make a living somehow, and that includes shilling for virtually any brand.

While western artists have dabbled in the above over the decades, its only been in the past couple of years that western labels are aggressively seeking out and planning these deals, particularly as they try to coerce artists into signing 360 deals which cover an artist’s revenues on virtually all fronts.

It will still probably around 5 years before western audiences are fully accepting of their favourite musicians as brand spokespersons, but it is coming. Luckily, piracy saved the Asian music industry, and gave it a 20 year head start!

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