It’s no secret that Asia has become a powerhouse in the music industry with India and China at the fore. In 2021, the region saw double-digit revenue growth, and it is set to expand even more in 2022. According to the annual global music report released by the International Federation of the Phonographic Industry on March 22nd, Japan – Asia’s largest music market – saw a resurgence last year with 9.3% growth. But excluding Japan’s contribution, the rest of the region saw revenues grow by an impressive 24.6%. With 49.6% of global physical sales, it’s clear that Asia is becoming a global heavyweight.
The catalyst for growth in the region has been unprecedented streaming numbers in countries like India and China, where the population figures drive content production and consumption. According to Shridhar Subramaniam, President of Corporate Strategy and Market Development for Asia and the Middle East at Sony Music Entertainment, he explains the “Three pillars” for growth in the region.
“The first is an increase in subscription numbers which is the primary driver of growth in mature markets, like China and Korea, similar to Western markets in that regard. The second is advertising revenue growth. This plays massively into Asia’s favor because of the sheer scale of population and the details of our demographics. India, for instance, is YouTube’s biggest market in the region, followed by Indonesia, Thailand and then Vietnam. Large percentages of these populations are wallet-poor but attention-rich. They’d rather pay for a service by watching some ads rather than via a financial subscription. The third is social media – be that TikTok, Instagram, YouTube Shorts or Facebook. India is the biggest market for Facebook worldwide. And these are all platforms that are now heavily into music.”
He adds, “I think new ways of content creation and content consumption come out of Asia, more so than Western markets; TikTok is a great example of that. And Korea has an amazing level of fan development and fan engagement that no territory in the West has come close to replicating.”
Devraj Sanyal, Managing Director & CEO, Universal Music Group India & South Asia echoes Asia’s influence on the global market.
“India suddenly, in the last 18 to 24 months, has become a very key market. We are seeing very strong growth. Why? Because internet penetration is ridiculously high, and we’ve got the world’s cheapest data. If you look at it from that perspective – a healthy market, massive growth, cheap data, huge penetration, there’s no way to go but up.”
Sanyal describes his approach to the growing Indian market as “hyper-localization”, with a “multi-label, layered system” that caters to the incredibly diverse music ecosystem. He continues, “It’s about different labels talking differently, with their own socials, channels and audiences. As record labels, we have to understand the people, we have to listen to what they want, what they’re seeing, and what they’re feeling, and then work across these multiple verticals. “We must have a data and analytics team in order to understand the pulse of every Indian state, language and dialect. To be authentic to the native mindset is so important. “Ultimately we want to shape culture through the power of artistry. How do you shape culture? You have to dive deep into the culture, understand what the culture is talking about. You have to listen. That’s what we’re doing in India”
According to the report, China is the world’s sixth-largest music market, up from seventh in 2021. The worldwide music industry earned $25.9 billion in revenue last year. Paid subscription streaming income increased by 21.9 percent over this period. At the conclusion of 2021, there were 523 million paid subscription accounts users. For the first time in 20 years, there was growth in the physical market. Revenues increased by 16.1% to US$5.0 billion. The revenue from CDs grew for the first time in a decade, with strong engagement in Asia. At the same time, interest in vinyl continued to grow, with revenue increasing by 51.3%. Record companies are working to drive this continuing growth for the broader music ecosystem. With local teams and expertise located around the globe, they have invested in local artists and genres and are supporting their development across their markets and beyond.
Adam Granite, EVP of Market Development for Universal Music Group shares his excitement about the growth in China: “China’s a great example of where we now have what we refer to as a multi-label structure. You need to have multiple repertoire centers, multiple labels in a market at a certain scale or size. Simply put, you can’t just have one creative team responsible for all the requirements that a developed and robust market needs. Much like you see in established markets like the US or the UK, you can have different labels with different identities, attracting different types of artists in a very diversified way. Last year, we announced the launch of several labels in China which is very exciting as we see it continue to develop as a market.”
One of those labels is Universal Music Group’s Republic Records China. Tony Wen, the Managing Director explains: “Our recent expansion into China provides both robust support and tremendous resources to build the local music ecosystems on the ground. “Our main priority is now fully focused on both signing local artists and building a team of people that have the knowledge and understanding of the local culture. Our team also has access to the local network, which is essential to understanding the musical landscape we are working in.”
For more information about the global music industry visit the IFIPI and read the Global Music Report 2022.