More Filipinos listening to songs, downloaded, uploaded music online

Listening to songs, music upload / download
increased in 2011

In the Digital Philippines 2011 Yahoo! - Nielsen Net Index report, Filipinos listening to songs in music websites is on the rise (45%). There is also an increase among users downloading and uploading music online from 2009 (25%) to 2011 (37%).

"Pa-copy naman... Pahingi ako niyan.. Send mo sa akin..."

I think the Internet has really change our attitude towards music. If you want to hear it and have a copy of it, you'll likely find someone who can send you one for free or there is a resource out there online where you can download it too. Another way is to record the audio out of those MTV and enjoy it.

Why is this so? Those who voraciously access local music entertainment content are in the 10 to 29 age group. A segment who likely did not grew up buying albums but liking singles instead.

Should they decide to purchase online, most accept payment through credit card or Paypal. A facility that is not necessarily accessible to this age group - so forget iTunes being a big at this time.

For the age group 30 and up, there is a lot of resource online already that fosters the music sharing culture. But for those who can afford, am sure they will still prefer to buy a copy online. I won't surprised though if that is less than 1% of the market.


Piracy overrated?

Industry losses due to piracy is estimated to be at 15 billion pesos. Around 10% to 15% of this is music piracy which is P1.5 to P2.2. billion a year. This is a combination for both foreign and local content - I assume.

As for the local music industry, I don't think the figures are high. In reality, how many new artists and albums gets released in the Philippines each year? How many Pinoys will really go out of their way to hunt down old music of their favorite Filipino artist?

Sometimes, you also don't need to download anymore. Just go to YouTube and watch / listen to your favorite artist online.

Selling Music Online and Marketing Royalty-Free Music

In reality though, purchasing music online is not a top priority of a user needs and wants. Therefore selling music these days needs to be marketed and given differently to the consumer - with fun and cool factor in. Some thoughts:

1. Buying an mp3 version of a music over the counter or a website. Simple as it may sound but it is too complicated to buy online music nowadays. Can I just purchase a specific song I like via a Multiply store? (seriously)

Encourage people to buy music online with more bang in the buck. This can be special privileges such as winning a concert ticket or freebies.

Make users feel proud supporters of online music. It can be a cool identity type, like being part of a community, and not the nagging one - "no to music piracy" usual slogan.

2. I have seen commercial establishments now investing in royalty-free music to avoid being run after by music associations for playing commercial music. A friend in the hotel industry pays a fixed sum every so often to a person who compiles royalty-free music, the good ones, that can be played in hotels.

http://www.podomatic.com/directory/House

I hope that person has a site online, whoever he is.

Have subscribed to podcast of various DJs giving their royalty-free house music mixes for free. Although not all gives the kind of sound you like.

For these instances, you need a Music Maven who can spot the good ones legally, pay for it (fee or donation), and give it to their clients.

I think some will be willing to pay a nominal fee just to receive that download link to get a weekly or monthly music fix.

Stop blaming the consumers

Instead of blaming the consumers, the music industry has to look at itself and see whether they are doing a good job of serving their customers. Whether they are able to adapt or not in these changing times.

I miss the old days when music outfits are independent or not owned by media networks. There was a vibrant and competitive market space then.

But when media networks start owning their own music recording outfits and radio stations, priority has shifted and focus given to their in-house artist and brands. It is like a monopoly of sorts.

Looking at my 2008 write-ups below, unfortunately, not much has change. I hope our new breed of entrepreneurs, ex-music artist or not, will give a solution that may not only apply to the Philippines but to other markets as well having the same predicament.

Previous write-ups:

• Potential of online music in the Philippines
• Buying Filipino music download online
• Music recording and publishing in the Philippines
• Piracy and its impact on Philippine music industry

Piracy and its Impact on Philippine Music Industry

Based on Danny Yson's report:

• The Philippine music industry was a P2 billion thriving industry, selling local and international artist songs, before the vicious tentacles of music piracy choked it to near collapse starting year 2000.
  
• It is estimated that the pirate audio disc piracy was a P1 billion a year illegal business while the legitimate industry has dropped by 25% in the year 2000.
  
• In 2001 alone, sales plummeted by 42.5% because of piracy.
• The loss of revenue in the local music industry continues to date.
  
• As an indication of poor sales, Philippine Association of the Record Industry (PARI) certified gold and platinum awards given in 2001 were only 18 compared to 35 in 2000.
  

The PARI has also reduced the required sales units for a gold record to 7,500 units from 20,000 units for international repertoire and 12,500 units from 20,000 units for OPM. There are is an average of 15 to 20 albums hitting a gold record while up to 3 albums may reach platinum in a year these days.

In the early years of music up to 2003, majority of records sold is from international artist pegged at 70% while OPM sales is only 30% at that time. However, the campaign for Original Pilipino Music (OPM) and the popularity of bands resulted to a market shift. Majority of sales today is OPM pegged at 70% while international labels is at 30%. (for further validation)

The local music industry has not grown much since the year 2003 where sales have not even reached P1 billion since that time - as the music piracy business is eating most of its market. Therefore, today in the year 2008, the local recording music industry is a struggling sector earning revenues up to P840 million a year from CDs, mobile phone tones, and Internet music download purchases. (for further validation)

The pirated music sector, victimizing local and international music, is growing at 40% to 50% per year and earns around P2 to 3 billion a year on local pirated music in terms of duplication, non-payment of performance rights, print rights, and digital performance rights. (for further validation)

Music piracy has shown that people love music but may not necessarily find it worth paying to the usual prices it is marketed today. Unlike movies and games where a person needs to have a player and set a time to watch, music can be heard almost anywhere and mostly for free (radio, coffee shops, bars, establishments, online radio, among others).

In addition, pirated music is so affordable that even artists that are not that popular are being purchased by Filipinos out of curiosity at the time of purchase. If no pirated CDs are available, it is still possible that pirated music buyers will not buy legitimate copies in the first place. Therefore it can be assumed that a big percentage of pirated music customers are not really the paying customers.

Music can indeed be heard everywhere but somebody (record label, radio, tv, bar or malls) paid for its cost. It is hard and perhaps even unfair to go on a price war with pirates as they do not incur expenses other than manufacturing cost. They did not spend money on production and marketing. As a result, record labels are reducing the number of releases. Just a few years back, big record labels will have 12 albums scheduled for release in one year. Today, most labels only have 5-6 albums planned releases for the year. While 1 to 3 big players will likely launch up to 12 albums a year.

We heard of international popular artists leaving their record labels to go on their own, partner with retailers, concert organizers, and even online music sites. This is caused by the dwindling sales of CDs and as a result, everybody's looking for other revenue streams. CDs are now being bundled with concert tickets, merchandise, among others. Independent artists have the freedom to do whatever they want with their songs and albums such as selling whatever price the consumer is willing to pay. In the end, music can be made cheap but it's not free.

Of course, if the artist has not established a following or name in the industry, the above options may not possibly work out without working with a record label. Especially if they want to profit from their music.

Minimize or eliminate piracy
In the eyes of intellectual property rights advocates, possessing a pirated cd/dvd or whatever copyrighted works should be criminalized. If nobody buys pirated work, then the pirates will stop or reduce their production. However, that's wishful thinking as eradicating piracy is a tall order but tougher Intellectual Property Rights Law implementation can perhaps minimize it.