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Asia at the Cutting Edge?
Berkman Center Lunchtime Talk SeriesMay 29, 2006
Eric Priest, Berkman Fellow© 2006 Eric Priest
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“Today, Asia leads the world in so many aspects of digital technology that it is no exaggeration at all to say the whole world is now watching you . . ., and we all have a great deal to learn from the experience.”
- John Smith, CEO, BBC Worldwide, CASBAA 2006
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Why all the excitement?
Much revolves around the high rate of technology adoption Asian economies/consumers fully embraced digital South Korea: broadband in 62% of households China: 400 million mobile subscribers; 65 million broadband
subscribers 20% of mobile revenue is generated from
entertainment
Piracy
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Mobile distribution all the rage
Monetizable! “Hip” factor Massive customer base Secure, established billing
Personalization Ringtones Ring back tones Mastertones
Enables the re-monetization of a song
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QuickTime™ and aTIFF (LZW) decompressor
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Source: Jay Kim, WiderThan (Music Matters Asia 2006 PowerPoint Presentation)
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December-03 June-04 December-04 June-05 December-05
Global File Sharers (in millions)US File Sharers (in millions)
Source: Digital Music News/BigChampagne
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Chinese entertainment co’s competing with online piracy Taihe Rye Music
Only sell music from most popular singers
Deal with search engines: 2 week head start
Lots of value-adds (art, lyrics, karaoke version)
Hook the hard core fans Partner with artist, bundle
music products + services
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Chinese entertainment co’s competing with online piracy
Jingwen Records Create popular music portal (Koook.com)
Promote artists and encourage user
submissions
Catalog of 20,000 user-submitted songs
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The internet: user-created content
The Back Dorm Boys!QuickTime™ and aSorenson Video 3 decompressorare needed to see this picture.
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Song of Pig - Over 1 Billion ServedPig, you have two holes on
your nose, when you catch cold, you are snorting
Pig, you have black eyes which we cannot see beyond;
Pig, you have two big ears, and you cannot hear that I'm cursing you silly
Pig, you have a curling tail which you cannot run without
Pig head, pig brain, pig body and pig tail, you are a good baby who eats everything
Every day you won't wake up till noon,and you never brush your teeth and you never fight
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The internet as source of alternative media
Hu Ge: The Case of the Steamed Bun Murder
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How is Asia at the digital cutting edge? Unbundling digital rights Blurring the line between content creator and
consumer Video Music Blogs
Flexibility/adaptability in business model Multiple revenue sources Avoid tragedy of the anticommons - retain more rights Facilitate licensing Cultivate the hard core fan Piracy as promotion
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How is Asia at the digital cutting edge? Have really monetized the consumer
“expression” factor Convergence with other forms of online
entertainment (i.e., gaming) Artists taking control; moving straight to
deals w/ distributors Cultivating the hard-core fans (build a
sustainable business model on the 1/3 of fans that will pay)
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Concerns with the emerging Asian model? Extremely hits-centric
Long Tail left on the table (except for Karaoke - maybe)
“Phones Matter, but does music?” - Highly technology-focused Distribution focused
Are various digital revenue sources sustainable?
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In what ways is Asia behind?
Value adds Searchability Recommendation engines Mobile sphere vs. online sphere
Lack of differentiation between SPs/lack of supporting technologies
Monetizing the digital Long Tail Content-based social networking Interoperability
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Anything the West can learn?
Flexibility - let market conditions dictate business models (facilitate, not control)
Embrace user-created content Bundling - products + services Be aggressive about experimenting
with alternative business models Don’t fear digital!