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Asia Perspective: Music and Film Companies, Friend or Foe?

A PERSPECTIVE FROM ASIA

In my teens and 20s, I burned through my wallet every month to listen to my favorite Japanese pop, buying cassette tapes and then CDs of singers such as Seiko Matsuda and Hiromi Go. Contrast that with today, in my 40s. I no longer buy many music CDs. The last album I bought was a few months back, and I hardly listen to it. My reason for not buying CDs these days: the weight of family commitment, business, and the lack of time. Further, I listen to the radio for free, which offers a variety of channels featuring pop, classics, contemporary, Asian, and so on.

Tightrope of IP Protection

We frequently hear of some music company or music association (typically managed by large music houses) going after teenagers for allegedly downloading music illegally through peer-to-peer networks. The reason given is protecting intellectual property (IP) of their artists.

First, my opinion is that legal actions should be a last resort. It is unpleasant to be threatened with legal action without any amicable mediation or discussion. The bitter aftertaste will stay a long time, and “word of mouth” means that aftertaste will spread to countless others. When harsh things happen, people often retain incredibly long memories.

Who’s to lose? The IP holders, since those affected will never be customers again. So although the premise of music organizations sounds reasonable, the pursuit of IP protection should be balanced by a sensible desire of achievement and not greed.

A finely tuned and granular pricing structure for music (and other audio-visual products) can work toward reducing the threat of hardcore piracy. For example, it is important to recognize that not every country has the same spending capability and habits as America. There are many Asians in the East who are still saving money for a rainy day. It amazed me to learn on CNBC’s “Suze Orman Show” that many Americans live incredulously beyond their means, with ballooning credit-card debt, heavy housing and car loans, and still expect to spend in the malls.

Luxuries, Not Necessities

Back to music and film products. These are really luxuries and cannot be compared to necessities such as groceries, food, education, or even fuel. So for an average Asian, family with a limited budget or income, music and film products — especially those overpriced ones — are not affordable. Many people work long hours and already have little time for their families. Therefore, even listening to music or watching TV is somewhat of a luxury. With free-to-air television and radio channels in many Asian countries, there is even less reason for purchase. The typical mass-market consumer of music and films might be enthusiasts, affluent adults, and even students. And students, save a privileged few, may also have limited budgets.

Pricing for the Markets

Therefore, since the GDP of every nation is different — and by inference the spending capability (and desires) of individuals — there should be very flexible pricing structures for music and film products in different countries. For example, in less-developed nations, even a software giant such as Microsoft would create custom localized versions of their operating systems at a much lower cost. Music and film organizations should think along the same lines, pricing products closer to the capabilities of local customers.

Also, Apple’s iTunes online store has been a huge success because it recognizes customers have very specific desires when purchasing songs. For example, I remember many of my purchased CDs and cassettes lying idle because out of 10-plus songs in a single CD, I enjoy only one or two songs. Therefore, music organizations should embrace such an idea more, by working closely with online stores such as Apple’s and bringing such stores to locations in Asia where online entities don’t yet exist. By pricing songs affordably and allowing singular purchases, music organizations will also reduce piracy.

An Open Heart

Anyone is more receptive toward a friend, and more defensive toward an enemy. Music and film organizations should take the stance of a friend and ally, and not an enemy. By working closely with consumers, prospects, the communities and even digital merchants, and relying less on lawyers, they may endear themselves to the paying and would-be-paying customers, rather than creating more rift. It is important to learn from Frank Buchman, “There is enough in the world for everyone’s need, but not enough for everyone’s greed.”

By Seamus Phan

Based in Singapore, Seamus Phan is
one of Asia’s leading thinkers and practitioners
in business leadership, Internet security, and marketing.

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