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  Industry Profile

Industry Profile: Jasper Donat

— By Larry LeBlanc

This week In The Hot Seat with Larry LeBlanc: Jasper Donat

The Asia Pacific Music Forum--Music Matters 2009--takes place in Hong Kong, June 2-4.

The 4th annual conference will focus on practically every business sector that music touches including: advertising, gaming, television and satellite networks, mobile, online, social networking, and live.

As well, there will be extensive discussions on how to tackle such regional issues as rampant music piracy and cross-platform licensing.

Asia is, perhaps, the most important region for the music business today. It may well be, in fact, on its way to becoming the epicenter of the international music industry.

“Asia’s time is now,” argues Music Matters’ president Jasper Donat, also co-founder and executive director of Branded, the Hong Kong-based media & entertainment marketing agency. “The world is looking at Asia to drive future growth through technological innovation and creative business modeling.”

Donat may well be right on the money.

The rise of music sales via cell phones? That happened in Asia first.

Record labels promoting artists via tie-ins with consumer products? Ditto

The introduction of the integrated 360-degree business model for artists? Ditto

As well, Asia’s copyright holders have struggled with wide spread music piracy long before P2P file-sharing exploded worldwide

Donat began his career in media and advertising in 1987 at Chris Ingram Associates (now Mediaedge:cia) in London before joining Eurosport in 1992. He moved to Hong Kong in 1995 to work for STAR TV’s Prime Sports (later renamed ESPN Star Sports), and then became vice-president sales & marketing at music and entertainment Channel V in 1997.

Donat co-founded Branded with Michael Denmark in 2001. The company has worked with such leading brands as Coca-Cola, Motorola, Canon, Cathay Pacific, Virgin, SonyBMG, Endemol, the Discovery Channel and with such acts as Celine Dion, the Black Eyed Peas, James Blunt, Alicia Keys, Coco Lee, and Barney the Dinosaur.

Although the Asian music market continues to face such crucial challenges as widespread piracy, the region is the world's biggest music market in terms of long-term potential revenue due to the sheer size of its population. And it is likely that the mobile sector will power that growth.

In contrast to the Western culture, Asian youth prefer to download their favorite songs on to their mobile devices rather than computers. At the same time, listening has exploded online, with both illegal and legal music downloads surging ahead while music piracy is worsening.

Capturing the exploding mobile market will be one of the main focuses of Music Matters 2009.

According to Chinese government figures, about 84% of China’s nearly 300 million Internet users download music over the Internet, and most of it is used for cell phone ring tones.

In April, 2008, China Mobile started its testing of the third generation (3G) of mobile communication in 8 cities (Beijing, Shanghai, Tianjin, Guangzhou, Shenzhen, Qinhuangdao, Shenyang and Xiamen). While test results have not been made public, it predicted that the 3G usage will surge up to 100 million in China by 2011.

Meanwhile, Google, partnered with a Chinese company,, and 140 music labels, including EMI Group, Sony Music Entertainment, Warner Music Group and Universal Music, have joined together to launch Google Music Search, giving Chinese Internet users free downloads of some 350,000 songs. Eventually, the service will offer some 1.1 million tracks

Google, which has no plans to offer the service elsewhere, hopes to build traffic and win advertisers. Record labels, instead of earning money from downloads, will share advertising revenue with

Most Chinese users now receive their music for free. According to the International Federation of Phonographic Industries (IFPI) 99% of the music downloaded in China (largely through the Baidu website) violates copyrights. The multinationals have unsuccessfully sued Baidu, trying to force the company to stop linking to unlicensed sites. Baidu has said it is simply a search engine and does not engage in piracy.

A number of Western music industry figures, including Sire’s Seymour Stein, remain bullish about opportunities in India--with its English-speaking population that could facilitate growth more quickly than in China.

Mobile penetration in India recently hit an estimated 250 million subscribers, and is projected to hit 500 million by the end of 2010, when broadband Internet connections should reach 20 million.

Asia’s time is now?

Asia is an amazing place. There’s the diversity of India, the scale of China, and the (sales) volume of Japan. There is an incredible hot bed of talent that is married to ridiculous piracy levels that are clearly not going away. You then combine that with the new technologies that are being devised and designed here.

Asia seems farther along the road in terms of being a technological-based marketplace.

Okay, there’s a bump in the road with the global economy right now. Everybody is looking into themselves trying to find new ways of surviving through these times.

If any creative business models are going to come out of anywhere they might come from a new frontier like Asia rather than in North America where templates are (based) on previous models. There’s a reluctance to change in the Western world. There seems to be more of an openness to change in Asia.

With piracy the way it is here, the only way to survive is to be creative. That’s being creative in your business model, creative in your collaborations, and understanding and embracing technologies. In some cases, although people will never admit to it, it is also understanding and embracing piracy.

Social networking is becoming a big word in the U.S., and Europe but it has been here for years. Everybody (in the international music industry) is talking about mobile music now. It’s been mobile in Asia for years as well.

Only a handful of Asian artists are known in the West. Korean stars like Rain, Se7en and BoA have lately been able to secure label or distribution deals in the U.S.

You’ve opened a very interesting topic. Not if, but when will an Asian artist successfully have a career in the West? It’s going to happen. It is going to happen soon. It will be people like Rain who’ll lead that charge.

[In 2006, Time magazine named Rain as one of the "100 Most Influential People Who Shape Our World."]

Does the full roll-out of Google Music in China push the issue of enforcing intellectual property rights there?

We are waiting to see what’s happening with Google Music. It is the first time that I’ve seen the entire industry come together and say, “Hey, This might work.” We all have to get our heads around what it means for the industry.

As I see it, Google Music offers the industry a safe solution that is funded (by advertising). And it doesn’t try and change the way consumers behave. So it embraces the consumer, and embraces the (music) industry. The advertisers pay for it, and get bang for their buck. And, it is in a market where the industry isn’t (going to be further) hurt. Eventually, artists will get paid. It’s got to be seen as a win-win-win for everyone.

I’ve always thought that the ad-funded model is the way to go in Asia, But you have to be able to provide volume to make it work. China certainly provides the volume.

China Mobile had been the only service paying music rights holders in China and there are disputes about payment rates in other markets in Asia.

There have been some contentious issues with the amounts the mobile gateways are paying (throughout Asia). The launch of Google Music is interesting. We are highlighting it as one of our key pillars at Music Matters. Google is using China as its global launch platform (for music). They have said if they can make it work in China, they can make it work around the world. It has been embraced by the music industry and that is fantastic. Now, we need to have it embraced by advertisers.

When Prince did his free giveaway with the Daily Mail in the UK a couple of years back and ran 21 shows on the bounce at the O2 Arena in London, everybody kind of highlighted that as a genius move. But (doing a giveaway) has been going on here for 20 years.

[In 2007, Prince granted British tabloid the Daily Mail on Sunday exclusive rights to distribute his new album “Planet Earth” as a freebie. Cutting out record stores, online sellers, and even his U.K. label, Sony BMG, he decided to take the album straight to the people, and all it cost them was the paper's cover price]

Well, certainly it has in China.

The big Chinese artists make their money out of endorsements, live and record sales. They use the record sales to promote the tour. Not the tour to promote record sales. Now that’s happening in Europe and the U.S. but it has been happening here for 20 years.

Asian music buyers favor streaming and/or music-on-demand services or owning a “snippet” that allows them to use it in various ways from a ringtone to a ring back tone.

Absolutely. The idea of tethering a portable musical device to a computer is foreign to many people here because they don’t have a computer. That’s changing. But giving them a mobile phone and a service to download a single track in 30 seconds costing 2 RMB in China has been very successful. Mobile music has been an amazing story in the region.

India has 250 million mobile subscribers, and is projected to hit 500 million by the end of 2010. The Indian market may offer better growth opportunities for foreign partners.

And India is not even as big as China. The good thing for India (accepting) international music is, obviously, that the English language is one of the main languages there.

In 2008, 750 delegates attended Music Matters. Given the tough economic times what attendance do you expect this year?

We are expecting the same number of delegates... We are doing everything we can to facilitate that all our delegates get here. We have not raised our prices. In some cases, for certain supporters and for people who have bought in bulk, we are doing some fantastic discounts. We have also secured some amazing flight costs from Virgin America out of London and Sydney. The Grand Hyatt has insured that their (room) rates are lower than last year. So we are doing everything we can.

Music Matters has donated HK$200,000 in tickets to 50 artists from to attend conference. [The local website has a community of 1,200 artists and 420,000 registered users.]

We’d noticed in the past three years that artists can’t afford to be at Music Matters unless they’ve made it. So what we’re trying to do is give them an opportunity to meet with local and international managers, promoters, agents, and labels to learn how to manage their lives.

(Nettwerk Group CEO) Terry McBride will be doing a mentoring session. He’ll be onstage with an artist and their manager without having met or hearing them beforehand. He’ll be like a fan hearing their music for the first time. Then they will go over (the artist’s) marketing plans over a year, and re-construct them in a real contextual marketing format. We will come back 12 months later, and see how they got on.

How big is the indie sector in Asia?

It is huge. We have an Asian Indies panel this year. In the program, it says, “In most local markets the independents are bigger than the major.” People like Avex Asia (based in Hong Kong), and Taihe Rye Music (the national leader in Chinese music) have huge businesses selling and exporting local, and importing. Of course, Japanese Indies have long exported to various parts of the world.

Music Matters is an industry event that brings the different industries together—gaming, music, advertising, technology, digital media, mobile manufacturing. The conference is very broad in scope.

We have to be. Music touches so many areas of life. The business itself, we felt, needed to be promoted into all of those areas. The reason we brought it all together is because that is how the industry needs to survive. It needs to collaborate. You need to have a correlation of talent with technological advances and know how the networks that exist here work.

The idea of Music Matters is to promote successes within the industry whilst discussing the issues and trying to plot the road maps for problems. We try to come at it from the angle of success.

Music Matters’ panels are quite mixed.

We have learned in the past that if put four promoters on a panel they will all agree with each other. You need to spice it up with different viewpoints from different industries where they do work together.

These industries are so inter-related today.

Exactly. As I said, we have to promote these cross-collaborations and get (people) working together. Our licensing panel this year will have panelists from a publishing company, a label, a handset manufacturer, a digital distributor and a collection society. They may well have a go at each other.

Last year, with the licensing panel, we had one of the most successful panels ever. Factions in the audience started getting behind their kind of person on the stage. They were cheering and applauding. Then everybody onstage started posturing.

Last year’s “360 Degree Business Models” panel moderated by British promoter Harvey Goldsmith was pretty lively.

The 360 panel was fun. There was an attitude from the Asians of, “What’s this about 360 deals? We have been doing this for years.”

In a recent interview Alison Wenham chairman/CEO of the Assn. of Independent Music, stressed the importance of live side of the Chinese music industry. She, in fact, argued that it is far more important in building a strong fan base and having a business in China than just selling music.

Absolutely. One of the trends coming through our Music Matters survey we do each year with 3,000 kids, not just for China but everywhere in Asia, is live. It is absolutely huge (in importance). There’s been the (recent) advent of (large-scale) festivals. Now, Asia is drawing on concepts from the West but there’s still a long way to go.

In the UK, there are probably 300 festivals (annually). In China, there are probably three major festivals. Last year, with the Olympics and the problems with Tibet, festivals in China got postponed. But they are all back this year with sponsors and funding. Zebra Media has a new one (The 2009 Zebra Music Festival in Chengdu in Sichuan province, May 1-3).

At the conference there will be discussions about the opportunities of bringing Western music into Asia. Where that works and what the market is and the investment and development that is required.

But many Western acts aren’t known in Asia.

That’s correct. A lot of people won’t know of these artists. But stop somewhere in the middle of the U.S. and ask them to name three Chinese artists. Even in New York, if you ask someone to name three Asian artists, you’d get a 2-3% uptake. In China, 95% of the market is local music. Well, 5% is still 50 to 75 million people who like international music. The challenge is how do you find them.

Well, you don’t find them by just flying in and playing one show and flying out again. You need to build a relationship with the Asian audiences. You use the new social networks. In China, you might use QQ (instant messaging) which has something like 220 million registered subscribers.

Japan has traditionally been the destination for Western acts playing Asia. We are now seeing acts like Celine Dion, Eric Clapton, the Rolling Stones, Bryan Adams, Beyonce, 50 Cent, Wyclef Jean, Shakira, Aerosmith, and Iron Maiden playing throughout the region.

The international artists coming here have tended to be the legends. So Billy Joel and Rod Stewart, those guys have been here and their shows tend to sell out. A new trend we are seeing are rock bands like Panic at the Disco, and One Republic--that level of artists--going around Asia playing in 2,500 to 3,000 seat venues. They are selling because people (here) want to be stimulated. Live music here is proving to be a great escape.

China has the largest Mandarin-speaking population in the world, Taiwan is considered the nexus of Mandopop. With the easing of restrictions by both territories, will the Mandopop industry shift to China. It’s such a big market.

Taiwan and mainland China do speak one common language, essentially Mandarin. So Taiwanese artists are huge in China - absolutely massive.

Somebody mentioned to me recently that as recently as 2 years ago, her father, living in Shanghai, would take his tape recorder into the shower to listen Taiwanese music. He was concerned that he would get caught by the authorities.

Now, look at where the country is. They’ve had the Olympics and the Rolling Stones, Linkin Park and Celine Dion have all been there. Sarah Brightman just sold out all over the place. And the Taiwanese artists are making huge careers for themselves on the mainland. It is an amazing change.

[Among Beijing's newer venues is the 18,000-capacity Olympics Basketball Arena, co-managed by Australia- and U.S.-based AEG Ogden, and the National Basketball Assn.. it will be China’s first commercially branded venue, with naming rights now on the market.] There have been some bumps on the road there as well, including when Taiwanese pop singer Ah-mei sang the Taiwanese national anthem at President Chen Shui-bian's inauguration at 2001. She was reportedly briefly banned in China.

That was a mixture of naiveté and bad luck. But there haven’t been that many cases of that happening. Oasis recently got canceled in China because apparently one of the brothers (Noel) had sung at a pro-Tibet rally. That’s the Chinese being very careful. You have to roll with it. You are not going to change it.

[Oasis had planned play in Beijing on April 3, and in Shanghai on April 5 but the Chinese government revoked the performance licenses already issued for the band, and ordered the shows canceled. According to the shows' promoters, the concerts were called off when Chinese authorities had discovered band member Noel Gallagher had appeared at a "Free Tibet" benefit concert in the United States in 1997.]

You and Michael Denmark launched Branded in 2001. Did you see a gap in the local marketplace?

Yes. We both had been working for different media organizations and working with branded content. There was a lot of great entertainment out there. There were great (entertainment) companies who had fantastic ideas but didn’t know how to execute them in a branding context. They didn’t know how to talk to Coca Cola, Nokia or Motorola. Michael and I saw the opportunity to set up a company that could bridge that gap.

Branded has worked with Celine Dion, James Blunt and Black Eye Peas. Although, Asia is a local content dominated market, have opportunities opened up for Western artists as well?

They have but it depends on what the artist is willing to do. Many of the international acts (coming here) are legends who have already had success in terms of record sales. The longer they have been in the business the less likely they will do anything for sponsors. But when there are younger acts coming out, we can work with them.

When the Black Eyed Peas came to Asia, they were only a couple of albums deep. We had Lane Crawford (The "Harrods" of Hong Kong) sponsor them and they went to the store, and did a press shopping visit. Fergie was there trying clothes on. It was fantastic. I wouldn’t imagine for a second they’d do that now without being paid a huge sum.

What is Barney the Dinosaur willing to do?

Barney goes to supermarkets, and shopping malls. Interestingly, Barney is not willing to do meet-and-greets.

You’ve worked extensively in London and Hong Kong selling sports for international TV networks. Are there any parallels between sports and music industries?

The main difference is that sports is full of boys. Music is full of girls.

Larry LeBlanc is widely recognized as one of the leading music industry journalists in the world. Before joining CelebrityAccess in 2008, Larry was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications including Time, Forbes, the London Times and the New York Times.

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