Max Hole,  Chairman and CEO of Universal Music Group International, the world’s biggest music company, has been giving an analysis in Singapore of the present state of play in the industry.

Highlights:

– ‘In the last 50 years the music industry has made 80 per cent of its money in about 10 countries, and too much of our money in Asia with artists from outside the region. In the next 30 years I believe this has to change. The 80/10 split is bad for business, bad for artists and bad for fans. The real opportunity is turning the 80/10 into something more evenly balanced. Indonesia, China and India are key markets for us in achieving this.’

– ‘The Chinese have virtually bypassed the business model that we came to rely on so effectively in the West and Japan over the past 50 years. The traditional model of purchasing musical product, be it physical or digital, has never really existed in China on any major scale. The market is moving straight to one where it’s all about securing access to tracks. We are in the middle of an extraordinary transition and it’s very exciting to be part of it.’

– ‘China is not only the world’s largest country, it is also the world’s biggest experiment in testing the new business models of the future.’

Full release below.

Max Hole with a recovering tenor

SINGAPORE, 22 MAY 2014 — Music fans across Asia and the way they consume music are poised to become major drivers of the music industry in the 21st century said Max Hole, Chairman and CEO of Universal Music Group International, in his keynote speech this morning at Music Matters, Asia’s leading music business event.

 

Asia accounts for 60% of the world’s population and yet music sales in the region have to date accounted for less than a quarter of the global market, and mostly from one country, Japan. However today’s rapidly developing digital and access models mean that the music industry has a once in a generation opportunity to foster dynamic and growing music markets that reflect the region’s size and cultural importance.

 

Hole argued that China is in the position of being able to jump straight to the next stage in the evolution of music consumption behaviour. “When I look at the Chinese music industry, despite its difficult past, I see the future,” said Hole. “China is not only the world’s largest country, it is also the world’s biggest experiment in testing the new business models of the future.

 

“The Chinese have virtually bypassed the business model that we came to rely on so effectively in the West and Japan over the past 50 years. The traditional model of purchasing musical product, be it physical or digital, has never really existed in China on any major scale. The market is moving straight to one where it’s all about securing access to tracks. We are in the middle of an extraordinary transition and it’s very exciting to be part of it.”

 

Hole argued that across Asia, the fundamental challenge is building strong music eco-systems to fund the development of local talent – something that requires a new approach from business, consumers and governments. “As an industry, China is our billion people challenge,” said Hole. “If we touch all of these consumers, just once a year, in some form, then we will generate more Yuan to re-invest in China and build our businesses.”

 

For Chinese music to become globally successful Hole explained that there are three key areas that need to be addressed: “We have to work together to secure the support that we need from business partners, regulators and business; we cannot make short-term deals which secure jam today and store-up problems tomorrow; and we have to remember that if we deliver good Chinese music in an environment where it can be bought easily, cheaply and legally, then we will all prosper.”

 

Hole spoke about how weak local ecosystems mean low investment in local talent. “We are determined to help local artists make a business they can be proud of,” he said. “In the last 50 years the music industry has made 80 per cent of its money in about 10 countries, and too much of our money in Asia with artists from outside the region. In the next 30 years I believe this has to change. The 80/10 split is bad for business, bad for artists and bad for fans. The real opportunity is turning the 80/10 into something more evenly balanced. Indonesia, China and India are key markets for us in achieving this. ”

 

On Japan, Hole discussed how the largest music market in Asia is “Unique and remarkable in many ways,” from being the home of innovations such as the ‘360 degree’ business relationship to the presence of retail price maintenance and the current difficult transition to new digital-led areas of growth.

 

“Now is the time to innovate, take some chances and truly welcome the digital revolution,” said Hole. “A healthy Japan means a healthy global record business. It is imperative that we all work together – record companies, artist management companies and music platforms – to revitalise the business.”

Two years ago, I reported the death of Decca, one of the last major classical record labels. My column drew hysterical reactions from toadies of the music industry, prompting one of them to write a web article proclaiming that Norman Lebrecht was dead. 

Well, not quite.

What happened at Decca was that Chris Roberts, then head of classics and jazz at Universal, decided in a late act of spite to wind down the label and leave in in the hands of one executive and a receptionist. Roberts was fired last summer by the Universal chief operating officer, Max Hole. Costa Pilavachi, a former head of Decca, was brought back in a senior role, and the pair have been re-assessing the business top to bottom.
An announcement will be made in the next few days, I hear, that Decca is to be relaunched next month as Decca Classics, hinged to Universal Music UK and no longer governed from afar. Paul Moseley will remain as managing director of a reinforced team and new signings are on the cards.
This is a rare shaft of exceptionally good news for the classical music business, and an even rarer instance of a corporation admitting it made a really bad move and making swift amends.
It does not mean the rebirth of classical recording, but it does mean the decline will be managed in future with a good deal more sensitivity and commonsense.
Decca was declared dead by Universal (and not by me). It is now risen again.

Two years ago, I reported the death of Decca, one of the last major classical record labels. My column drew hysterical reactions from toadies of the music industry, prompting one of them to write a web article proclaiming that Norman Lebrecht was dead. 

Well, not quite.

What happened at Decca was that Chris Roberts, then head of classics and jazz at Universal, decided in a late act of spite to wind down the label and leave in in the hands of one executive and a receptionist. Roberts was fired last summer by the Universal chief operating officer, Max Hole. Costa Pilavachi, a former head of Decca, was brought back in a senior role, and the pair have been re-assessing the business top to bottom.
An announcement will be made in the next few days, I hear, that Decca is to be relaunched next month as Decca Classics, hinged to Universal Music UK and no longer governed from afar. Paul Moseley will remain as managing director of a reinforced team and new signings are on the cards.
This is a rare shaft of exceptionally good news for the classical music business, and an even rarer instance of a corporation admitting it made a really bad move and making swift amends.
It does not mean the rebirth of classical recording, but it does mean the decline will be managed in future with a good deal more sensitivity and commonsense.
Decca was declared dead by Universal (and not by me). It is now risen again.

Deutsche Grammophon and Decca have signed the former Naxos head of marketing Barry Holden to manage their classical catalogues. The move, announced as part of ‘a significant expansion programme for (the) flagship classical labels’ is singular and significant.

Holden was putting cheap classics into gas stations while DG talked of price protection. He signed the England football manager, Sven-Goran Eriksson, to front a classical album ahead of a World Cup campaign (inevitably, a loser) and he snapped up dead labels to boost the Naxos cat with high-quality English music of a prior era.

He’s a competitive animal. It could get hot in the bargain basement.

Other label signings – cellist Alisa Weilerstein and soprano Alexsandra Kurzak to Decca, violinist Mikhail Simonian to DG. Lut Behiels is the new director of classical marketing

The driving force behind the expansion is Universal Music Group COO, Max Hole.

 

 

Deutsche Grammophon and Decca have signed the former Naxos head of marketing Barry Holden to manage their classical catalogues. The move, announced as part of ‘a significant expansion programme for (the) flagship classical labels’ is singular and significant.

Holden was putting cheap classics into gas stations while DG talked of price protection. He signed the England football manager, Sven-Goran Eriksson, to front a classical album ahead of a World Cup campaign (inevitably, a loser) and he snapped up dead labels to boost the Naxos cat with high-quality English music of a prior era.

He’s a competitive animal. It could get hot in the bargain basement.

Other label signings – cellist Alisa Weilerstein and soprano Alexsandra Kurzak to Decca, violinist Mikhail Simonian to DG. Lut Behiels is the new director of classical marketing

The driving force behind the expansion is Universal Music Group COO, Max Hole.