Sep 18, 2008

Brand Health Check... iTunes strikes a discordant note for Asian users

While Apple's iTunes Music Store dominates the music download market in the US with its impressive portfolio of music and video content plus software applications, the service has never quite taken off in the same way in Asia-Pacific.

Brand Health Check... iTunes strikes a discordant note for Asian users
Millions of music lovers in the region could only look on in envy as the online store began operations in market after market internationally - from France to the Netherlands to Australia. Finally, in 2005, the store made its debut in Japan - the world’s second-largest consumer of music. The fanfare, however, ended right there.

Blaming rampant piracy and file sharing plus a host of licensing agreement problems with record firms and movie studios, the iTunes Music Store was reluctant to avail its full suite of content and services to other Asian countries.

Markets such as Hong Kong, Taiwan, South Korea, Singapore, Indonesia and Malaysia were probably deemed too small for the US tech firm and customers have begrudgingly had to find a way to get an American credit card number, just to make their purchases at the online shop. The launch of its highly anticipated iPhone recently in Asia then placed the iTunes Music Stores in further mire. Customers who rushed to buy the new product in Singapore were disappointed. They still could not buy music and video content for their iPhones - which was built for multimedia functions and downloadable content in mind.

In the run up to the Olympics, access to the iTunes Music Store site in China was blocked because an album containing pro-Tibet songs was widely publicised on the site.

More recently, Nokia, the world’s largest mobile phone maker, has made a significant statement of intent, to fill the gap that iTunes Music Store has failed to fill in this region.

The absence of iTunes has opened up opportunities for other companies, in particular mobile phone operators and handset makers. In Hong Kong, SmarTone-Vodafone and 3 have music download services, while Motorola has been expanding its Moto Music platform beyond China into markets such as Singapore.

- Frustrated music fans in China were unable to download songs from iTunes for two weeks in August, after an album containing pro-Tibet songs was put on sale.

- Rampant piracy and licensing agreement problems have limited Apple’s roll-out of its iTunes music stores across the region.

- Nokia is set to challenge iTunes’ dominance in the digital download market with its own Nokia Music Store and Comes With Music phone service.

Frederique Covington, regional executive planning director, Bates 141 Singapore

What ever happened to the spirit of ‘Think different?’ In Asia, iTunes has been remarkably conservative, a far cry from Apple’s innovative attitude.

Granted, the lack of hardware prior to the iPhone made the business model challenging. But, by restricting access to its service, iTunes showed it was more interested in protecting its copyright than develop a new model to cater to the millions of Asian music lovers who consume music differently.

Asia has leapfrogged ahead of the US with digital music. It now relies heavily on mobile delivery, and is witnessing the rise of local artists. With the iPhone, iTunes can market its ecosystem and demonstrate its value proposition using mobile as a way in. The appeal of the iPhone is its ability to access songs, movies, TV shows, podcasts and audiobooks. iTunes can also help support local music acts which need the exposure.

iTunes should revisit the ongoing debate of a new subscription model which combats piracy by going around the conventional download-only approach, giving people unlimited access to a content catalogue. Asia is already living the iLife. It’s time for iTunes to open up.

Chris Lim, head of copy, Tribal DDB Singapore

Asia is made for iTunes. Asians love electronics. Last year, three of the top five countries in terms of sheer broadband user numbers are in Asia.
Credit cards are finding their way into the hands of an increasingly affluent workforce. We have the savvy, the fat pipes and the financial means. So how does the iTunes Store fit into Asia?

It’s tightly integrated ecosystem may just be its greatest weakness. Because of DRM, content from the iTunes Store only plays on iPods, iPhones, and PCs with iTunes. The average Asian user, however, is used to quite a bit more choice than that. Still, if iPods were a little cheaper, that might not be such a problem. Price could be a sticking point. With the greatly varying spending power across the continent, I suspect many will find iTunes music a little expensive.

Then again, one cannot underestimate the power of convenience and a touch of conscience. And, like the cranky relative in every family, Asian countries have their own particular quirks and sensitivities. What’s acceptable in one country is taboo in another. So here’s a thought: there may just be a position in Apple for a local content advisor to look out for sensitivities. Just in case your store gets blocked.

Campaign Asia

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