According to recent industry figures, the physical music industry in Asia has plummeted from US$4 billion in revenue in 1997 to a comparitavely paltry US$400 million in 2006 — a drop of 69 per cent, with digitisation and importantly piracy, two key factors.
So music labels, Sony BMG included, are embarking on a reorganisation and revitalisation of their respective business models, with an increased focus on digital, artist branding and rights management, a shift away from the more traditional product and sales-based model into new areas like sponsorships and endorsements.
“It’s almost like an agency model that we’re moving into, and it can be a revenue stream for companies. If a record company brings a brand to an artist, or vice-versa because obviously we have far wider scope across the world, there can be a fee for bringing the two together,” he says.
Artists like Madonna and Kylie Minogue have released clothing brands, the Black Eyed Peas are fronting Pepsi’s current global campaign, and locally, acts like Jay Chou have been the face of mobile phone brand Motorola.
In developed markets like the US, artists tend to be more tentative in commercial endorsements, but in Asia, where celebrity and endorsement go hand in hand, the market is ripe for the picking.
Wadsworth’s straitlaced demeanour belies the fact that he rubs shoulders with superstars on a regular basis — evidence perhaps of his background as a numbers man.
An accountant and financial analyst by trade, the 54-year-old has now walked the company’s halls for almost three decades.
It’s a far cry from his start in the industry, which came when he accepted a two-month temporary assignement with CBS Records in 1979, long before its acquisition by Sony Corporation in the early 90s.
“I really liked the atmosphere at the office as it just wasn’t formal. Music was blaring out and it was really my kind of environment.”
Not, however, an environment that ever encouraged Wadsworth to make his own bid for stardom.
“I’m not a musician, and I can definitely clear a karaoke hall pretty quickly.”
Personally, his music tastes sit a little closer to home with Australian bands Men At Work and Midnight Oil among his favourites, although he’s quick to point out the rather electic rock band Pink Floyd will always remain his number one choice. Professionally of course, it’s Sony BMG’s entire stable of talent.
Ultimately, its a love of music and the industry which sustains him in his drive to meet the challenges posed by digitisation, which many expect to act as a catalyst for further fine tuning of widely accepted business models. With content available so widely — both legal and bootleg — record companies are falling over themselves to find a way to make acquiring content both simple and affordable, dialoguing with handset manufacturers and telcos with a likely outcome a subscription method.
In fact, at the recent Music Matters conference in Hong Kong, Nokia’s global director of Nokia Nseries Hear New Multimedia, Tommi Mustonen, told Media the Holy Grail was making downloading a song as cheap and as simple as making a phonecall.
Wadsworth agrees, but he notes it must go further. “Single-track downloads simply won’t work — they can be too time-consuming and complicated. But if subscription models are priced attractively, consumers will buy them on a regular basis.”
And when digital is mentioned, piracy is never far away. According to a recent survey, coauthored by Synovate, MTV and Branded, 25 per cent of almost 4,000 consumers canvassed had downloaded a song from the internet without paying for it, and almost 20 per cent used a file sharing programme to share the music.
“But I’m optimistic. Music is everywhere as a major part of our lives, and it will continue to be so. But the business model we’ve got used to will evolve very quickly.”
Wadsworth's CV...
2007 President, Asia, Sony BMG
1995 Vice-president, finance, Sony BMG
1981 Finance director, CBS Records, Australia
1979 Financial analyst, CBS Records, UK
