In a vast market like Asia, where the challenges are as varied as the music, it has taken less than three years for independent digital distribution company- Believe Digital to expand in major Asian markets. Currently, the company is present in India, China, Philippines, Thailand, Malaysia, Indonesia and Singapore. 

In a conversation with Radioandmusic.com’s Jescilia Karayamparambil, Believe Digital Asia head of sales Sylvain Delange talks about his plans in China and the challenges the company faces there.

Delange shares his hopes for Apple Music and how it will change the eco-system. He talks about the minimum guarantee approach of Indian labels and the delay the process brings for growth in the music industry. 

What is the response and growth in the Asian market for Believe Digital? 

Three years ago, Believe Digital started operations in Asia with Indonesia, and then added countries like Philippines, Thailand, Malaysia, India, Singapore and China. In Asia, India was the fourth country we started operating in, and it was a fast move we made.

Over the last two and a half years, Asia has been growing significantly. We have a team of 20 people dedicated to the Asian market, who focus on different markets to understand the needs of the local music industry. This set-up helps us understand the dynamics and synergy between labels and digital music services and others. 

In terms of catalogue size in Asia, we have reached half a million tracks from the Asian region alone. In terms of videos, we have 280, 000 videos across various platforms. Our catalogue is growing consistently, and our YouTube videos garner 4 billion monthly views, of which 10 per cent is generated in Asia, monthly. We hope that Asia will have a bigger role to play in Believe Digital’s business and digital market in the coming year or two. 

What are the challenges in the Indian market compared to any other market?

In most countries, our operations included a mix of local and international platforms. International platforms are usually the centre of activity, and most territories have music services like iTunes, Spotify, YouTube and other small players. However, in India, the digital business is growing rather slowly because there is only iTunes, Apple Music (with a lot of limitations) and YouTube, and a few other local services. Recently, we partnered with Saavn and Hungama and are looking at opportunities to work with other services as well. We are obviously targeting the main platforms to begin with.

There is a lot of minimum guarantee (MG) play in the game which is making the evolution of the market extremely complicated. Many players are trying to enter the market, including international services like Rdio and Guvera. The MG game is a hurdle as it involves a lot of investment, which slows down the process of new services from entering the market- that is nascent for streaming service. Streaming services have that type of business model which takes time to generate revenue. Except for Apple Music, other streaming services base their entire business model on the freemium model to acquire consumers. 

Most streaming services in the market are generating limited revenue for royalties and copyright holders. Believe Digital’s idea is to generate revenue for labels, as it is always tough to work with platforms that do not generate revenue. Sometime we have to educate the labels and people that we work with; in the sense that revenue might not be generated right now, however, in a long run it will happen. 

International services v/s local services

We follow the same pattern for international and local services. Our interest is to secure better deals for our partners, which is our core idea. The idea is to have a best share possible without having to involve the MG game.

How has the Chinese market been for Believe Digital?

China is a very important market for us in terms of deployment. It is a very difficult market on a different level as compared to India. The Chinese market is an extremely conservative and protective one. They are very cautious when it comes to dealing with foreign companies. It will take us some time to get the right approach and we strongly believe that China is a market that can be fair to all. 

We are already in the process of securing our catalogue on all major platforms of China. We know most of our content is relevant to the market. The major issue, however, in the country is piracy. It is an entirely freemium based market, so the question arises what kind of revenues are we expecting for the label. As soon as we are able to answer all the queries around the Chinese market, we can look at significant revenues in the future.

Is Believe Digital in talks with any label companies in India?

We are in talks with many labels in India. There are a lot of labels that are unlikely to partner with us, considering they have a strong digital backbone of their own. There are some who prefer handling their own distribution. However, we still approach them as we want to be an Indian player. These regular talks help us to be identified by the Indian local labels as well.

Are you part of the conversation between Apple Music and T-Series? 

T-Series and Apple Music might be having a conversation. We only know that the content is not available yet. It is something many other labels are facing, which is why they have refrained from putting their catalogue on Apple Music. I am not surprised that T-Series is not present; I know it will take some time. Apple Music will be working towards bringing more Indian and other catalogues to the service.

Will Tune core come to India?

The entire idea was to consolidate the Tune Core and Believe Digital businesses. Both are complimentary to the other, and now, we will have strong foot print in US with this consolidation. 

Tune Core is identified by independent artistes, DIY artists and semi-professional artists. Believe Digital can help some of those artists who are looking for a global reach, as Tune Core has a limited reach. Now, it can step into regions where Believe Digital is present. We intent to use these two dynamic entities as much as possible to help Tune Core artists. At the same time, Believe Digital can use this to cover DIY artists. We are covering DIY artists through Zimbalam, but with Tune Core it would be covered even better.

It will be difficult to reveal the names of the market Tune Core will expand to, as we are still working on it. The expansion will surely happen in the near future. 

What kind of response are you looking at in Asian market for services like Tune Core?

It is going to be a question of pricing and local service coverage. It will depend on the country we are targeting. Basically, we have to put ourselves in the heads of DIY artists and understand their needs. It is also about knowing the audience of the artists. It is very important to understand the community of artists. 

Describe in detail the growth of revenue across markets in Asia?

There is our growth, and then there is market growth, both of which bring strong dynamics to Believe Digital. For the last two years, we have seen constant growth from all services, including streaming and downloading. The Asian market is inverse to markets like the US, where downloads have fallen due to streaming. In Asia, downloads have been stable or growing for last two years.

In markets like Philippines, Thailand and Indonesia, streaming has picking up rapidly. In some regions, we have seen streaming revenues taking over download revenues.

As for Asian content, there is a huge demand among its diaposra spread across the globe. Anywhere between 60-65 per cent revenue comes from the home market, which means the rest comes from outside the home market. The percentage of revenue from outside India, at times, is higher as compared to the home market. It is the same with Philippines. 

Need for data transparency. Comment

Transparency is a key concept. No mature business happens without transparency. It is important to have a healthy local, digital market. Transparency is our core, and when a label works with us, it knows how many downloads and streams its track gets and other such details, which help the label grow further. We cannot win trust if there is no transparency, and that must be followed by the industry.

What are your expectations in Asia?

We are looking at overall market growth. The next level will be to see what happens at the end of the three-month trial period with Apple Music, whether or not people will stick with the service. It is a product-based company, which has been treating content very seriously. Music is a product for them and they want to generate revenue for it. Apple Music does not need to add consumers to increase valuation as it is already a recognised brand. The service looks at generating revenues and not just usage.

Within the next five years, the number of streaming users for the subscription model could be anywhere between 100  to 120 million subscribers worldwide. The music industry’s revenue will also multiple five-folds, which is a good news for labels.