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Trade Mission Engages Key Korean Music Professionals

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THE GRAMMYs
GRAMMYs
Dec 2, 2014 - 3:22 pm

(Recording Academy Trustee Ruby Marchand is among the delegates participating in A2IM's Trade Mission to Asia. The mission originated from an A2IM/Recording Academy Indie Day on Capitol Hill in 2010 that resulted in a government grant for the trade initiative. Her blog will document her experiences representing The Recording Academy as the mission travels from Seoul to Hong Kong in an effort to increase exports by small- and medium-sized independent music businesses based in New York and Tennessee.)

Friday, Sept. 7:

It takes about 21 hours to fly from New York to Seoul, with a two-hour stopover in San Francisco. We arrived mid-afternoon to a glorious, dry summer day. With a 13-hour difference, Seoul's afternoon is N.Y.'s middle of the night. 

After checking into the Seoul Plaza — an awesome, state-of-the-art hotel near the architectural wonder of Seoul's City Hall, which is shaped like a giant, undulating glass wave — the team had a welcome dinner and started to get to know each other. It's already clear that our group has great chemistry and is focused on the exciting mission ahead.

Our first day of meetings was seamlessly coordinated by Catherine Spillman and Alex Choi of the U.S. Department of Commerce team, based at the U.S. Embassy in Seoul. Altogether, 90 key music professionals from the local Korean market participated, including music importers, indie labels and associations, digital music portal sites and aggregators, government agencies, lawyers, publishers, PROs, concert sponsors, festival and concert promoters, media outlets, and journalists.

We began the day with a session prepared exclusively for the A2IM delegates by Jim Sullivan, senior commercial officer at the U.S. Embassy. Jim opened with a fascinating metaphor: he compared Seoul today to a reflective, shimmering drop of water. He spoke about the purity of intent that is inherent in Korean society and how balanced and homogeneous the population is. He emphasized how extraordinary Korea's transformation has been — that in less than two generations, the nation has leapt from being an isolated, unsophisticated country into a cutting-edge, ultra-modern bastion of technology and commerce, always striving for excellence. Jim closed by cautioning us that while Korea is a land that fully respects the law, there is a fundamentally different understanding of contracts here than we have in the States. Contracts in Korea are considered a reflection of the exact conditions during the period in which they're negotiated and signed; but once the state of things changes, it is perceived that the contract may no longer address the new conditions and can be reinterpreted. All documents are "fluid" in this fashion. Anyone doing business in Korea should be prepared to re-engage in discussions many times over to keep their contracts up-to-date with the times.

Once the Korean music professionals joined us, the presentations began. The historic importance of the trade mission was emphasized by all parties. In addition to thanking the U.S. Department of Commerce for their on-the-ground expertise, Rich Bengloff acknowledged the pivotal financial support of the state of New York, represented on our mission by Lennox Ruiz, director of the international division of the New York State Department of Economic Development, as well as the generous assistance provided by the state of Tennessee. Rich closed by offering a gracious thank you to Daryl Friedman and The Recording Academy for being a dedicated partner and advocate throughout the process.

We turned to the American independent music scene. Sire Records co-founder Seymour Stein, our guest of honor, gave a fascinating keynote address comparing the paradigm shift in Korea to the cultural explosion of indie music in the States in the 1950s. Rich Bengloff followed with a comprehensive overview of our robust, ever-evolving indie culture. He stressed how essential it is for independent labels to cultivate business opportunities worldwide and gave several examples of the breadth, visibility and influence of our independent artists. I followed with remarks about the essence and purpose of The Recording Academy. I described our large, diverse membership as music creators and I urged the Korean community to consider our members as potential partners for all kinds of creative enterprises, including recordings and tours. I congratulated our Korean counterparts on the phenomenal success of "Hallyu" — the Korean Wave — which is energizing millions of music fans worldwide. I closed by inviting our hosts to consider joining the Academy and lending their voices, talent and expertise to our community.

The program shifted to two Korean experts. The first was Bernie Cho, president of the Seoul-based creative agency DFSB Kollective, who has a vast knowledge of the local music scene. Bernie was followed by esteemed attorney Chung Hwan Choi of the law firm Lee & Ko. Choi is an expert in IP and entertainment law and has had extensive experience representing U.S. and European firms in Korea, as well as local artists and organizations. Each speaker gave us a clear snapshot of the challenges and opportunities within the Korean market. 

Here's a quick overview:

• Korea is the most advanced wired and wireless country in the world. It has one of the highest broadband penetrations and speeds worldwide and is the leader in mobile technology.

• Korea is the eighth-largest digital music market in the world, larger than Sweden, China and India. It's also the first country where digital surpassed physical sales. Currently, physical is making a modest comeback as merchandise, thanks to elaborate packaging.

• Korea is a $3.36 billion music market. The K-pop boom has ensured double-digit local growth on average over the past few years. There's been a 41 percent increase since 2009 in the local market.

• 76 percent of local sales are of Korean music, while international music only accounts for 24 percent of sales. This ratio was reversed 20 years ago.

• The live music scene is thriving, especially for Western artists. Huge festivals are breaking attendance records. There was a 100 percent growth from 2010–2011 in the Korean concert industry. 

• The Korean Wave for the export music market reached $177 million last year and reflects an astonishing growth rate of 472 percent between 2009–2011.

• Korea's an extremely social media-savvy society, with local sites like Me2Day and Naver as popular as YouTube, Twitter and Facebook.

• The biggest challenge in Korea is the price of a digital music download. It is 5 cents a song. The price is the same for streaming. Korean portals take a much higher percentage revenue share than U.S. iTunes, for example. The result is that artist revenue share is considerably lower than in other countries. This issue has impacted artists' decisions to prioritize their international careers because it's so difficult to financially sustain their careers in Korea alone. However, there is promising news: the government has allied with music organizations to institute specific pro-artist policies. As of January 2O13, streaming and download prices will begin to rise (up to 13 cents by 2016), rights-holders will get the majority of the revenue, and artists will be able to choose amongst a variety of new plans from the digital portals.

• Korea has had massive success in combating online piracy. A combination of a "three-strikes" local policy and an aggressive legal strategy against the 40 biggest K-pop piracy sites worldwide — called Operation Top 40 — resulted in these sites being shut down and in Korea receiving significant financial damages. Before this approach, online piracy was so pervasive that the logic at the time was to price downloads so low that they could compete with the illegal sites (hence the 5 cent price). This is no longer the case. When it came to shutting down illegal sites emanating from the U.S., Korea filed suit in California, where many servers for social networking sites are located. Interestingly, the fact that the Korean artwork had been registered with the copyright office became the 'smoking gun' to nail copyright infringement in the courts.

• Korea has three copyright societies and the protection of intellectual property rights is rigorously upheld by law.

The day abruptly shifted into high gear and our 15-minute "speed-dating" sessions with Korean companies began. We had three breathless hours bowing, exchanging business cards, and getting a crash course on how to flesh out potential opportunities for licensing, touring, mobile and synch for the indie labels in the room. It was a fascinating one-on-one that will lead to a lot of targeted follow-up once we're home.

How to top all of this off? Why not a personal invitation to join the United States Ambassador to the Republic of Korea, Mr. Sung Kim, for a dinner and reception at his personal residence? We practically skipped down the cobblestoned side-streets of Seoul in our excitement. We were even joined by multiple GRAMMY winner Larry Carlton, who happened to be in town. Ambassador Kim is known as a "foodie" in local Korean circles and the extraordinary spread did not disappoint! He was a gracious host and clearly enjoyed spending time with our group as much as we enjoyed the honor of being with him.

The evening wrapped with a mad dash to the university district, Hongdae, to see a promising Korean indie band perform at a famous local venue. Galaxy Express are the real deal!

My final take-away from our Korean visit was the message given us by the U.S. Embassy's cultural attaches. They want to work with American artists and musicians coming to Korea. They can help create performance opportunities and make local connections to enrich your trip. Academy members, if you are fortunate enough to visit the thriving and gracious city of Seoul, please don't hesitate to call the Embassy's Cultural Office at 82-2-397-4535 or email them at seoul.office.box@trade.gov. Tell them you're a member of The Recording Academy and are following up on the Trade Mission visit.

 

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The First A2IM/Recording Academy Trade Mission Embarks For Asia

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THE GRAMMYs
GRAMMYs
Dec 2, 2014 - 3:22 pm

(Recording Academy Trustee Ruby Marchand is among the delegates participating in A2IM's Trade Mission to Asia. The mission originated from an A2IM/Recording Academy Indie Day on Capitol Hill in 2010 that resulted in a government grant for the trade initiative. Her blog will document her experiences representing The Recording Academy as the mission travels from Seoul to Hong Kong in an effort to increase exports by small- and medium-sized independent music businesses based in New York and Tennessee.)


Tuesday, Sept.  4:

After months of preparation, the first-ever Trade Mission will leave for Asia tomorrow morning at 6 a.m. The ghastly 4 a.m. check-in time at Newark probably won't dampen the spirits of the independent labels leading this pioneering effort. Under the auspices of Rich Bengloff, president of A2IM, 15 delegates from a diverse group of New York-based labels will meet with key people in music who are based in Seoul, Shanghai and Hong Kong. The purpose of the trip is to lay a broad new foundation for U.S. independent music to be heard, appreciated, and sold throughout Asia. Hopefully, this will be the first of many trade missions to take this message around the world.

The concept for the trip came to Rich when he attended MIDEM and realized that participants from other countries often benefited from government support. Rich joined forces with Daryl Friedman, The Recording Academy’s Chief Advocacy & Industry Relations Officer, to find a means of identifying the most likely sources of funding for overseas outreach by the independent music community. The Academy used its connections to set up a series of meetings in Washington for leaders in the independent music community. As a result, A2IM applied for a New York State grant from a new federal program, called STEP, which is administered by each state. STEP is designed to help small businesses export the intellectual property they develop and to improve the overall balance of trade in the process. With additional assistance from Rep. Jerrold Nadler (D-N.Y.), a congressman passionately committed to music creators and preserving their rights, and Elizabeth Healy, Sr. Executive Director of The Recording Academy New York Chapter, the first-ever STEP grant was secured.

The delegates to Asia include an impressive array of A2IM member labels, including Stephanie Alexa from ATO Records, Sam Alpert from Eleven Seven Music, Cathy Bauer from Daptone Records, Joachim Becker of ZOHO Music, Alec Bemis from Brassland, Charles Book from Entertainment One, Randy Chin from VP Records, Priya Dewan from Villains Music Agency, Jurgen Korduletsch from Lollipop Records, Pat Rains from PRA Records, Adriana Sein from Ultra Music, Robert Singerman from CMJ, Seymour Stein from Blue Horizon Records, Jon Topper of Fatboy Records, and Robert Williams from 335 Records. Joining this group are Rich Bengloff, myself  as The Recording Academy’s representative, and Dawn Bruno, senior international trade specialist for the Export Assistance Center within the U.S. Department of Commerce Office in New York. (This is the first time that Dawn’s office has ever directly worked with the music industry.)

A2IM meticulously prepared for this visit. Andrea DaSilva from the U.S. Department of Commerce in Washington, D.C., offered all participants two webinars, featuring experts from all over Asia, on the topics of the Chinese, Hong Kong and Korean music markets and protecting intellectual property rights. In the months leading up to today, local outreach in Asia by Department of Commerce specialists, the U.S. embassies, and premier organizations such as Music Matters and Shanghai Synergy ensured that we’ll meet with literally hundreds of people who are interested in the music that the delegates will be representing. We'll meet with local music creators, labels, publishers, mobile carriers, synch and touring enterprises, entrepreneurs, government officials, press, PROs, specialized music organizations, and more. Meetings will vary from large conferences and presentations to one-on-one 15-minute speed meetings. We'll have an opportunity to hear local artists perform and we'll even be guests at a special reception hosted by the U.S. ambassador to Korea to commemorate the trip!

My role as Academy representative will be to highlight the breadth of The Recording Academy’s accomplishments and commitments. I'll be speaking in each city about The Academy and I will explore the possibility of creating work opportunities in each of these markets for our members. More to come as this blog unfolds! Now, it's time to jettison everything from my suitcase as the baggage restrictions are ridiculous between Shanghai and Hong Kong. (Thanks to Rich for the warning!)

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Trade Mission Delegates Bond During Historic Tour Of Seoul

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THE GRAMMYs
GRAMMYs
Dec 2, 2014 - 3:22 pm

(Recording Academy Trustee Ruby Marchand is among the delegates participating in A2IM's Trade Mission to Asia. The mission originated from an A2IM/Recording Academy Indie Day on Capitol Hill in 2010 that resulted in a government grant for the trade initiative. Her blog will document her experiences representing The Recording Academy as the mission travels from Seoul to Hong Kong in an effort to increase exports by small- and medium-sized independent music businesses based in New York and Tennessee.)

Saturday, Sept. 8:

We woke up energized on an overcast Saturday morning in Korea. A2IM had arranged for a guided bus tour of Seoul, which many of us didn't want to miss. It was a historic tour, rather than a shopping tour, and as none of us had ever visited Seoul before — even for the veterans among us, who've visited Asia many times, it was strongly appealing.

We visited a small but symbolically significant Buddhist temple in the heart of the city and then went on to the sprawling grounds of the Gyeongbokgung Palace. Built in 1395, the palace served for centuries as the center of royal, cultural, legislative, and economic life in Korea. Situated on almost 240 acres, the palace is perfectly positioned from a feng shui point of view among the small mountains that dot Seoul's perimeter. Our guide explained several elements of the architecture as warding off evil spirits. He told us that shamanism is still a powerful force in Korean culture and is very much ingrained in a society that's otherwise extraordinarily modern. Destroyed by fire during the Japanese invasion of 1592, reconstructed 300 years later and then torn down during the Japanese occupation, about 40 percent of the royal compound survives through restoration. Our guide's recounting of long periods of Japanese occupation interspersed with long periods of isolation gave us new insight into Korean society. And less than an hour away from Seoul lies the DMZ (the demilitarized zone), which is never far from the minds of Koreans on both sides of the border.

We flew into Shanghai that afternoon. Jean Hsiao Wernheim and her amazing team from the Shanghai Synergy Culture and Entertainment Group, our Chinese hosts, welcomed us at the airport and whisked us off to an early dinner. We were delighted to walk in on a cacophonous wedding party at the restaurant until the thick cigarette smoke wafting through the building forced us to retreat to private dining rooms. Peering out at the city from our bus window, we were struck by the non-stop cement pouring on the streets, even late at night. Power and energy are significant factors in this city. As soon as you leave the magical aura of skyscrapers casting their glow on the Bund, each illuminated with a distinctive array to carve out its unique personality, the rest of the city is subject to pools of darkness and dimly-lit streets. The extremes of Shanghai — from local street markets and rubbish-littered side streets to high-rise residential abodes and the almost celestial presence of the commercial towers — are evocative and overwhelmed us on the first day.

By now, our group of indie labels, Dept. of Commerce and N.Y. state reps and I are calling ourselves "family." We have such warmth and respect for each other. If I meet with a local music maker whose expertise might be of interest to a participating label, I make sure the introduction is made (and vice versa). I get ribbed regularly by the team because the only English word everyone in Asia seems to know is "GRAMMY!"

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The Miracle Of Ceaseless Development: Trade Mission Visits Two Shanghai Music Parks

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THE GRAMMYs
GRAMMYs
Dec 2, 2014 - 3:22 pm

(Recording Academy Trustee Ruby Marchand is among the delegates participating in A2IM's Trade Mission to Asia. The mission originated from an A2IM/Recording Academy Indie Day on Capitol Hill in 2010 that resulted in a government grant for the trade initiative. Her blog will document her experiences representing The Recording Academy as the mission travels from Seoul to Hong Kong in an effort to increase exports by small- and medium-sized independent music businesses based in New York and Tennessee.)

Our first full day in Shanghai looked tantalizing on our schedule. We were visiting two music parks, referred to as "China Industry Music Parks, Site 1 and Site 2." Neither park was actually constructed, so what would be in store for us? Would this be a visit with hardhats and blueprints? All we knew was that it was an honor for us to be given this tour, and that it would help us understand China's vision for local artistic development and its relationship to the industry at large.

Our gracious hosts, Bill Zang, Jean Hsaio Wernheim and their team from Shanghai Synergy, accompanied us on this tour, as did Dawn Bruno's counterparts from the Department of Commerce at the U.S. Consulate General in Shanghai. We drove down the winding, scenic Huangpu River where we caught glimpses of the unique pavilions constructed on the other bank for Expo 2010. The riverfront area we traveled seemed like a giant, paved urban park, which eventually gave way to an abandoned industrial site. We were told that the whole area is about to be transformed into a vast entertainment complex, anchored by Dreamworks Animation SKG. It is scheduled to open in 2016.

We hopped into open-air vehicles, waved at the police officers who saluted us as if we were VIPs, and entered a building that housed the architectural mock-up for the enormous site. We sat down for a video presentation offered by Xiaohui Lv, the publicist for the entire development, who welcomed us warmly. Situated within Shanghai’s Xuhui District, the land is being developed to be China’s most prominent entertainment center, housing a music park, theaters, performance venues, broadcasting stations, film studios, and a huge variety of shops and residences. It will be connected by all forms of transportation to the rest of Shanghai, affording easy access. The tagline for the video was fascinating: it referred to China’s vision for the enterprise as "the miracle of ceaseless development." Lv explained that the Chinese government, working through Shanghai Synergy, is eager to attract partners from all facets of the music industry to open offices in the music park. The park will offer state-of-the-art recording facilities and will have accommodations and resources for artists and their teams to write, collaborate, and produce their own music. In addition to music, major media companies worldwide are being courted to invest in the park so that they are positioned to work in China from the most effective standpoint.

We left the park building awestruck at the scope of this enterprise. About 40 minutes away was Site 2. We had no idea what a second music industry park would be like. The bus dropped us in a neighborhood that was the exact opposite of Site 1 or the glitter along the Bund. This was Pudong District, the oldest neighborhood in Shanghai at 1,300 years old. Another riverfront town, it is a world apart, reminiscent of another era. Graceful low buildings flow seamlessly along the waterfront, surrounded by weeping willow trees and elegant curved bridges. It was quiet here and the pace of life was a fraction of that of the rest of Shanghai. We were greeted by the mayor of Pudong and several of his local counterparts and treated to hot tea and delicious local nuts. We learned that Pudong is famous in China for being the home of the top craftspeople in embroidery and in many other arts. Its artistic ambience is perhaps unparalleled in other parts of China, yet it is very close to Shanghai center. For these reasons, it has been designated as a new park for musical development. Plans have been drawn up to create a residential environment for artists to write and record, within a larger transformation of the area. Pudong inspires creativity and is home to one of the most successful annual festivals in China.

Our delegation experienced the magic of Pudong as we walked down cobblestone streets toward our restaurant for dinner. We had an amazing meal of food-that-shall-not-be-named. (We often never knew what we were eating, which was just as well, since I noticed at the airport that a typical dessert was called "double boiled frog's oviduct with lotus seeds and lily bulb cold/hot.") I had to laugh when I went to the restroom as it consisted of nothing more than a ceramic hole-in-the-ground. All through the trip, the male delegates (ha!) have been marveling at the state-of-the-art bathrooms in our hotels, with heated toilet seats, luxurious tubs, glass enclosures that allow you to raise and lower a shade to be seen or not. I couldn't wait to return to the table and invite my colleagues to use the facilities!

We topped off the evening with a visit to a cool jazz spot in the heart of Shanghai, JZ Club. It was an authentic jazz club, like anywhere in the world. The staff go out of their way to welcome international musicians so they can feel at home, so far from home. It was the perfect way to unwind and take stock of China's vision of its musical future. 

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Trade Mission Moves On To Hong Kong

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THE GRAMMYs
GRAMMYs
Dec 2, 2014 - 3:22 pm

(Recording Academy Trustee Ruby Marchand is among the delegates participating in A2IM's Trade Mission to Asia. The mission originated from an A2IM/Recording Academy Indie Day on Capitol Hill in 2010 that resulted in a government grant for the trade initiative. Her blog will document her experiences representing The Recording Academy as the mission travels from Seoul to Hong Kong in an effort to increase exports by small- and medium-sized independent music businesses based in New York and Tennessee.) 

Tuesday, Sept. 11:

We met in the Shanghai hotel lobby at the unspeakable hour of 5:30 a.m. for the flight to Hong Kong. Surprisingly, there wasn't a grouch in sight. We were approaching the final leg of our journey and were already feeling a touch of nostalgia. Plus, many of us had been to Hong Kong before. The natural beauty of the city, combined with its soaring, elegant architecture, was something we couldn't wait to re-experience.

Once the plane started its descent you could hear first-time passengers whistling at the sight of the lush islands and exotic peaks that surround Hong Kong. Suddenly, the immaculate skyline and aristocratic sprawl of the city came into view. 

We hit the ground running and went to the first session of the HK mission before we could access our hotel rooms. As soon as we arrived at the venue, the local Hard Rock Cafe, we felt like we were home. This initial event was sponsored by our convivial HK hosts, Branded Asia and Music Matters, along with Invest Hong Kong, the local government counterpart to our own Office of Economic Development.

Jasper Donat opened the event by welcoming our delegation to two days of historic conferences in Hong Kong. Donat is the CEO of Branded Asia, a company that provides sponsorship and branding opportunities for entertainment companies. He is also the president of Music Matters, an annual event in Singapore that is similar to SXSW in its scope of attendees, performances, conferences, and networking opportunities for the Asia Pacific region.

Andrew Davis, associate director-general of Invest Hong Kong, gave a detailed presentation on why Hong Kong is the strategic hub for businesses eager to make a mark in the Asia Pacific region. As successful as HK already is in attracting companies from all over the world, Invest Hong Kong foresees even more opportunities for in the years ahead.

After Rich Bengloff, Seymour Stein and I gave our remarks, each A2IM delegate made a short speech introducing their label and the independent artists they represent. We were then treated to a spirited presentation by a panel of premiere music experts: Kieven Yim, a marketing consultant for Sony/ATV Music Publishing; Tony Ward from Man On The Ground and Music Matters; Carl Parker, managing director of ToCo Asia (a company providing agent, booking and label services); Tommy Chan, founder & CEO of Love Da Group Company Ltd (a pre-eminent local label); David Loiterton, managing director, Asia Pacific, Omnifone (a leader in mobile entertainment); Chris B, founder of the Underground (a live music showcase), and director of HKGFM.net (an indie promoter); Scott McLean, managing director, International Sound & Light (an international promoter); and May-Seey Leong, regional director, Asia, of IFPI.

The panel was moderated by Donat, who asked incisive questions about the Hong Kong market and its relationship to China and other Asia Pacific countries. Unlike our visits to Seoul and Shanghai, in which the local participants were focused on Korea and on China, Hong Kong's value as a center of commerce for Asia Pacific meant that two separate threads ran parallel at all times; one uniquely for the affluent Hong Kong market, and the other for Hong Kong's pivotal ability to navigate business opportunities throughout the region.

The advice given to us by local experts could be distilled down to this: get to know the Asia Pacific markets one at a time. Look at the business models that are actually working in each market. Be prepared to adapt your thinking and your way of working. Learn what local consumers are expressing interest in and tailor your business approach accordingly. Above all, be patient, and find partners you can trust.

Here are some other key takeaways: 

• Hong Kong is primarily a pop market. Although many people speak and understand English, 98 percent of the population speaks Chinese as their first language. It's important to include Chinese as an integral communications platform for any online/social media outreach, especially to promote touring.

• YouTube is the most powerful platform in HK. Radio plays an important role and streaming is gaining strength locally and regionally. While streaming is currently at 1.7 million users, it is anticipated to grow to 77 million users throughout Asia by 2016.

• HK collection societies are generating income and all major publishers are represented here. Synch licensing is a growing business that is helping to influence publishers to sign local artists.

• Digital piracy in Hong Kong continues to be a big issue due to problems with legislation. A strong law needs to be passed to take action against piracy. Once piracy is brought under control, the expectation is that HK will become a massive digital market.

• There are no English-language FM music channels in HK. Corporate sponsors are the key to promoting live music. The key to touring successfully is for an artist to commit to several visits and grow an audience over time, as an investment.

• Lastly, the panel agreed that Hong Kong is a more international market than China or Korea, but it's on a smaller scale. When it comes to introducing an artist to Asia Pacific, Hong Kong is a great place to start.