Monetising music to overcome piracy

When music in Myanmar is free, why would anyone pay?

By INDI DAVIS | FRONTIER

AS MYANMAR’S digital economy heats up and tech players vie for a share of its base of smartphone users, issues surrounding pirated content are being pushed front and centre. What is the cost to the industry as a whole when pirated content is the default channel for consumers? Why would users pay for content when they don’t have to?

These questions form the central concerns for the music industry in Myanmar. They touch on complex issues, but the overall answer is simple: monetise music content. And with the help of the tech industry, this isn’t as difficult as it might seem.

Despite copyright enforcement efforts by Pro Music and the Myanmar Music Association, the smartphone revolution is accelerating online piracy. Experience elsewhere shows it’s impossible to eradicate pirated content, but it is possible to present users with consumption options that outweigh the perceived benefits of pirated content. Examples from within the tech industry in other markets, such as Apple Music, Spotify and Pandora, have demonstrated that the music industry can challenge piracy through streaming and download models.

The cost of piracy to the music industry as a whole is significant, but it’s most keenly felt by artists. In Myanmar, the music scene already offers limited channels for them to generate income, such as live shows, brand endorsements and caller ring back tones. When the majority of fans are consuming content via pirated channels, the possibilities for earning a decent living off their hard work are compromised even further. If nothing is done to address piracy in Myanmar, artists simply won’t be able to make a living from their craft. And without their talent, there won’t be an industry.

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The major concern for the music industry, content providers and tech players should therefore be how to entice a user to pay for something they can get for free. This is where the value proposition plays a crucial role: to create a compelling alternative to pirated content, we must determine what constitutes value to the end user, and how this can be delivered as an appealing alternative to the status quo.

If we are to consider the root of the behaviour that fuels piracy, we get a stronger picture of the core drivers. Piracy is powered by an increased demand for current, of-the-moment and up-to-date content. Users demand ease-of-access and want content available to them as soon as it is available online in markets such as the United States and United Kingdom. Therefore, we can identify the two core value propositions for online music consumption: easy access (convenience), paired with relevance, newness and breadth (value).

As seen in several other markets, and now in Myanmar, flexible revenue models, such as those offered by mJams and Spotify, which help content creators to connect with their audiences, are shifting the model. Through these delivery models, publishers such as Universal Music Group, Sony and Warner Music – which supply content to mJams for Myanmar – have adapted their distribution businesses to suit demand. As a result, they have regained control over their content and their capacity to monetise their material.

We are already seeing a fundamental shift in the dynamics of the music industry in Myanmar, primarily driven by the rapid expansion of internet use. The first step has been the formation of music regulatory bodies – the Myanmar Music Network and Pro Music – to centralise recording industry oversight, represent artists, and collaborate on introducing new copyright laws for locally and internationally produced content.

While Myanmar and Southeast Asia as a whole have a long way to go when it comes to music streaming and downloads services, the success of the first movers is compelling.

Services that understand the mobile-first approach, paired with well-curated content, quality tech and an affordable price, are getting cut-through across Southeast Asia. Locally, mJams became Myanmar’s first music streaming app when it launched in April. It now boasts 300,000 users, who each pay K90 – less than 10 US cents – a day for unlimited streaming on the Ooredoo network.

With a fixed subscription fee for users for unlimited streaming, mJams generates flat revenue per month. The total revenue accrued from subscription fees is then shared amongst the content providers based on the volume of streams. This way, the more that a particular artist’s content is played, the more the artist is paid.

But mJams could soon face some competition in the market, with Apple Music said to be preparing to launch its service in Myanmar. The global giant could enter at an even lower price point, one more aligned to the average revenue per user for telco services in Myanmar, which stands at about K6,000 a month.

An important factor in the success of these services will be the use of carrier billing as the payment method, with the daily or monthly fee is deducted from top-up credit. This means those without bank accounts or credit cards can still access the service, which is particularly important in a country like Myanmar, where only 10 percent of people have a bank account.

The continued growth of internet use in Myanmar will only increase demand for the latest content. Behavioural change among users requires new delivery models from publishers. Fortunately, the opportunity for these models to benefit the music industry is enormous. Services able to challenge piracy will benefit the music industry, telecom operators and consumers.

With funds invested back into the music industry through monetisation, the future looks bright for recording artists, producers and publishers – and also those who are able to innovate within this space.

This article originally appeared as part of Frontier’s Digital Myanmar 2016 special edition.

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