MUSIC MATTERS: PLUG INTO ASIASPOTLIGHT ON PUBLISHING

27th May 2010
Grand Hyatt Hong Kong
Hong Kong

SPOTLIGHT ON PUBLISHINGMUSIC MATTERS: PLUG INTO ASIASPOTLIGHT ON PUBLISHING

Publishers from the Music Publishers Associations of Hong Kong, Japan and Korea give a unique
update into the key issues facing the Asian publishing industry.
Moderator:
KO⇒ Ken Ohtake, Director, Music Publishers Association of Japan / President, Sony Music Publishing (Japan)
Inc.)

Speaker:
JH⇒ Jonathan Ho, Chairman, Music Publishers Association of Hong Kong / Director, Asian Music Publishers
Ltd / General Manager, Fujipacific Music (S.E. Asia) Ltd

YY⇒Young Yu, Chairman, Korea Music Publishers' Association / Managing Director, EMI Music Publishing
Japan & EMI Music Publishing Korea

HJ⇒

Haji Taniguchi, Vice-Chairman, Music Publishers Association of Japan / CEO, Avex Music Publishing Inc.

Notes:
Composers and Authors Society of Hong Kong (CASH)
Asian Music Publishers Ltd. (AMPS)Music Publishers Association of Hong Kong (MPA HK)
China AudioVideo Copyright Association (CAVCA)Music Copyright Society of China (MCSC)
Korean Pop Music (Kpop)( ) indicates recommended insertion of English word or expression

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KO: ...we'll be talking about the brightside of the Asian music industry. We
have three people here today. First of all,
I would like to introduce to you Mr
Jonathan Ho, Chairman of MPA Hong
Kong since 2006. (On the) AMPS Ltd
board, CASH board, director of
Fujipacific South-East Asia. He is
known as the distributor of newsletters toover 50 international music publishers
updating the Asian music industry scene.
If you want to subscribe just let him
know after the panel. Jonathan, can you give some updates from your territory?

JH: Hello, good afternoon. I'm Jonathan Ho from Fujipacific South-East Asia, and I'm also the
Chairman of MPA Hong Kong, and also I'm on the board of the performing rights society, CASH.
Also we have a regional MPA called AMPS with quite different rules. Let me briefly introduce eachassociation’s role in South-East Asian countries, and also Hong Kong.
CASH is a very well-established performing rights society in Hong Kong and has been wellrecognized in helping other territories’ societies to grow with the performing rights licensing
business. MPA Hong Kong has currently 27 members in Hong Kong, and most of the members are
multinational publishers with offices in Hong Kong and also some local publishers. From time totime we negotiate industry matters and also we conclude some blanket deals for TV synchronisation,
also some blanket uses to facilitate the use of musical works.
Also MPA has been (working) in line with the society CASH to work on joint licensing platforms tofacilitate digital use. So, all through the years, the cooperation between MPA Hong Kong and CASH
has turned into a very good success. Also it helps the user make good use of this kind of one stop
license.
Regarding AMPS, this is the regional MPA. Since Hong Kong has been the headquarters for quite anumber of regional companies stationed (here). About 15 years ago, several regional publishers
started this AMPS. The aim is to help other South-East Asian countries. AMPS has helped thegrowth of some major countries whichhave the copyright system. We havedrawn up industry agreements for
Thailand, Malaysia, Singapore andIndonesia. So along the years AMPS
has been playing a very important rolein helping other countries. Also weare trying to (develop) successfulmodels in Hong Kong.
So that’s the general situation of each society and also the association.
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KO: Thank you Jonathan. Next we have Mr Young Yu, Chairman of KMPA since last year. He is
fluent in Korean, English and Japanese, so he is the MD of both Korean and Japanese EMI Music
Publishing. This is his first time to (appear) in the music conference. So, please welcome Mr YoungYu.
YY: Thank you very much Ken. I'm Young Yu, Managing Director of EMI Music Publishers in
Korea and Japan. I'm also the Chairman of Korean Music Publishers’ Association. As we obviously
know the music industry has been facing a great threat triggered by new technology. We have seen
the industry shrink, even collapse for years. Probably no one wants music to perish. With such atechnological development of IT networks, online distribution of illegal reproduction has been
rapidly increasing. This is distorting the market of music which in turn is undermining the incentive
to create such works and toinvest in them. Today, I
would like to briefly introduce
the bright side of copyrightaspects and related industry
based on the recent new
amendment of copyright acts,
and the positive effects ofthese in Korea. Could you pop
up the slides?
Last year there was an amendment of the Korean Copyright Act which was intended to prevent
illegal reproductions online by strengthening preventative measures. We can simply compare before
and after (in regard to) the amendments in the table here. (Table 1) There are two different laws to
deal with this: new media and online activities. Now these have been consolidated into new
copyright acts. Accordingly, they have been established into a consolidated party called the Korea
Copyright Commission. I would like you to pay attention mainly to the enhancement of measures toprevent illegal reproduction
Table 1
online.
Firstly, correction orders:Correction orders wereintroduced against illegal online
reproductions. The government
under the name of the Ministryof Culture, Sports and Tourism(MCST), may order online
service providers as follows: toissue warnings against illegaltransmitters, to delete illegal
reproductions or suspend theirtransmissions, to suspend theaccounts of such illegaltransmitters, and to suspend
MUSIC MATTERS ‘102009’s Amendment of The Copyright Act(1) Main Contents of the Amendments effective on July 23, 2009
Section

BeforeAfter

Law

Copyright Act &Computer Programs
Protection Act

Copyright Act

Committee

The C opyrightCommission &The Korea Software
Copyright Committee

Korea Copyright C ommission(aka ‘KCC’)

Limited Measures

Enhanced Measures- Correction orders to OSPs by MCST-“Three Strikes & Out”
- Correction recommendations to OSPs
by KCCTo prevent
illegalreproductions
online[Based on 20 09 Annu al R eport on Cop yright in Ko rea]

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bulletin board services. The Korea Copyright Commission may issue correction recommendations togive online service providers the opportunity to take measures voluntarily.
As I briefly mentioned, concerning the correction orders, there are four sections. The first one iscorrection orders directed at online service providers by MCST, the government. The orders are todelete or to suspend transmissions and issue warnings against illegal reproductions. The order tosuspend accounts means that if an illegal transmitter who has already received three warnings fortransmissions of illegal reproductions still continues to transmit these illegal reproductions, thegovernment may order the online service provider to suspend the accounts of the illegal transmittersin question. Next please.
The Korean government iscracking down on illegal use bothon and off line including
investigations into
implementation of required
technological measures. Also they
have set up the IT based
protection system to track andmonitor illegal reproductions.
There is a clean site project withprivate companies. I will mention
these again later.
This chart clearly shows theimpact after changes of the new
copyright acts according to 2009
annual copyright report by MCST
which was issued last month.
(Table 2) There were 26 cases of
warning issues, and also 26 casesof deletion and suspension oftransmissions after July 2009 formusic contents. Next please.
In the case of distribution channels
there were numerous activities
concerning correction
recommendations of illegal online
reproductions as can be seen in thistable. (Table 3) Next.

Table 2

<Result of correction recommendations
on illegal online reproductions in 2009>- By contents: Music Correction recommendation
Classification‘09

ResultWarnings
issuedDeletions / Suspensions oftransmissions

Account
suspensions

Before July 23

Music

-

-

-

-

After July 23

Music

52

26

26

-

3 0

B e fo re

2 5

A fte rJ u lyJ u ly2 3 , 2 0 0 9

2 3 ,

2 0 0 9

2 0
1 5
1 0
5
0

W

a r n in g

Is s u e d

D e l e ti o n s /S u s p e n s io n s o f
tr a n s m i s s io n s[Unit: Case]A c c o u n t
S u s p e n s i o n s

Based on 2009 Annual R eport on Copy right in K orea]

Table 3<Result of correction recommendations
on illegal online reproductions in 2009>- By distribution channels Correction recommendation
Classification

ResultTotal
Web storage

Warnings
issuedDeletions / Suspensionsof transmissions

Account
suspensions

35,345

13,466

21,84039

33,644

12,612

20,995

7

P2P

773

579

194

-

Portal

928

275

651

2

2009

[Unit: Case][B ased on 2009 Annual R eport on Copy right in Korea]

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Clean site refers to online contents
providing sites that distribute only
legal works by managing themselves in<Result for ‘Clean Sites’ projects>
compliance with legal procedures.
(Table 4) Some of you may know
<Designated Clean Sites in 2009>
Soribada in number 7 which was
Clean Sites
URLs
Areas
originally a P to P file sharing site.
1
Cinero.Com
www.cinero.com
Movie
This used to be highly notorious for2
Mnet Media
www.mnet.com
Music
3
Hupis Softwww.piuri.com
Publicationillegal free download sites a couple of
Education
4
Mega Studywww.megastudy.net
5
MW Story
www.gamefos.co.kr
Gameyears ago. Now they are in this kind of
6
Neowiz Bugs
www.bugs.co.kr
Musicclean site. Probably everyone is7
Soribada
www.soribada.com
Music
8
Book Cube
www.bookcube.com
Publicationinterested in what is the most effective
tool for preventing illegal uses and intrying to take back the market. The
recent case of the reinforcement of the
Korean Copyright Law would be one example together with the consideration of measures to boost
the motivation of artists, writers and production houses in the music industry. Thank you.
Table 4

Websit e on ‘Clean Sites’: www. clean s ite.org[Based on 2009 Annual Report on Copyright in K orea]

KO: Thank you, that was very encouraging. Next up we have Haji Taniguchi from Japan. He is theVice-Chairman of MPA Japan and three times champion of the annual MPA bowling tournament. He
was born in Japan, and raised in Nashville, Tennessee. He recently became the first CEO of newlyborn Avex Music Publishing.

HT: I’m a four-times champion.

KO: Oh I'm sorry.

HT: My name is Haji Taniguchi.
I was recently appointed to be theCEO of the newly establishedcompany called Avex Music Publishing which I enjoy a lot. I’d like to give you some updates for theJapanese market. There isn't really very much to report but I would like to talk about two things. The
first is that there is a slight copyright law revision. On top of the uploading of the music to illegalsites being illegal, now, downloading it from illegal sites is also recognized as illegal in Japan. Thiscame in this year but it came in without any penalty provisions. So we now have to think how we can
impose this new law. Now another thing is, there is a new site which was created by Music
Publishers Association of Japan together with FMP, Federation of Music Producers and JAME,Japan Association of Music Enterprises. Could we see the site please?
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It is called Sync Music Japan and it
basically introduces not only music fromJapan but also the artists behind the music,
and gives the opportunities for Japaneseartists and music to be introduced to themarkets overseas. We’ll probably talk about
Korean acts being very active and successful
in other territories later, but Japanese artists
and music creators finally came to realisethat it was important to introduce(themselves) overseas. I believe a brochure
introducing this website is available
somewhere out there so please grab one andintroduce it to your colleagues when you get
home. Other than that there isn't anything. No negative things, no positive things whatsoever I guess.

KO: That means it's positive. I would like to have a few discussions that may be of interest to you. It
seems like that we may be able to collect some money from China. There's a society called CAVCA
that has just started. And I heard a new admin system called Diva recently has been introduced. So
have we now started to receive royalties from China?

JH: Let me explain the Diva system. It is a CASH computer in-house system that they developed in
2004. It has worked very well with the publishers. The CAVCA is an association (which deals with)audio and visual rights. It is a collective management association in China. Its first aim was the
karaoke licensing in China. And so far it has collected quite a (fair) amount of karaoke income
within China. And they also distribute part of the income to the society in China called MCSC.
Through MCSC part of the publishing income has been paid to the affiliated associate societies ineach territory. So far in Hong Kong we have already got the income through the society CASH fromthe CAVCA licence revenue on karaoke uses.

KO: It seems like there are some interesting activities in the Chinese music industry. Such as 2 Museis like Usen in Japan. I think Avex has been quite active in that territory as well. Do you foresee a lotof business regarding recording music in China?

HT: I'm hoping so, yes. It is a very tough market as everyone knows. For the past couple of years I
have seen lots of changes. The CAVCA situation is one of them, collecting money from karaoke
places. I believe now the government is kind of forcing broadcasters to pay broadcasting fees as well.
Monetising music in China is very difficult still but the situation has just changed, and I believe it's
going to change further in the years to come.
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KO: These stories are based on (the panels’) experiences. If there are any other opinions (out there)that you may have, please let us know later. From the Korean music industry, do you have a lot oftransactions with the Chinese download companies or digital distributors?

YY: Not much I think. Korea is a very tough market as well. So the Chinese music, even Japanesemusic has a very limited market in Korea. It is not a positive aspect.

KO: Jonathan, is mobile penetrating digital downloading in China, or is it mostly PC?

JH: Mostly mobile. And much of the revenue is staying in China.

KO: So people use the mobile telephone as a device to listen to music? Or are they listening on an
MP3 player like iPod?

JH: Yes, both.

KO: Haji, what about in Japan? Are things changing about the penetration of digital downloading
between PCs and ...?

HT: Yes, I see a slight change. Of course the Japanese market... As far as the downloading of music
is concerned, more than 90% of that was downloaded into mobile sets rather than PCs. Digital
distribution is now starting to shrink in Japan. So in general everything as far as downloading isconcerned is shrinking, except that downloading into PCs may be stable or even (rising) I believe, alittle bit. I never thought of this but someday soon there may be a day when downloading into PCs is
more than 50% of the entire downloading (market).

KO: What about in Korea?

YY: Actually in the case of Korea, the digital market really dominates the whole music market
because the Korean government has supported the infrastructure for so many years. The difusion ofMUSIC MATTERS ‘10

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high-speed Internet access is available nationwide all over Korea. This kind of new technology
allows the Korean people to access more of the digital market.

KO: So inside Korea I heard that a lot of industry people are struggling because of the size of themarket. But there is the obvious issue that the only Asian content that can travel outside of its own
country seems to be from Korea. Why are the Korean contents well received in Asia and some other
territories? Producers... a group called JYP are now starting to travel to America to do something. A
lot of people are watching Korean soap operas, dramas. Why do you think it is only Korean content
that can travel?

YY: Well, sometimes I am asked why the Korean contents are so popular in Asian territories, oroutside of Korea. Maybe rather than me, foreign countries know the positive objective aspects better.
Honestly, I think is very interesting that Korean contents are so popular in Asian territories because
Korea is a very small country in Asia and still divided into two countries within one peninsular. I
would like to try to analyse the main reason.
The first thing is the mental and religious aspects. Almost 25% of the Korean population is Christian.
Korea has various cultures with both Oriental and Western values. It has very many religions such as
Christianity, Buddhism and Confucianism. I think, speaking of Christianity, it is kind of blessing
from God. Hallelujah.

KO: We all have to be Christian!

(laughter)

YY: Yes. The second thing is the industry aspect. Once some Korean TV series starts to be abreaking hit in China or Japan, many firms and capitals concentrate on the related industries
supported by the government, and a huge budget and well-known stars, superstars are hired forminga virtuous circle that stimulates consecutive breaking hits again. When it comes to planning TV
series, the Korean productions try to bring systematic production methods based on the analysis ofusers’ psychological behaviour patterns.
I think lastly, it is the promotional aspect. Through the Internet we are able to live in the same virtualworld, at the same time we get a lot of information from websites. It would be very helpful for the
Korean contents to be recognized as huge, and (help) breaking hits outside Korea.

KO: I think Korean artists as well adapt really well to each market. In Haji’s company I think one of
the biggest revenues is from Korean artists. Maybe they can sell more CDs than Lady Gaga plus
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Britney Spears and everyone (combined). How can you sell those international acts, if you consider
Korean artists as international acts?

HT: If I compare Korean artists or Korean producers to Japanese ones, there are a couple of things
that I have recognized. The first one is the strong governmental support which the Japanese musicindustry is lacking. The second one is the seriousness to enter other markets than Korea’s own
market. For Japanese producers or artists for example, we tend to think the Japanese market as theprimary thing and any other markets overseas as secondary. But for Korean artists it looks like they
are considering any market in the world as a primary market. Sometimes, let's say this Korean act
will only work in Korea. Sometimes this Korean act will not only work in Korea but also in Japan.
Sometimes this Korean act will work in Japan but not in Korea. And Korean producers seem toeasily think that way so that they can give the right market to any artists or any projects.
In the case of Korean artists that are signed to Avex Japan for the Japanese market, they are so welltrained to suit the Japanese market. They are not sacrificing their artistic life in their own country butat the same time they are trying to be very successful in Japan. Other Korean acts I know are very
successful in China and Taiwan. K-Pop is very strong in Taiwan currently. Those acts know how todeal with those particular markets. I think it is a natural thing for them.

KO: So they are very well trained and they work very hard. But other than that I heard that the
Korean government support is huge. They purchased the broadcast time in Vietnam to promote the
Korean contents such as drama. And through promoting and broadcasting drama they also managed
to sell more Samsungs, or more LGs, or more Hyundais. So we really envy (the fact) that the Korean
government gives such a big support for the entertainment industry. Have you had the same supportin Hong Kong?

JH: Unfortunately, with the Hong Kong government we once talked to the Trade Development
Council of Hong Kong about promoting the music industry of Hong Kong and so far they have
responded by helping the Hong Kong music industry by having a music Hong Kong Fair which has
been held in March every year together with the Hong Kong Film Festival. So these are the kind oflittle things that they have done but so far outside Hong Kong it seems we still don't have muchsupport from the Hong Kong government unlike other countries.

KO: A lot of European countries also are very supportive sending delegates to Hong Kong or Japan.
In Japan there are various countries that do that annually. Do you get people from Europe coming toHong Kong as well?

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SPOTLIGHT ON PUBLISHINGJH: Yes, I think two to three years ago when we had the Hong Kong Fair we had some organisations
from Germany. And they travelled half way across the world to come to Hong Kong and to look at
the market of Hong Kong. They saw Hong Kong as the gateway to China at that time. But the musicfair is more for the local Hong Kong companies and attracts the people from southern China besides
the local Hong Kong companies. It may not be that interesting for international companies. But westill see some organisations from such countries that support them in their (own) origin.

KO: Wherever there are governments who are not (adequately) supporting the entertainment
industry, please listen to this and we hope that someday we’ll get better support. The reason why wepicked up on the Korean success is from the publishers’ point of view. Korean content uses a lot ofmusic. And, publishers and songwriters are not only earning money from CDs but also from syncs,
drama DVDs, films, and all the performance incomes. So it’s very important to have the businessmodel of what Korea has achieved in other territories including Japan, China, and other parts of Asia.
Some day we will have a big income success from the Asian contents in America and Europe andaround the world.
Do you have anything to add today?

JH: I think I agree with you. I'd like to add a little comment about the Korean government. It does
help a lot to promote cultural developments. They set up a cultural office in Thailand, in Indonesia,
in each country to help promote their TV series. Their TV series are very influential in promoting
their by-products. In Thailand there are many Korean restaurants and many Korean magazines ormedia related to the TV series. So that is why the Korean music and movies have been doing quite
well in South-East Asia.

KO: Good, thanks Jonathan. As for our panel, if there are any questions I think we can pick up a few.
How can we do this? Are there any questions for any of these three people? No? Okay. Maybepeople want to sell their music directly to them after the panel. So thank you very much and we arenow (finished).

Applause
END OF SESSION

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