Soundbuzz opening Asia digital boom box

Singapore-based co. offering 300,000 songs

By PATRICK FRATER

HONG KONG -- As Soundbuzz, which claims to be Asia's largest online music retailer, on Wednesday became the third company to offer legal downloads in Hong Kong, analysts and executives were queuing up to beat the drum for the ballooning digital content economy.

Singapore-based Soundbuzz is offering Hong Kong consumers 300,000 songs, including Canto- and Mando-pop, European and international titles at a cost of HK$8 ($1.03) per track or $9.65 for an entire album.

Analysts at the launch forecast not only a boom in legal online music sales but that mobile music sales in Asia will exceed physical sales by 2008. As usual, South Korea leads the way. Its $3 billion market has already seen mobile and online music overtake CD sales. While consultancy group PricewaterhouseCoopers forecasts that Europe will remain the world's largest music market, it predicts that Asia will be the fastest growing at 15% a year to 2009.

Key to Asia's boom, and a likely indicator of things to come in other territories, is the rise of mobile music and the diversification of the ways in which music can be sold.

"In Asia, music is being licensed for people's online avatars, as backgrounds to messengers and for gaming platforms. This is not present in the U.S., and new business models are emerging," said Soundbuzz CEO Sudhanshu Sarronwala.

World of Internet cafes

"In China 100 million people access the Web through Internet cafes. For them it is not about downloading, it is about the experience. In the U.S., it is still all about ownership," said Ruuben van den Heuvel, veep of digital business Asia at Sony BMG.

In Japan 2 billion polyphonic ringtones were downloaded in 2004. By the first quarter this year telco China Mobile had signed up over 40 million subscribers to "color ring back tones," products which personalize the sound that callers hear while ringing a cell phone user. And Korean phone companies forecast sales this year of 10 million MP3-equipped handsets -- a figure five times higher than the number of stand-alone music players.

Execs were quick to talk up technologies that could be adopted by the movie industry. "The combination of IP blocking and payment checking means we are able to prevent extra-territorial buying in 99.5% of cases," said Sarronwala. Film distributors have long feared that their territory-by-territory-licensed pictures if distributed via the Internet can be accessed across bordersChris Shim, CEO of Korea content provider Yurion, said, "Creators are now producing portable content, shorts and micro-dramas. Sales of TV dramas are now happening, and we expect this to precede movies."

Other technological advances are expected to blur the distinction between players and phones. Cell phones with 4 gigabyte storage capacity are already in the market in some Asian territories, providing over 50 hours of music-playing capacity.