Staying in tune

Dinesh Ratnam, managing director of Warner Music Malaysia, says the record label has a proven track record of nurturing and launching artists onto the regional stage.

THE global music market has been enjoying an impressive uptick in recent years. According to a report released by the International Federation of the Phonographic Industry (IFPI), global recorded music revenues increased by over 10% in 2023.

IFPI — the organisation that represents the recording industry worldwide — stated that gains in the segment were driven largely by growth in paid streaming subscribers. The organisation’s Global Music Report also shows that total trade revenues reached US$28.6bil (RM135bil) in 2023, the ninth consecutive year of growth.

Revenues for Asia, the third largest region globally, rose by 14.9% in 2023, stated the report. According to IFPI, the multi-year upward trajectory in the region was driven by strong gains in physical and digital revenues. Japan and China — the two largest Asian markets — saw growth of 7.6% and 25.9% respectively.

Music in Malaysia

On local shores, the music industry has also been enjoying impressive growth. Dinesh Ratnam, managing director of Warner Music Malaysia explains that last year the industry reached new heights with a record-breaking revenue of RM303.89mil. This marks the industry’s highest gain since the previous record of RM300mil in 1998.

“This surge indicates a thriving and dynamic music scene,” states Ratnam. “Malaysia’s music scene boasts a wealth of untapped potential and a vibrant pool of talent.”

Eager to capitalise on the market, Ratnam elaborates that Warner Music Malaysia is constantly on the lookout for talented artists with the potential to captivate audiences not just locally, but across South-East Asia.

In identifying and selecting local artists that can potentially succeed in regional markets, Warner Music Malaysia is deploying its attention across several areas. “We have a dedicated A&R (Artists & Repertoire) team that actively follows the Malaysian music landscape, attending live shows and listening to demos.”

According to Ratnam, this constant vigilance ensures that the label is able to discover the freshest talent. Additionally, the company also leverages data analytics to gain valuable insights into music trends, streaming activity, and audience preferences across South-East Asia.

“This data helps us identify artists with a sound that resonates not just within Malaysia, but with broader regional tastes,” he adds.

Other areas Warner Music Malaysia looks at are live performances, which are able to offer a unique window into an artist’s stage presence, fan engagement, and overall connection with the audience.

Another factor taken into consideration is the artist’s potential to transcend language barriers. “We also assess an artist’s willingness to collaborate with regional artists and producers. This collaborative spirit can be a powerful tool for tapping into existing fan bases and incorporating diverse musical influences.”

Technology as a conduitThe rise of technology including the exponential growth of streaming platforms alongside established digital service providers has helped transform the music industry extensively. Music has now become more accessible and it has empowered creators to produce and distribute music independently.

“Digital everything has changed the way we live, work, shop and ultimately consume entertainment, and the music industry is no stranger to this,” adds Ratnam. “While it’s true that 99% of music sales in Malaysia are digital, with streaming platforms dominating the scene, we view this as a long-term opportunity rather than a short-term hurdle.”

The managing director explains that streaming of a track or album can generate more revenue than a sale over time. “Streaming payouts may be lower compared to traditional CD sales. For instance, one million YouTube views might generate RM2.5-4k, while a million Spotify streams might yield around RM4k. However, unlike CDs, which are a one-time purchase, streaming offers a powerful advantage: recurring revenue streams.”

Because of this, a song streamed today can continue to generate income for years to come, building a valuable and sustainable asset portfolio for the artist.

“While we leverage the reach and revenue potential of streaming platforms through close collaboration with DSPs (Digital Service Providers), we also recognise the need for a diversified revenue strategy.”

Ratnam explains that Warner Music Malaysia strategically partners with brands to develop engaging campaigns that leverage the power of its artists’ music.

“This ‘sync licensing’ allows brands to utilise music in commercials, films, and other media, creating a win-win situation for both the brand and the artist.”

The company is also actively exploring new revenue outlets. “We are constantly on the lookout for innovative ways to monetise music. This includes exploring new technologies, digital merchandise opportunities, and other emerging revenue models that can benefit our artists and the industry as a whole.”

Power of social media

Labels like Warner Music are leveraging off the popularity of social media to grow the reach and fan bases of its artists and Ratnam admits that it has become a prominent source of music discovery in today’s world.

“While radio once held the reins, platforms like TikTok and Instagram Reels now play a major role in how audiences find new music.”

He reveals that there has been a significant increase in streams for Warner Music Malaysia’s artists on platforms like Spotify and Apple Music in key South-East Asian countries like Indonesia, Singapore, Taiwan and Vietnam. “This indicates that their music is resonating with audiences beyond Malaysia,” he adds.

“Engagement on these social media platforms is another key indicator. Viral trends featuring our artists’ music, collaborations with regional influencers, and a growing online fan base across Asean are all positive signs.” Ratnam points out the label’s recent hit ‘Sah’ as an example.

The song by Sarah Suhairi feat Alfie Zumi initially topped the Malaysian charts but it exploded on TikTok, garnering over 1.3 million creations and a billion views. This viral success propelled the song to #35 on the Indonesian Spotify charts, showcasing the immense power of social media discovery.

Although free music usage on social media might seem counterintuitive, Ratnam opines that it is a strategic tool for maximising discovery and building a sustainable music ecosystem. “It’s important to consider the long-term benefits,” he stresses.

“Social media exposure fosters organic growth and this translates to increased streaming activity, potential brand partnerships, and ultimately, ticket sales for live shows – all significant revenue streams for both the artist and the label.”

Additionally, Ratnam also reveals that Warner Music Malaysia does have established global licence deals with these social media platforms.

“This ensures compensation based on the volume of our artists’ music used. This model ensures fair value is derived from the massive audience these platforms reach.”

Extended reach

Although Ratnam admits that the democratisation of music creation is fantastic for artists, this has also led to an explosion of content. The sheer volume of new music being uploaded daily creates a hyper-competitive environment.

“It’s become incredibly challenging for artists to not only break through but also to maintain visibility and sustain their careers,” he explains.

Partnering with global record labels like Warner Music Malaysia can ultimately produce a strategic advantage. Ratnam believes that artists gain access to an extensive global infrastructure including analytics tools, marketing and promotional expertise along with significant funding to propel their careers forward.

“It’s like having an entire team supporting you at every stage, from development and breakthrough to achieving long-term success. For example we provide access to dedicated teams skilled in securing lucrative brand and sync deals, further amplifying artists’ reach and income potential.”

Ratnam admits that in today’s music market monetisation extends beyond the confines of album sales. As such the label actively explores touring opportunities, allowing artists to not just connect with fans on a deeper level but also generate revenue through live performances.

“Warner Music Malaysia has a proven track record of nurturing and launching artists onto the regional stage. By partnering with us, artists can focus on creating exceptional music, while we leverage our expertise and resources to navigate the complexities of the music industry, maximising their reach and ensuring long-term success.

“While it’s true that 99% of music sales in Malaysia are digital, with streaming platforms dominating the scene, we view this as a long-term opportunity rather than a short-term hurdle.”

This article first appeared in Star Biz7 weekly edition.