KKBOX, Taiwan’s largest cloud-based music service provider, yesterday said it planned to expand to more Asian countries by the end of the year.
After entering the market in Hong Kong, Macau, Singapore, Malaysia and Japan, the company is now in talks with CD retailers in the Philippines, China, Vietnam, Thailand, Indonesia and Australia to bid for music distribution permission in their local markets, KKBOX Asia-Pacific managing director Alex Wang (王正) said.
“We will collaborate with more local telecom carriers in Asian countries to promote our services and expand our market share in the music streaming industry,” Wang said at a corporate event.
Citing Thailand and Indonesia as examples, Wang said the two countries still lack advanced telecommunications infrastructure and there are few people using high-tech mobile devices, such as smartphones and tablets.
“As people in many Southeastern Asian countries still have limited purchasing power, the growth potential for technologies like PCs, mobile devices and applications on different platforms is huge,” Wang said.
However, KKBOX Taiwan vice president Phillip Shih (施盈良) said breaking into the Chinese market will be a challenge.
“In China, there are too many people with Internet access who can listen to illegally copied music, a practice that has become a major concern for the company when entering a market,” Shih said.
Shih said the uncertainties facing KKBOX when venturing into a new market such as China include low returns on investment, difficulty obtaining distribution right from recording studios and retailers, and local Internet users’ online habits.
KKBOX now has up to 10 million songs on its database, 10 million members who enjoy five free songs a day and 1 million paying subscribers, the company said.
Japan, where the company launched its services on June 1, is expected to soon replace Taiwan as KKBOX’s largest source of revenue, since the country has a strong demand for streaming digital music and a more advanced telecom network, Wang said.
Citing a report released in April by UK-based market researcher Juniper Research Ltd, Wang said global revenue from mobile music streaming services is expected to rise by more than 40 percent to US$1.7 billion this year.
That would make this year the first in which sales from digital music streaming services surpass those generated by full-track mobile downloads, Wang added.
“Streaming digital music is gaining force as a new trend and we are optimistic about it strengthening further,” Wang said.
Meanwhile, KKBOX chief operating officer Izero Lee (李明哲) said the company is evaluating plans to enter the digital movie streaming business, adding that KKBOX might follow US-based Netflix Inc’s model to provide the same streaming movie services.
The company is also considering an initial public offering, but has not decided yet where and when to hold it, he said.