Taipei Times (TT): How has KKBOX been doing after entering Japan’s market this summer?
Izero Lee (李明哲): With our expanded consumer base, we have seen our business continue to grow at a steady pace. Currently, KKBOX has about 10 million registered users and the majority of them are Taiwanese.
Last month, we made our debut in Thailand as the telecom network there has become more extensive than before. So far, we still have no plans for markets in South Korea and China, because competition in the former is fierce and it remains risky for us to break into the latter where too many Internet users are downloading unlicensed songs from all sorts of Web sites.
TT: Is Japan likely to replace Taiwan as KKBOX’s biggest sales source?
Lee: Japan, compared with other Asian countries, has high per-capita GDP and a market where demand for music is robust.
According to the International Federation of the Phonographic Industry’s (IFPI), Japan could replace the US as the world’s largest music market this year. It is amazing to us that Japan, a country that has only one third of the population of the US, has so many music listeners.
We expect Japan to replace Taiwan as KKBOX’s biggest sales source next year at the earliest.
TT: Last month, the digital music provider Spotify entered Taiwan’s market. How did you respond to this move?
Lee: We had been prepared to compete against any new rival for a long time. We think that, compared with Spotify or iTunes, KKBOX knows more about Asian music listeners and pays more attention to providing customized services in different markets.
KKBOX also competes with Spotify in Hong Kong, Singapore and Malaysia. While many people may think Spotify will knock KKBOX down in the intensifying music-streaming market, we hold firm confidence in our top-tier technologies and talent, our knowledge of Asian culture and Asian business models.
Step by step, KKBOX will explore new markets such as Australia and expand its customer base to catch up with Spotify.
TT: Will KKBOX go west to take on Spotify?
Lee: So far, KKBOX does not have plans to explore Western countries, at least not in the near term. In the long term, of course we will not miss any opportunity that can grow our business.
TT: Why does KKBOX publish a print music magazine every month?
Lee: In 2010, after KKBOX’s core business was on track and growing steadily, the company wondered whether to issue a monthly publication that introduces the Mandarin music industry as well as Taiwanese singers and their work.
Together with Cite Media Holding Group (城邦集團), we published the first issue of KKBOX Magazine in January of 2011.
True, the company is unlikely to make a profit from the publishing business, but we still want the magazine because KKBOX understands the value behind it.
Given Taiwan is currently the world’s largest Mandarin music market, there must be a music publication out there telling people what Mandarin music is about. That is the value we care about and why the magazine is still on the shelf.
TT: Will KKBOX continue offering services to users of BlackBerry and Nokia devices?
Lee: Yes. We will continue offering service on Windows and BlackBerry platforms to ensure different groups of mobile device users can enjoy listening to music with KKBOX.
Given Nokia and BlackBarry’s business still outperforms others in the Indonesian and Dutch markets, we think there is chance for the two companies to make a turnaround.