A long and winding road for local music industry
By Helly Minarti
JAKARTA (JP): Piles of cassettes and compact discs (CDs) are taken off the shelves of a music store in Central Jakarta. And, for the second time in as many months, an employee is busy replacing the price tags.
The woman who owns and manages the store holds up a fax she has just received from a recording company.
"See, it's up again...," she said. "CD prices have jumped three times since December, from Rp 32,500 to Rp 40,000, then Rp 55,000 and now Rp 70,000."
Cassettes of Indonesian artists now retail for between Rp 10,000 and Rp 15,000 while those of international artists sell for Rp 13,000 to Rp 17,000.
The music store owner, who did not want to be identified, said sales had dropped 20 percent to 30 percent since the crisis began.
But the shop's revenue is faring better than her other outlet south of Jakarta.
"The location is very important. This one (in Central Jakarta) is close to where the tourists hang out. They help boost the sales -- especially CDs," she said.
The shop offers a wide variety of music and artists -- major labels account for 70 percent of the stock.
Before the crisis, if a cassette or CD was not in stock she could chase down best sellers -- such as the Titanic soundtrack and Spice Girls or Aqua albums -- in Singapore. This is a luxury she can no longer afford.
But despite declining sales, she still manages a profit of between 15 percent and 25 percent.
The news is even gloomier for producers who must meet the skyrocketing costs.
"It's slowing down," Yoki Agustian, the promotion manager for Warner Music Indonesia (WMI), said.
A source said the 40 percent decline in sales was a sign of things to come as the price of tapes, plastic packaging and tape covers, as well as printing cost, were all much higher.
"We still released the albums of some artists in January but we have to be very picky," Yoki said.
Only those with big names and lots of fans will get a chance to release their latest songs.
In January, WMI released Kris Dayanti's solo album which had been "quite successful" with 25,000 copies sold in the first four weeks, he said, thanks to Kris' leading role in a teleserial. WMI will soon release the latest album of Desi Fitri, also a TV star.
On the international scene, WMI has a commitment with its worldwide network to release albums here according to its international schedule. Madonna's new album, for example, is expected to hit the stands in March.
Becoming selective in choosing artists and cutting back on the promotion budget is part of Sony Music Indonesia (SMI)'s survival kit during the crisis.
But it has more scope to schedule the release of its international artists and select them.
"We have our worldwide priority artists according to our Asia Release Schedule. There are names like Celine Dion, Michael Bolton or new releases of groups like Pearl Jam and the new mini album of Britain's Oasis," Kunto Handoyo, local label manager of SMI, said.
SMI is still sticking to basic marketing rules, he said: "Such as releasing the second video clip for our Indonesian artists when they reach a certain sales level, like Rif Band recently."
The company's best selling local artist last year was Anggun C. Sasmi, whose album sold 150,000 copies. In comparison, the album of an R&B queen like Mariah Carey can reach 60,000 copies.
SMI released its two local bands in December -- Arwana and Bima -- but the sales have hit hard times.
Arnel Affandi, general manager of the Association of Indonesian Recording Industry (ASIRI), said the industry had suffered an overall decline in sales of 52 percent. (This includes Indonesian and international artist.)
"And it's still on a downhill slide. We predict it will reach something like 60 percent.
"But if we look at it closer, the sales of CDs featuring international artists are enjoy an upward swing. Maybe it is because a lot of foreigners are buying them up because the price of CDs in Indonesia is still much cheaper compared to those in the United States ($35 to $45)."
He identified two key problems in the Indonesian industry.
First, the increasing price of raw materials and second, the cash flow.
Producers provide cash for the production -- from the buying of empty tapes to the payment of the artists -- and the promotion. But only 10 percent of retailers pay for their purchase in cash.
When asked about the impact on artists, he said it would hit newcomers the hardest but it did not mean the door was closed for them.
"Who knows if Iwan Fals composes a song which reflects the people's frustration, and it turns out to be another great hit?"
Pop music still dominates the market with a 45 percent stake, with dangdut still drawing 35 percent. But trends can certainly influence sales.
"The current situation is very bad for us. But we just have to wait it out," he said.