Sony Music succumbs to piracy, closes Philippine office

MANILA, Philippines — (UPDATE 1:57 p.m.) Record label Sony Music Philippines is raising the white flag as it begins to close down its Philippine office reportedly due to lost sales to music piracy, sources said Thursday.

In a post on the online media site Yahoo! OMG, musician Ely Buendia revealed the bad news that Sony Music would be shutting its doors and severing its ties with its artists, old and new alike.

“One rainy afternoon, Sony gathered all their artists in the boardroom of their offices on Emerald Avenue (Day [Cabuhat], Pupil’s manager, went alone) and severed all ties with talents new and old in one fell swoop,” Buendia said in the post.

Buendia ventured that the decision came after years of “trying to survive a toxic landscape of piracy and changing tastes,” alluding to the rise of digital music piracy and the renewed preference of music listeners for foreign artists.

“But not even two multimedia giants were immune to the realities of a dwindling marketplace. While music was still very popular, CD sales were virtually nonexistent, thus the painful decision to call it quits,” added Buendia, who was also the frontman for the popular 90′s band Eraserheads.

A Sony Music executive who refused to be named said as much: the decision was reportedly made by the international division of the company after seeing sales continually take a nosedive year after year due to the rise of music piracy.

Music piracy in the digital world has been the subject of much contempt from the local recording industry, which have recently come together to lobby in Congress the passage of a law that would seek to penalize illegal downloads of songs and other content through the Internet.

Universal Records Executive Vice President Ramon Chuaying claimed in an earlier interview that record companies have been losing as much as P3 billion a year in unrealized revenues due to the proliferation of mp3s that can be easily downloaded through the Internet.

“[Internet piracy] has done a lot of damage to the industry, particularly in declining physical sales of albums,” Chuaying said.

The Sony Music executive told that all Sony Music products will be distributed through a licensing deal with Ivory Music, a long-time local record company headed by industry veteran Steven L. Tan , following the closure.

It remains to be seen, however, what would become of the undetermined number of Sony Music Philippines employees, but the executive said all its signed artists would have to find another music label to carry them, or be forced to go independent.

As for Pupil, its manager Day Cabuhat said they would continue to focus on current shows and projects, including the band’s next single due out for release soon.

“Other record labels have contacted us, but we are still in the process of assessing our options,” Cabuhat said.

But unlike Pupil which has been a steady presence in the local music scene, Sony Music’s other artists — which include the reggae band Brownman Revival, rapper Gloc 9 and emerging act Letter Day Story — would now have to find another record company they could sign with.

Digital is the way to go

But while the Internet has issued the defining deathblow to a number of industries, it could also provide opportunities for other sectors such as music industries to evolve and ride the wave of shifting preferences in music consumption.

According to Jim Ayson, founder of online music community and an early Internet advocate, record companies would follow the way of Sony Music Philippines if they continue to resist the call of the digital medium.

“Selling content in the form of CDs and DVDs is already coming to an end, and record companies would inevitably be shutting down if they continue on this mode because customer preferences no longer veer toward CD players. They would rather use their MP3 players or their smartphones to listen to music,” Ayson said.

Ayson pointed out that local record labels have been pretty slow in adapting to these new ways of doing things, although they could’ve easily jumped on the bandwagon “by putting up their own website [for music downloads] or put up a site in cooperation with other record companies.”

Such an initiative has been launched recently through MyMusicStore — dubbed as the “Pinoy iTunes” — where all major record labels in the Philippines have teamed up to offer song downloads for as low as P20.

But the project was launched only years after digital music piracy have bled most of these record companies dry.

Another potential avenue that local record labels should explore, Ayson said, is the rising popularity of music streaming, which have recently picked up in Western countries through services such as Spotify, Rhapsody and Pandora.

Unlike in digital downloads, listeners wouldn’t have to pay for every song played on their devices, but would instead have to shell out a fixed monthly subscription rate for unlimited access to the service’s vast music library. The caveat, of course, is that users wouldn’t have a copy of the song stored on their music-playing devices.

“Streaming has enormous potential [for the local music industry], because they offer people a convenient way of consuming media that will lead them away from piracy,” Ayson stressed.

A monthly subscription to Spotify’s services, for example, would cost only $9.99 (roughly P450) for an unlimited access to the service’s thousands of songs available for streaming at any time.

While services such as Spotify are not yet available in the country, Ayson said he was able to gain access by circumventing the territorial restrictions of the application, and discovered that it holds a vast library of OPM songs available for streaming.

“I even discovered artists I never heard before. Searching for folksingers “Freddie Aguilar” and “Florante” also turned up “Florante Aguilar” – who is apparently a talented classical guitarist with instrumental recordings of kundimans and haranas,” Ayson shared in an earlier blog post on his site.

But would it be a hit among Filipino music listeners, who have become accustomed to downloading and owning the songs of the bands they follow, ready to be played when the life calls for some background music? “I think people would just need to get used to it,” Ayson said.

“With all that music available, I [found that I] may never [have to] buy a CD again.”