But Wind Music International Corp. is bucking the trend. In just three years it has opened up eight music stores around Taiwan, with total revenue topping NT$100 million (US$3.1 million) for each of the past three years—making the firm a rare example of a successful record company in the digital music age.
After crossing the big lawn at Taipei City’s Huashan 1914 Creative Park and ascending a nearby wooden staircase, a visitor can hear twittering birds, bringing a note of coolness on an otherwise sweltering summer’s day. This is Wind Music flagship store, a 215-square-meter retail operation established in 2013. Standing right there in the middle of it is a big, green tree.
Wind Music President Ken Yang said, “I spent over NT$10 million redoing the interior of the store, and figured it would take six years to recoup that cost.” Yang’s company has been able to flourish in the face of adversity for two main reasons. One was stable profits in his bread-and-butter business, which gradually put him in a strong financial condition. And the other is his great love of music, a passion earning him six Grammy nominations in the U.S.
Away from the mainstream
“At Wind Music, we want to be involved with daily life and make music a friend of everyone.” At the flagship store, Yang has built an environment where music is experienced in a new way.
The outlet has individual seats, each of which is equipped with a tablet-type music player. At the end of the music listening area is a conical sound pyramid that visitors can reserve and use to experience a unique audio experience. Thanks to the music and the energy of the pyramid, a mere 10 minutes inside leaves one feeling much more relaxed.
The results of studies by state-run Industrial Technology Research Institute’s Center for Measurement Standards show that listening to Wind Music’s stress relief tracks can decrease brainwaves associated with tension and attention, thus helping calm the listener.
According to statistics from the Ministry of Culture, sales of physical media music in 1997 came to roughly NT$12.3 billion, but by 2013 this was down by more than 90 percent. Through it all, however, annual revenue at Wind Music just kept going up, eventually topping NT$100 million.
While estimates show it would take six years for the Huashan flagship store to break even, Yang’s outlet at Songshan Cultural and Creative Park covered its interior decorating expenditures within a year of opening in 2013.
Wind Music is the successor to China Music Publishing Co., where Yang, was originally an employee before emerging in 1988 as the president in a deal that left him over NT$5 million in debt. He covered this sum by borrowing from his parents and neighbors, so for all intents and purposes, he had pretty much bet the farm on the business.
In 1990, Wind Music released an album of Chinese Buddhist music at a time when religious organizations like Buddhist Compassion Relief Tzu Chi Foundation, International Buddhist Progress Society and Dharma Drum Mountain were attracting growing numbers of followers. With Buddhist music selling briskly, the company gradually got back on strong financial footing.
Having left behind the fiercely competitive pop music market, Wind Music carved out a niche as producer of music focusing on religion, contemporary spirituality and other non-mainstream genres.
In the field of children’s music, for example, producer Kim Hsieh, who had been working with Wind Music for eight years, felt that the genre was no longer in step with the times, so she proposed another idea to the company. “It was a gamble,” Hsieh said.
Education with a Taiwan focus was in the ascendancy in 2007, so Wind Music’s first album—a collection of Hoklo nursery rhymes—met with considerable enthusiasm. Its second album “Happy Children, Happy Singing,” an assortment of Mandarin nursery rhymes, also proved popular. The four albums of children’s music released by Wind Music over the past eight years sold 100,000 copies.
In addition, the firm held eight children’s music concerts in 2015. Attendance at each was limited to 350, and each of the concerts sold out within a month. A good decision made eight years ago continues to pay dividends today.
Judy Wu, director of music production at Wind Music, worked together with nature experts visiting the wilderness for five years to produce “The Forest Show.” Since its release in 1998, the program has sold over 200,000 copies.
Competing on value, not price
From 2009 to 2013, digital music ate into Wind Music’s revenues, but Yang refused to go along with a music industry price-cutting marketing campaign, whereupon chain stores Rose Records and Tachung Records both boycotted his company for two months. “In the end it was consumers that saved us,” Yang said.
Wind Music’s customers, generally between the ages of 20 and 50, inundated the record companies with phone calls complaining about the unavailability of discs. This pressured the firms into putting Wind Music products back on their shelves.
Since the marketing campaign finished up, consumers have shown little interest in albums that were being pushed at reduced prices. Wind Music compilations, however, have risen in price from NT$350 to NT$380, and are selling for NT$440 in 2015. Apple iTunes has even launched a special section just for Wind Music.
Besides resisting pressure to compete on price, Yang also took note of the digital music trend and decided to try something fresh. First, he entered into a tie-up with YouTube whereby the two firms split advertising and licensing revenues. If someone uploads a video without including a statement that the copyright belonged to Wind Music, YouTube will detect the problem, helping Wind Music manage its copyrights. By sharing advertising dollars with YouTube, Wind Music has been able to expand its revenue base.
“Wind Music is willing to try new approaches,” Hsieh said, citing the example of the company’s recently launched Digital Music Card. When someone’s birthday comes along, a friend can give a Digital Music Card with a special QR code on it. The birthday boy or girl can then scan the code and go online to a special website and download three songs.
The company also started working with restaurants to allow the latter to give the Digital Music Cards to customers as gifts. A patron who downloads the music will see a commercial message or discount information from the establishment along the bottom of the screen. After a customer has left the restaurant, the Digital Music Card continues to create a connection that may lead to another visit.
According to Yang, physical media music accounted for about 70 percent of revenues in 2014, digital music accounted for 20 percent and license fees the other 10 percent. He expected the digital share to rise to 30 or 40 percent for 2015. In the month of May alone, Wind Music products generated over 10 million hits on YouTube, a level of activity that promises to spur sales.
On a very different front, Wind Music has used its resources and imagination to challenge the longstanding idea that when a person from Taiwan traveling abroad calls on someone and wants to give a gift representing the country, usually the only choice is pineapple cakes. To add another option to the menu, Wind Music has taken culturally significant Taiwan music, bundled it with organic tea leaves from the Pinglin tea district in New Taipei City, and presented it in packaging that features the work of Taiwan painters. This has turned out to be an excellent way for travelers to give cultural Taiwan gifts when they go abroad.
In addition, at Ten Drum Culture Village in Tainan City, Wind Music has used the overhead trolley system in a former workshop to build a miniature aerial tram that people can board for a two-minute tour of a site now redesigned as an oversized music box. After getting off the tram, a visitor can buy a hand-cranked music box with three musical scores and a hole punch that can be used to create musical cards. Other than enjoying the music itself, the buyer gets the enjoyment of fashioning the musical cards. The music box has sold 5,000 units so far, “which equates to selling 30,000 albums,” Yang said.
Wind Music has further used metal pipes to build an interactive “music tree” that can sing. Each leaf on the tree is programmed to play the sound of a different type of organism when it is tapped by a visitor. When the leaves are depressed in a prescribed sequence, they can actually play a tune and at the top of each hour, a different sound announces the time. Wu spent a year recording and editing the sounds for this innovative new product, which enables everyday people to experience music in unimagined new ways.
Marketing Taiwan culture
“There was a time when listening to music brought people into contact with musicians, but in the 20th century it became a matter of people coming in contact with machines,” Wu said. “With music concerts on the rise at present, we are once again finding ourselves back at live venues. And we are working hard to establish a better type of musical presentation.”
As for future goals, Yang has no intention to take his company public. This is because Wind Music will continue to make a lot of music albums that are “important but sell poorly,” such as aboriginal music, Hoklo songs, traditional nanguan and beiguan music, and the like. Yang plans to expand on his business model and go international.
“Yang is very willing to treat each employee as an individual, and assign to each one the sorts of tasks that suit him or her. He helps us be the best we can be, and vice versa,” Wu said, who has worked with Yang for 20 years. Operating in such an environment makes it possible for everyone to utilize their abilities to the fullest, and they naturally generate maximum value.
There were a few key objectives in Yang’s mind when he founded Wind Music: Enhance the value of music, make music everyone’s friend and position the company as constant companion through every stage of a consumer’s life. These motivations resonate strongly with a diary entry he wrote as a third-year university student: “I’m absolutely going to be working in music for my whole life.” And that is just what he has been doing, without any regrets.
[by Winnie Lin / tr. by David Mayer]