. Soundbuzz, with a presence across 10 Asian countries, has about 50 record labels in its stable, and distributes to household names such as lycosasia.com and msn.com.
Following in its tracks, Taiwan's highspeed Internet access firm GigaMedia became EMI's second Asian partner on Monday by selling part of its music website to EMI -- to offer music downloads jointly.
"This is an industry creation moment. I don't see this as competitive in any way," Sudhanshu Sarronwala, chief executive officer of Soundbuzz said of the GigaMedia-EMI deal.
"We're actually pushing the labels to appoint multiple partners... to push digital downloading of secure music into the mainstream of consumer behaviour," said Sudhanshu, who co-founded the company in November 1999 and kicked off commercial downloads in March.
According to IDC, digital download sales in the Asia Pacific region, excluding Japan, stood at $0.51 million in 1999 and are expected to hit $307.47 million by 2004 -- a compound annual growth rate of 260 percent.
In comparison, online CD sales will grow by 92 percent over the same period.
But while the longer term outlook for music downloads is rosy, music piracy in the region still poses a very real threat.
"The level of domestic music piracy has a direct correlation with the growth of digital music," Soo said.
Music piracy in China is well over 50 percent of domestic sales of cassettes, records and CD's and mini discs, according to IDC. Hong Kong, India, Malaysia and Thailand are grappling with piracy levels of between 25 and 50 percent.
Indonesia, the Philippines, Singapore, South Korea and Taiwan have piracy levels between 10 to 25 percent.
Australia and Japan, are the only two countries in the region which are on par with the United States, with less than 10 percent domestic piracy levels.
Cheap pirated music CD's costing an average of $3 an album, are seen as a much better deal than downloading a single which costs between $0.50 to $2.50, Soo says.
Technical challenges, such as insufficient Internet bandwidth and large digital music files, make downloads slow and discourage potential customers, she adds.
But Asia's digital download market is beginning to stir and American online song swap company Napster has played a part in rousing it.
"Napster brought downloading music front and centre into everybodys consciousness," Sudhanshu said. "Digital download was suddenly not such an alien, far away thing."
Napster's notoriety in 2000, helped propel IDC's digital download sales estimates to $10.89 million for 2001 from just $1.63 million last year.
Court-ordered filters, which now block the majority of copyrighted music file transfers across Napster's site, bring home the need for legal music download channels.
"There are very few legitimate outlets for digital content from the big labels," Sudhanshu said. "Until and unless that happens the digital music industry will just never gain momentum."
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