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Brief presentation for regiON

conference, Budapest, Oct. 2009

By Nimrod Dweck and Ophir Kindler,


Dice Marketing, Israel
http://dicemarketing.co.il
 When talking about the Israeli music
industry, we usually refer to three
different aspects of it:

 Israeli contemporary mainstream.


 Indie Mediterranean Pop industry.
 Contemporary indie industry.
 7.5 million people.
 5,500,000 Jews.
• Of which, over 916,000 are post soviet
Russian immigrants.
• 30% of the population are immigrants.
 1,400,000 Arabs.
 NGP 28,400$, per capita.

Terms which affect the market:

No geographic contact with Europe.


Nearby countries hold no cultural relations with
Israel.
Teens are called for mandatory 2-3 years army
service.
Social moratorium is granted until age of 25-27.
 Overall market net worth is 45 million USD (2007).
Approx. 2.5 million CDS are being sold in Israel.

 There are no exact details – no one really keeping


track. Privately owned companied do not share
information.
 Piracyeats the lot in Israel.
The real market worth is
probably 3-4 times more
then stated here.

 Israelis among the top 20


countries in the world in
all aspects regarding
music piracy.
 Foryears Israel was a
closed music market,
governed by three-five
majors, with no legitimate
Indie industry.

 Patriotic
agenda, led to a
closed market, focused on
inward selling only.
 Few were the cases of Israeli
artists who tried to make it
big outside of the country.

A gap in professional
standards between Israel
and the major music
markets in means of
production, management But something
and etc. has changed
in the 1990s…
Why?
 Retail sales soared down, due to over
priced CDs, piracy and penetration
of internet and cellular phones to the
personal house-hold.

 The penetration of the cellular


industry is amazing. 8.9 million
subscribers! (there are only 7 million
people in Israel).

 Internet is a common commodity in


the Israeli household. The market in
whole is considered an early adaptor.
77% of the market is using the net,
90% of all teens.
 The change in music consumption by consumers
lead to the erosion of retail market.

 The fact that all majors have based their income


model on retail CDs led to the collapse of 3 out of 5
majors.

 In turn, cellular providers, digital aggregators and


etc, have become dominant players in the music
biz.
 Independence. Most major artists broke off their
contracts and opened their own in-house labels.

 New models arise.


• 360 deals have become common in major labels. Yet
they do not know how to operate them successfully.
• Digital sales on the rise. Retail sales on the verge of
disaster.
• New income model: More concerts, higher ticket
prices.
• International career has become a valid option.
 New players – cellular providers, digital
aggregators, indie labels, booking agents and etc.

 So the big question is how to do it successfully?


• Musicians who have a financial backing from
successful career, and want to evolve to new
markets.

• Contemporary indie musicians and labels.


Mostly of the Metal, Trance, Punk Rock, indie
rock and world music scenes and etc.

• Licensing and publishing companies.


 Barriers
for the Israeli
musician:
• Career begins late in comparison to
other markets.
• Language barrier.
• World music ghetto.
• Local market do not provide
financial support.
• Lack of professionalism in aspects
regarding international career
building.
 Whatwould foreign musicians can
expect from Israel?
• Willingness from local musicians to collaborate
and help.
• Curious audience who wants to hear of new cool
stuff.
• Pop oriented market.
• Low retail sales.
• Limited publishing market.
• Very different market – a local decent PR and
marketing is a must.

• Few decent venues, festivals are usually limited


to local market yet always seek cool new stuff.
But keep in mind flight costs can be high. So
think it through and through financially.
 The Israeli music biz is looking for
partners outside its borders.
 The shift imposed on Israel is a good
example of how not to deal with a
change.
 Sharing knowledge is the key.
 Let’s work together.