“Social networks have really democratized music, in terms of release, promotion and marketing so that anyone anywhere in the world can consume it,” said Esther Nguyen, CEO of Vietnam-headquartered entertainment firm POPS Worldwide, during the Fortune Southeast Asia 500 Summit in Vietnam on Nov. 3.

While listeners today embrace music from different genres and countries, Nguyen says there’s still a way to go before Southeast Asia’s music industry can scale globally. 

“It’s a concerted effort, and South Korea has done it really well,” Nguyen explained. “[You’ll need] government regulations and policies supporting IPs, legal infrastructure and frameworks, international export support, and investments and financial incentives.”

“There needs to be a more robust investment community that are experts in entertainment and music,” she added. “L.A., New York and Tokyo, for example, [have] investors who are really well-versed in entertainment… an understanding of the industry really helps it to grow as well.”

The fragmented nature of Southeast Asian markets can also make scaling its music industry tough. “While I have personally invested in certain entertainment assets, including large theme parks and music streaming platforms, I think the biggest challenge is the fragmentation in Southeast Asia,” said Sujey Subramanian, the APAC head of asset manager ICG. “Our typical minimum equity check is $50 million, and it’s just hard to find assets of scale in the region.”

Music, and more

The panelists also discussed South Korea’s rise to become an entertainment powerhouse, debating which parts of the country’s playbook could be applicable to Southeast Asia.  

“The first thing that was exported from Korea was K-culture. We’re talking about K-dramas and food, and then K-pop came up on the back of that,” said Kenny Ong, the managing director of Sony Music for Malaysia, Singapore and Vietnam. “For Vietnam and any other Southeast Asian countries, we can’t just push content, but [also] have to create demand for the culture.”

Parallel offerings, such as merchandise and live experiences like meet-and-greets and concerts, are also bumping up profit margins for artists. “Physical music [products] are also growing [in popularity],” Ong added. “We’re talking about CDs, physical vinyls and box sets… In the past couple of years, they’re growing [in the] double digits.”

Southeast Asia can also further capitalize on the rising popularity of concert-going by upgrading its physical infrastructure. “We need venues which can host different sizes of tours… It’s not just venues which host 50,000 , we need mid-sized venues that hold 4,000 to 5,000, and smaller venues holding around 2,000, in order for artists in each country to grow and perform.”

Ultimately, the panelists were optimistic about the direction in which Southeast Asia’s music industry is headed. “We’ve seen a lot, especially in the past year, of the [Vietnamese] government really trying to clean up pirated sites and go after bad actors. We saw an eight-year IP case finally get fast-forwarded and be heard, and we got a positive result,” Nguyen concluded. “That being said, the enforcement and interpretation of IP laws still needs some work, but at least it’s going in the right direction.”