Staff Reporter

It was a near free fall for a while, but Asian consumers are again snapping up U.S. record labels good news for an industry that has come to rely on the Pacific Rim markets.

Music sales declined sharply in Asia and Southeast Asia in 1998, often at even sharper rates than those seen during the first year of the region's financial woes.

In South Korea, album unit sales slipped by 33 percent from 1997, according to the International Federation of the Phonographic Industry. The fall was 32 percent in Hong Kong, 21 percent in Singapore and 17 percent in Taiwan.

The one exception was Japan, where unit sales fell 2 percent in 1998. But because of an increase in the yen against the dollar, overall music revenues were up by 4 percent.

No mid-year statistics are available, but L.A. music executives relay anecdotal evidence that sales have been picking up. Officials with DreamWorks Records, the music division of DreamWorks SKG, say there has been increased pressure over the last few months to get the label's artists to Asia on promotional tours.

Warner Bros. Records officials report that the latest Madonna album, "Ray of Light," has sold a respectable 1 million units in Asia. Virgin Records recently scored its all-time highest-selling album with the Japanese band Dreams Come True.

"All of us retailers, the affiliates and the labels believe that there is light at the end of the tunnel," said Steve Margo, senior vice president of the international division at Warner Bros. Records. "There is every reason to believe that the Asian (music) markets will return to a strong position."

That belief has caused record companies to keep investing in the region, despite a slipping return on their Asian investments. In fact, many labels have been opening regional offices in Asia, which both develop local talent and promote Western artists.

Virgin Records opened a regional office in China this spring, and Warner Bros. has maintained affiliate companies in all nine of the major Asian markets, and has upgraded the management personnel there.

No major record label can afford to write off Asia no matter how precarious its economies might be. Japan alone constitutes the second-largest market for music in the world behind the United States, representing 16.9 percent, or $6.52 billion in sales.

L.A. record companies consequently have encouraged their artists to woo Asian fans in person. And as more signs of economic recovery become apparent, the number of music acts touring Asian countries has begun to pick up.

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