There is a massive gap between traditional music industry economics and the rapidly evolving behavior of Asian media consumers. I spent a few days last week at the Music Matters conference in Hong Kong listening to some of the most senior record label executives dissect the complexities of their situation. Contradictions abound. Online piracy in China is rampant, and yet China Mobile made nearly US$1.7 billion last year selling caller ring back tones. Most of Baidu's traffic comes from its illicit MP3 search service, while authorised mobile download services in Japan are growing rapidly.

As always, there was a big white elephant. In this case - what happens when the consumer pressure for music to go free becomes irresistible - whether bundled with devices, streamed through licensing deals, or just downright freely available. When I interviewed Terry McBride, CEO of Nettwerk Music and Avril's Lavigne, he was more than ready to face that eventuality. His view was merchandise, events, and packaged fan access products would make up for the loss of CD sales. Paul McGuiness, in a controversial keynote, was less sanguine. He likened ISPs to shoplifters and accused them of rigging the market. Later in the conference, Bob Lefsetz ook cruel and unusual pleasure in ripping him apart.

The Asian music market is a subtle and fascinating study in the new dynamics of digital entertainment. For more details, stay tuned for the next episode of 'The Tomorrow Report' which will contain snippets of the conference, video interviews with some of the big industry personalities and an overview of the relevant market numbers. You can sign up for regular episodes either by email, iTunes or RSS.