Company Town : At Long Last, MCA Is Ready to Take On the Market in Asia : Music: The company is involved in a rapid and ambitious expansion plan to open seven more offices.

MCA Music Entertainment Group--the last of the major music companies to go global--is hoping to fast-forward with a rapid expansion in Asia, Chairman Al Teller said this week.

“We’re the last of the six majors to build a truly international infrastructure,” Teller said at the opening of the firm’s Asia/Pacific regional headquarters in Hong Kong. He and a posse of MCA executives have been touring Asia, preparing for the opening of seven more offices, including one in Australia this week; Taiwan and South Korea in July; Malaysia, Singapore and New Zealand in October, and in Thailand by the end of the year.

China, by far the largest potential market, is the last on the list. Teller says MCA will wait and see how hard-won government promises of copyright protection and market access pan out.

“I think we’ll probably be a bit slower than our competition in establishing ourselves on the mainland,” Teller said in an interview Monday. “I’m not unhappy about that. I think I’ll let them pave the way and see what kind of experience they’re having. At the appropriate moment I’m sure we’ll have an operation in the mainland in one fashion or another.”

For the moment, the focus is on bringing the new offices up to speed, in line with an ambitious international expansion program. MCA Music, best-known for top artists such as Nirvana, Bobby Brown and Guns N’ Roses, added 12 overseas branches last year, mostly in Europe. The Asian expansion will bring the total to 24 international subsidiaries and, Teller hopes, a corresponding increase in sales.

The music industry, on average, makes about 70% of sales overseas; MCA’s figures are the reverse, selling only about 30% of its music products outside of North America. Global gross revenue in 1994 was more than $2 billion.

Hong Kong is the home of Asia’s best-selling Canto-pop music, where singers are cultivated as much for their looks as talent, and attract huge followings across the region. Unlike movies, audiences favor home-grown acts to foreign imports, and other international music companies have found that the key to success in Asia is signing local artists. MCA hopes to compete, not by luring away established groups, Teller says, but by spotting their own grass-roots talent.

“International sales are driven heavily by local repertoire,” Teller said. “Given that we’re at the very earliest stages of building local artist rosters, it’s going to take us some time before our sales mix begins to reflect worldwide sales mixes.”

To Teller, MCA’s debut on the Asian corporate charts should be marked with a bullet, the designation in Billboard charts for a rising hit. He expects an uptick in sales immediately--30% in the first year or so if results mirror the company’s experience last year in Europe--then doubling within a few years.

Local analysts are watching carefully. “Teller knows his stuff,” says Nikhil Srinivasan, a vice president at Baring Securities in Hong Kong. “That doesn’t mean he knows Asia, but he has a good record in the music business.”

Teller has been encouraged by the success of rap music in Japan, where MCA first sunk its roots in Asia five years ago, and the unexpected popularity of country star Vince Gill in Indonesia, whose latest release sold 80,000 copies there.

“Historically, rock music travels best internationally,” not country, Teller said, adding that MCA’s country music operation is the strongest in the United States. “If we can translate that success overseas, it will be a real opportunity for us.”

If satellite music channels such as Viacom Inc.’s MTV Asia and STAR TV’s Channel V, owned by Rupert Murdoch, can inspire youth from India to Taiwan to wear their baseball caps backward, then getting more Indonesians to don 10-gallon hats may not be so far off.

All of MCA’s competitors, well aware of satellite programming’s potential impact on billions of viewers across Asia, hold equity stakes in a music channel: Sony’s Sony Pictures Entertainment, Time Warner’s Warner Music Group, Bertelsmann’s BMG Entertainment, and Thorn EMI’s EMI Music all own a piece of Channel V. PolyGram recently bought half of MTV’s Asian network. MCA, though, has no plans to get a piece of the pie in the sky.

“I don’t expect us to be competitively disadvantaged by that,” Teller said. “These channels are going to have to program what their audiences want to see and hear.”

Teller and company have more down-to-earth plans of growing their own stars.

“From a long-term perspective, your ability to find talent and nurture them from their very early days is what determines whether or not you’re a great record company,” he said. “If you can’t do that, you’re going to fail.”