We just had a very interesting meeting with Michael Song, managing director of Taihe Rye Music. He is Chinese, but spent six years at Texas A&M and returned to China in 1996 to work in the budding music scene in China. He is in the agency business and represents the #1 male musician in China.

He explained that the legal music CD business in China is about 5%. In other words, 95% of the CDs on the market are pirate copies. He said that it was the teenagers who were passionate about the artists and liked to hang out in the record shops that tended to buy the legal CDs. Even in the top artists, CD sales only represented 30% or so of their income, while less known musicians actually lost money on CDs. The CDs are important, however, as a marketing and promotion vehicle.

Because the mass media is state owned, it is difficult to use the mass media for promoting artists. For this reason, it appears that the successful artists in China tend to be more talented, singer songwriters who tend to be popular longer compared to artists in markets such as Hong Kong and Taiwan where pop idol style artists are highly promoted and often lack talent or long term potential.

He told us that his artists got revenue share deals with percentages a bit worse than their counterparts in the US, but much better than in Japan. Most of the revenue comes from advertising/endorsements and concerts, but he is aggressively working on new business models involving alternative media such as the Internet and mobile devices.

My "take-away" was that in a market where the record industry basically doesn't function, artists and agents are going to be pushing the cutting edge of music business models and might in fact discover the post DRM/RIAA business model before Hollywood does. Obviously, it helps to have a huge growing market such as China, but I think it would make sense for artists and music industry people to keep an eye on China for breakthroughs in the music business.

13 Comments

Jinx.

I just blogged on this very same issue.

\m/ rock on.

Kevin

Interesting insight about the broken business model of the music industry and how China might find a solution. But didn’t the Grateful Dead discover a model years ago? They gave away their music and created a cult following of concert goers and t-shirt buyers. The latter two represented the bulk of the profits.

China might have a state run media system but try to break into the US media machine for example. Without the backing and influence of a big label (many of which have network affiliations) is not so easy either. I know several indy bands that have been digitising their entire library of music (some goes back to the 80's) so they can offer them as downloads on their web sites. These groups would love for people to start swap'n their stuff!

This is similar to Bollywood's P2P gamble, as reported at the end of 2003 by the Guardian and Boing-Boing. The ones who have less to loose are free to experiment.

Of course just as India probably doesn't have a big local market for paid P2P content, China will for some time be better off exporting the results of their experiments. It will be the interaction between the domestic-born models, and their effect internationally that will determine if a new global digital content marketing and distribution system can be sustainably grown.

I suppose that it's not just China or India in flux, as here in Spain some estimate that the pirate CD/DVD market share is 40%. My guess is that computer software is far worse. So as you say their is alot of room for new models to emerge and be test driven outside these developing markets.

Great info! Have a music business blog that goes over many of the same issues and how people are working around them.

I think the important thing is that we CAN work around them. There is too much gloom and doom with the songwriting and publishing community. And it's not like we have a choice on this stuff...

Would rather spend the money we're putting out for legislation that doesn't do any good to work on making a business plan so that money can be made.

Anybody know the China (not HKG) popularity of
Cher, Avril Lavigne & Janet Jackson?

Hey -

I'm writing my PhD on this very subject!! Actually, I'm also looking at the role of copyright in China's film industry...

Anyone want to be interviewed?? Seriously.

I'm heading back to Beijing in May to (hopefully) interview people in the music industry about where they see themselves going in relation to copyright. I'm also in the midst of attempting to write a paper on the CC licencing movement's potential/likely benefits for China's creative industries (to be presented at a conference on Creativity, Innovation and China in Beijing in July): http://www.createdinchina.org/

If anyone has any good articles or information on China's music industry I would love it if they could let me know. I can be e-mailed at: a.montgomery@qut.edu.au I'm particularly interested in speaking to anyone connected with the business side of China's music industry.

Hello to all.
I'm a interesting Music artist who look forward in productions in China. If anyone can tell me where/who to talk too in China in regards to original Music, please contact me via email.

I plan to travel to China in the near future and I have some very good original Music that I would love to share with the Chinese.

Good Life

Doug,

I'm interested in your research on copyright and the Chinese film industry. If you see this post and would like to, please feel free to e-mail me at dmose1@aol.com.

David

Hey -

I'm writing my PhD on this very subject!! Actually, I'm also looking at the role of copyright in China's film industry...

Anyone want to be interviewed?? Seriously.

I'm heading back to Beijing in May to (hopefully) interview people in the music industry about where they see themselves going in relation to copyright. I'm also in the midst of attempting to write a paper on the CC licencing movement's potential/likely benefits for China's creative industries (to be presented at a conference on Creativity, Innovation and China in Beijing in July): http://www.createdinchina.org/

If anyone has any good articles or information on China's music industry I would love it if they could let me know. I can be e-mailed at: a.montgomery@qut.edu.au I'm particularly interested in speaking to anyone connected with the business side of China's music industry.

8- Doug @ August 3, 2005 04:27 AM

My name is jj and i am in beijing now iam english,my family have a great love of china as my grandfather was one of the first western bussnessman to establish relation ship with China 54 years ago,my father also joined in the trend and has been working with china for around 35 years,so therefore i have grown up on chinese talks and chinese ways,my background is football i have played professionaly since i 17 years old,played in england ,portugal and thailand,but i lost my love for the game very quickly,China has seemed to been pulling me towards its self for a long time and finally i packed up football and have come to chine to follow wat i belive can be very sucsessful-the music business,iam here to try to start up a record label and studios and make music,GOOD music i have friends that are in the industry in america and england who are interested in my ideas i want to bring english produsers over here to get that rnb flavour over here and in turn learn from the chinese in there culture and way of getting the right words across in the songs,iam aware of cd forging and realise its not the way forward iam into advertising a product as well as the person as in a buy one get 2 or 3 sort of way.i hope to progress with help and connections as well from my piers and anyone that is interested,all emails welcome and i hope to have some replys from truley interested and forward thinking minds,thanks,my email is jjp-pezza@hotmail.co.uk

= jj

I think investing in China is so difficult because China have had a mixed experience in the Chinese market.

Hey,

I;m a university student studying the music industry in china. Could anyone help me with who the top selling artists in china are and what is the most popular genre of music either in shanghai or beijing.

Thank you so much

s in most other Asian markets, pop music has a real stranglehold over the mainstream—Mando-Pop, Canto-Pop, J-Pop, K-Pop—glossy, inoffensive music that satisfies the censors as well as the ‘bland criteria’ necessary for across-the-board media coverage. Despite the diverse musical heritage of China, mainstream pop is almost entirely informed by western music, from the basic pop song format through to instrumentation and lyrical content, although general production quality is still fairly poor. The Chinese audience, therefore, are already well familiar with all of the stock traits of western music: guitar solos, crap raps in the middle-eight of pop songs, warbly diva vocals, ke

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We just had a very interesting meeting with Michael Song, managing director of Taihe Rye Music. He is Chinese, but spent six years at Texas A&M and returned to China in 1996 to work in the budding music scene in... Read More

Great info and the Chinese music industry and how they deal with piracy. I think the important thing is that we CAN work around these things. There is too much gloom and doom with the songwriting and publishing community. And Read More

Joi Ito has a great post about the music business in China: My "take-away" was that in a market where the record industry basically doesn't function, artists and agents are going to be pushing the cutting edge of music business models and might in fact... Read More

As seen on Instapundit... Hong Kong, Taiwan and China There's a fundraiser next Tuesday in HK for Beslan victims. Will AIDS lead China to democracy? Tom looks more deeply into the winners and losers in HK's recent election. There's now a HK politician ... Read More

As seen on Instapundit... Hong Kong, Taiwan and China There's a fundraiser next Tuesday in HK for Beslan victims. Will AIDS lead China to democracy? Tom looks more deeply into the winners and losers in HK's recent election. There's now a HK politician ... Read More

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