Outdustry | 格外音乐

Due to piracy and negligible airplay royalties, the western record label model simply does not work in China. In most cases, domestic companies take over an artist’s entire life – Records, management, publishing etc. There is so little money to be made from simply exploiting a master that a label has to ensure it doesn’t miss any area of income in order to survive. This obviously poses a problem to western rights owners/managers looking to make money out of their narrower areas of interest.

The majors are all here doing their stuff, struggling away, but like all foreign companies they have had to enter into joint ventures to operate in China, slashing their already slender profits. They own the lion’s share of domestic pop music but with regards to international repertoire, they stick very much to frontline releases and global priorities with the occasional catalogue title. Universal Music China, for example, are doing a reggae push throughout the year to see what sort of audience there is for the genre. Danny Sim, International Marketing Manager at Universal Music China, is optimistic about growth in western music sales. They will release 40% more international titles this year – bringing it to roughly 100 albums – and expect to see a 10-15% growth in revenue. Sim puts his optimism down to ‘a) More people getting a better education, and therefore more people with English as a second language, b) More western music spread through the internet, and c) More media channels will become western music friendly’.Truth be told, the returns (and therefore the marketing budgets) are really not there for majors to ‘break’ niche foreign artists. They have to rely mainly on larger artists’ spill-over publicity from the west, so for the emerging independent, there is very little fun to be had with regards to major licenses.

There is a gaping hole where the independent record label scene should be. You can count the number of truly viable independent labels on a pair of chopsticks.

Modern Sky has just celebrated its 10th year in existence and, much like it’s rabbit-warren of an office in West Beijing, it’s business model is a convoluted arrangement of media company, record label, artist management and design house; a model that has allowed it to survive in this hostile environment. It has amassed a significant percentage of the Chinese rock catalogue in the process. Physical releases are practically a loss leader for Modern Sky with digital revenue also remaining a minor consideration.

Label Manager Meng Jinhui explains that they normally take over management, allowing them to promote the hell out of the artist rather than the album. Resultant brand co-operations with these artists and the label itself generate the bulk of Modern Sky’s income, alongside consultancy for mobile content and a wide range of video production and design projects. You have to be versatile to survive for ten years in China.

This business model means that Modern Sky gain very little from licensing foreign albums and only really do so occasionally, as with their release of Radiohead’s ‘Kid A’. They are very open to approach on the subject of licensing but prefer to look down the route of collaborative work between their artists and the west – to create something new. In general, if you’re looking to license an independent album over here, be prepared for a luke-warm response. Modern Sky have been trying to release Mogwai’s ‘Mr Beast’ for over a year now but still have not been cleared by the censors at the Ministry Of Culture. Even when it eventually is released they only really expect to shift 2,000-3,000 albums. These guys are in it for the love. As you can imagine, advances are very difficult to come by.

© Ed Peto 2007

NOTE: This is an extract from the ‘Access China’ report commissioned by UK Trade and Industry Department and British Underground.