Outdustry’s in-house net-label MicroMu is proud to present a special performance from it’s first international signing, Fink…..

As the first acoustic act on legendary electronic label Ninja Tune, Fink has carved a unique path as a singer-songwriter. With a background in downtempo beat production and top level remix work, his brand of acoustic music is distinctly modern while remaining deeply intimate as a live show; a formula which has seen him share the stage with the likes of Zero 7 and Massive Attack and earned him rave reviews around the world:

“Mean moody and magnificent. One of the most original singer-songwriters around.” – Clash

“…say hello to your new soundtrack.” – NME

“Surprises when you least expect it. Sort of Revolution refuses to succumb to the obvious.” - Mojo

Fink will be performing solo-acoustic for two small shows in Beijing (MAO Live on Nov 5th) and Shanghai (Yuyintang on Nov 6th), followed by a mainstage appearance at Clockenflap Festival in Hong Kong (Nov 8th).

Acoustic legend Wan Xiaoli will be supporting Fink in Beijing. Shanghai support to be announced…

Tickets 50RMB in advance, 60RMB on the door

http://micromu.com

http://douban.com/artist/finkmusic

http://myspace.com/finkmusic

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Will and I actually first met over a beer at a music venue I was booking at the Edinburgh Festival in 2005, when he was working as a music journalist for Straight No Chaser. We have both taken somewhat drastic turns in our careers since then and, by happy coincidence, Will stumbled across this very blog and decided to get in touch to reminisce. We have been chatting ever since about his work, particularly with regard to it’s relevance to China.

Will Page

His latest report The Long Tail Of P2P, co-authored with Big Champagne’s Eric Garland, was presented to much fanfare at this year’s Great Escape Festival in rainy Brighton, UK, an event I was lucky enough to be invited to attend (Thanks Jon McIldowie and UKTI). Will has kindly agreed to me running a few questions by him on the subject:

Ed Peto: There has already been a good deal of coverage on your work on the demand curve for digital music consumption – from New Scientist to the Financial Times – particularly with regards to your contention of Chris Anderson’s Long Tail theory – but, for the benefit of people who haven’t read it yet, could you give us a quick elevator version of your latest Long Tail Of P2P report and its findings?

Will Page: Sure. The original Long Tail concept, as laid out by Chris Anderson in a famous Wired Magazine article in October 2004, goes like this: If you offer people more choice, and help them make that choice, they will take that choice. It proposed that in a world of widespread Internet access, it no longer makes sense to cater to the public appetite for the most popular CDs, DVDs and books. Instead, even the interests of the smallest niche might now be served. In short, the tail of available niche products would lengthen (supply-side effect) and then fatten with sales (demand-side effect). And so the “Long Tail” emerged.

To recall, Anderson’s theory relies on a change in the nature of the supply curve given barriers to entry falling and a great many new products can now get to the market. However, it takes two curves to tango in economics, and consideration of the demand curve completes the picture. What we uncovered from that analysis was a shock to some and no surprise to others: a ‘hit-heavy, skinny-tail,’ log-normal distribution for legal online music consumption; a distribution not that dissimilar from what one might expect from a more traditional, bricks & mortar store.

This dormant tail, pinhead pattern appeared across a number of digital music providers, in the markets for singles, albums, as well as streams – the three markets for legally consuming music online. But of course the illegal music market has been with us for longer, and is considered to be much larger than the legal one – so the next intuitive step was to understand the shape of demand in P2P. What we uncovered was another hit heavy skinny tail distribution, and that’s what we presented at the Great Escape. The results raised a few eyebrows, that’s for sure.

EP: Here in China we see also see an incredibly head-heavy distribution curve, with pop hits dominating the musical landscape. I tend to explain this by suggesting that, in China, music is used as a way of fitting in and not as a differentiator as it often is in the west. In short, the reason, I believe, is largely cultural (with censored media being another contributing factor).

According to your research, however, western consumers also largely seek out hits even when presented with the essentially infinite choice offered by illegal services such as P2P. Do you think that, like the Chinese, western consumers also have a deep-rooted cultural proclivity for hits, or is the behaviour you have identified in your study a hangover from a period of limited inventory, limited access and bottlenecked media and marketing? ie. Is it nature or nurture?

WP: That’s a great question. Firstly, the fact I’ve uncovered this hit heavy distribution for music does not mean the Long Tail is dead – there may be other examples of ‘fattening’ tails in books, film and television. But then perhaps that’s the point – some forms of media goods are for sharing (i.e. music at a festival) and others are for private consumption (i.e. a book on a train journey). Maybe that’s why ‘Book Clubs’ still haven’t taken off in a social networking era?

Now to your question. I don’t think it’s a hangover – there have always been niche markets, and one could argue that they were more effective prior to the long tail era kicking in. For example, I wrote for the niche music publication Straight no Chaser for seven years, and spent a large amount of time digging for rare Brazilian and African vinyl.

Point being, the magazine has closed (advertising revenues in a digital age) and lots of those niche shops have closed down. So I reject the hangover assertion, there may well be examples of the tail being a lot fatter prior to the book coming out. On that note, let me also add that you have to really think about the quality of data, both then and now. Niche music products are often purchased in second hand record stores – I can testify to that as I practically live in them! Not only is there no data on second hand sales, there’s no copyright either. That’s an important dynamic in an online physical world like Amazon, where first and second hand goods are priced side-by-side. A fat or skinny second hand niche market is therefore (i) hard to prove and (ii) even harder for artists and songwriters to benefit from. It’s an anomaly that’s really worth pondering. .

Another angle towards answering your question is to consider the tools which are being used to understand media markets like music, film and books. I mean this whole Long Tail debate has been dominated by economics, and us economists are terrible at losing sight of reality. Another angle, which we raise in the paper, is that of ‘culture’. On that note, I’m inclined to cite Andrew Bud, the Executive Chairman of mBlox, who has been like a professor to me in pioneering much of this long tail work to date::

“…It means something that we are seeing a log normal distribution in the sales data for tracks. That only happens if the more successful a track becomes, the larger are the random forces affecting its sales. But then the question is how does the market know how big a track is? Why does the scale of a track’s success matter to the choices people make? An obvious answer is that it’s through people chatting to each other and seeing the music talked about in the media. That’s what culture is. So the fact we’re seeing the log normal distribution here may point to the power of culture on people’s choices. Whereas Chris Anderson’s hypothesis of a Pareto power law would be much more about random, individual choices – people alone with their computers. So perhaps, this debate of thick versus fat is really about the power of culture in determining demand…”.

- Andrew Bud

Andrew Bud

EP: Are you able to project future behaviour from this research?

WP: No. We have not attempted any projections or forecasts based on the analysis. The original singles, albums and streaming data sets we worked on were for the twelve months from 2007 Q4 to 2008 Q3. We kept the same time period for the illegal P2P file sharing study, to keep it consistent. What we’re doing now is to look at data sets concluding in 2009 Q1 – so whilst we’re not essentially looking forward, what we can now provide our management team with is monitoring and interpretation of the changes in demand over time.

On that note, co-author Eric Garland raised two concepts in the study which merit attention here: the primacy of listening and music hoarding. To recall, these trends lead to a peculiar irony: widespread listening to music that is never stored coincident with vast stores of music to which no downloader ever listens. I think you can use our rigorous long tail analysis and these two concepts to debate future behaviour. ‘Hoarding’ especially – that’s an incredibly important concept for the music industry to get its head around.

Eric Garland

EP: Do you think that once music recommendation/discovery services have fully developed you will still see the same head-heavy results as you are seeing now?

Consider the following hypothetical online music platform:

• Every track in the world is one click away, with negligible download/buffering time.
• Each user’s music preference profile is perfectly mapped and updated continuously in real time according to their actual listening habits, as opposed to music they just download and then ‘hoard’.
• Music is recommended to this user purely based upon this profile (and other users with similar profiles).

WP: The first thing to appreciate is that it could go either way – ‘good’ recommendation tools could fatten tails, or concentrate activity around heads. What’s going to be fascinating is that we’ll soon be able to answer your question with evidence. By that I mean that excellent sites like We7 and Spotify have gained incredible traction already this year, and that will allow them to further develop their offerings in line with the customer’s demands. From there, we can see what demand looks like, given the infinite choice from supply. .

There’s an important point to be made here, though – which is when critics have dismissed my work by saying that a long tail market without a good discovery tool is just noise. I mean, sure, I take the point – but I’ve got to counter it, as it implies ‘when the facts don’t fit the theory, then there has to be something wrong with the facts’. The objective, surely, is for these promising music sites to become profitable first and foremost, whereas fattening the tail is an optional extra. If the latter results from the former, cool – but it doesn’t necessarily have to work that way.

What I’ve seen so far – and by that I mean some of the staggering success stories of digital music in 2009 Q1 – suggests that the idea that ‘when you offer people more choice and help them make that choice’ their behaviour is a lot stickier, and their willingness to roam a lot more tamer, than the theory would have had us imagine. My colleagues Chris Carey and Gary Eggleton (who are both far brighter than me) think that our work in this area now has us close to helping the music industry understanding the limits of unlimited choice. That’s really exciting as we’ll be able to offer our songwriters and publishers important new insights that they wouldn’t have had otherwise.

On that note, I’d like to quote psychologist Barry Schwartz who summarizes his excellent book, The Paradox of Choice, in a recent TED lecture: “There is no question that some choice is better than none, but it does not follow that more choice is better than some. There’s some magical amount, I don’t know what it is but I’m pretty confident that we’re long since passed the point where options improve our welfare”.

EP: How do the results of this research impact upon your work at PRS for Music?

This question is two-fold: what does it mean for PRS for Music and what does it mean for its stakeholders – the rights holders and users who we bring together. I think you can see three applications of the long tail work, those being costs, segmentation and investment strategies. With regards to the latter, there are some fascinating debates to be had. For example, Anita Elberse has looked into why you get irrational bidding wars in the book publishing industry, even when the market is not in a healthy state. Her work is really inspirational and I’d strongly recommend your readers check it out. My interpretation, for the music industry, comes down to this – if you’re in a market affected by the long tail, do you bet large, bet small or do you bet at all.

One final point, though, is this. My work is not ‘anti’ long tail, nor does it have anything to do with ‘bashing Chris Anderson’ – the press love a Punch and Judy show, but this is about understanding markets. Let me reiterate, I really rate the Long Tail Book and recommend it to anyone who hasn’t yet read it. Moreover, Chris Anderson’s ‘blog’ was an excellent tool for engaging people like me into the debate that we would otherwise not have known about. I’ve always said that as soon I find real evidence of the long tail at work, Chris will be the first to know and I’ll be the first to celebrate. There’s another collaborative project we got going here in London, it’s wrapped up in confidentiality just now but the way things are beginning to look, I should be letting him know very shortly!

© Outdustry 2009

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As far as Danish bands go, I particularly enjoyed Oh Land’s orchestral experimentation on the opening evening, as well as Kiss Kiss Kiss‘ danceable indie-pop on the P3 stage, with the Danish crown (in my ill-informed opinion) going to one of the best live acts I have seen in a while, Who Made Who, who rocked a packed out mega-barn of revellers on the Saturday night.

I also have to make an honourable mention of Norwegian artist Rockettothesky who’s esoteric take on song-writing – including a track about ‘horny ghosts’ – stayed with me for some time after the show, to the point where I bought her album Medea off eMusic as soon as I got home. Good stuff.

As far as me ’spewing forth’:

Video made by (and courtesy of) SPOT Festival

Thanks very much to everyone at SPOT, particularly Martin Røen Hansen and Henrik Friis, for a fantastic weekend.

© Outdustry 2009

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“every click or search [our users] have done, and any words they have posted on the Internet, have contributed to this report”

The results are presented in top ten popularity lists for everything from “Internet Hot Figures” (No.1, not surprisingly, is fallen Olympic hurdles hero Liu Xiang), through “Internet Hot Key Words” (Sichuan Earthquake) and “Movies” (John Woo historical, Red Cliff).

The top 10 “Musical Singles” list provides as accurate a chart as any as to what China was listening to in 2008. These are the mega-hits – with a predictable trend towards Olympics and Earthquake themes – presented here for you in handy video form:

No.1 : You And Me – Liu Huan & Sarah Brightman

The Olympic theme song, sung at the opening ceremony.

No.2 : The Air – Tan Jing

Another Olympic related song featured at the opening ceremony.

No.3 : Beijing Welcomes You – Various Artists

Sung by 100 artists from around China, this song celebrated the 100 day countdown to the Olympics. It was also played as the torch was being lit during the opening ceremony.

No.4 : Be Together, Alive Or Not – Jackie Chan

Reportedly written in the two days following the May 12th Sichuan earthquake by the staff at BOCOG (Beijing Olympics Organisation Committee). Jackie Chan flew up to Beijing, recorded the song on May 15th, it was receiving nationwide airplay by the 16th.

No.5 : Blue And White Porcelain – Jay Chou

CCTV’s annual Spring Festival TV Gala is a bona fide hit factory. This song benefited from the 200 million+ (approx.) viewership of the 2008 edition, guaranteeing it’s hit status amongst netizens.

No.6 : We Chinese – Various Artists

Another gathering of superstars – including Li Yuchun, He Jie, Su Xing and Yu Haoming – sing for victims of the Sichuan earthquake.

No.7 : Capricorn – Jay Chou

For some reason they have included Jay Chou’s album on a singles chart. His 2008 offering, Capricorn, spawned multiple hits including the two seen on this list.

No.8 : The Rice Aroma – Jay Chou

No.9 : I Know You Will Come – Xiao Ke

Recorded the day after the Sichuan earthquake.

No.10 : Painted Heart – Zhang Liangying

The theme song from the movie Painted Skin, sung by Zhang Liangying, performed by the Moscow Symphony Orchestra.

© Ed Peto 2009

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This unlikely event had taken band manager Simon Napier-Bell 18 months of negotiations to organise; a process documented in his 2005 book I’m Coming To Take You To Lunch.

The idea to play China came about following the bands insistence that they become the biggest act in the world within two years. Napier-Bell and co-manager Jazz Summers knew that this would be impossible following the conventional route – namely touring America continuously for years – so came up with the China tour as a globally-press-worthy publicity stunt. Napier-Bell flew to China and sat in hotel rooms calling whatever government phone numbers he could get his hands on, usually leaving the message: “Tell them Simon Napier-Bell called to take them to lunch”.

“It was two years of lunches – I fed the whole government, 143 people three times each.”

The resulting shows were captured in a Popumentary which itself was not short of difficulties behind the scenes.

The final version, Wham! In China : Foreign Skies, seems to be out of print but is available in it’s full glory on Chinese YouTube-a-like, Youku:

The film was shown to 70,000 Wham! fans at their 1986 Wembley concert, the largest audience ever for a premiere. It might not be an enduring classic – it is slow and fairly insubstantial – but the impossibly absurd sight of George Michael and Andrew Ridgeley, replete with bouffant hair and metre-wide shoulder pads, meeting the staid Chinese bureaucracy mano-a-mano is too good to miss. Choice quotes abound throughout:

“Where are all the screaming girls?” – George Michael at Beijing Airport

Beyond this, Careless Whisper has now been added to my list of “Secret Shames”. Fantastic song.

© Ed Peto 2008

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Now, despite an incredibly tough year for music in China (due to Government clampdowns surrounding the Olympics as well as the horribly misguided soap-boxing of a certain elfin Icelander), exactly a year later and the Beijing sound has come along leaps and bounds.

I thought it was about time I follow up on that year-old post, using the medium of budget video, to bring you up to speed a little:

• The Old-Guard: The older bands are still getting better (See SUBS, Re-TROS and Miserable Faith in the videos).
• Strength In Depth: The younger bands have come on from being self-conscious mimic-artists into snarling, full-blooded outfits of their own (See Snapline and Carsick Cars in the videos).
• Public Demand: A number of festival organisers still went ahead in seemingly impossible conditions with defiantly impressive results.

While 2007 will be the year the paper-trail leads back to in terms of the new Chinese bands really starting to find their own voices, 2008 is the year they perfected them. This video of Maybe Mars‘ artists Carsick Cars (taken last weekend) shows an increasingly confident band belting out their bona-fide indie anthem, ‘Zhong Nan Hai’. I really thought very little of them when I arrived in 2006 and it has been a pleasure having my initial assessment slowly being proven wrong:

Against all the odds both the Midi and Modern Sky Festivals went ahead in some form or other. Modern Sky resorted to a strange, half indoor, half outdoor, all-concrete affair just next to last year’s Haidian Park venue. There is no doubt that it lacked the grassy festival atmosphere but there was a pleasingly rough-around-the-edges industrial feel, made all the more so by the abysmal pollution which can be seen in the opening shots of this crudely put together festival video:

The daddy of Chinese music events, the Midi Festival, moved around it’s date and venue so many times that most news sources gave up reporting on it. For better or worse at the last minute they decided to host it back at the Midi School campus. This meant a huge scaling down and a number of sound issues. Combine this with some filthy weather and you would have thought it was a washout, but outstanding Saturday headliners and Midi School alumni Miserable Faith gaily skipped through the genres – ska, rap-metal, reggae, rock-ballads – to make my one trip up there totally worthwhile, as you can see from this next video. Their set closer, Life’s Most Perfect Day, is a hard-men-go-soft ballad that would play well anywhere. Also worth noting is the bemused crowd reaction to sugary Danish pop-mongers Summerhill: Two worlds collide with indifferent results:

So all things considered this place is shaping up nicely. If the post-Olympic landscape allows for more and more live music opportunities, then the crowds and the confidence will grow. The bands are certainly getting there. The night I filmed the Carsick Cars video also featured current buzz-band Ourselves Beside Me and The Gar, making a night of Chinese newcomers who would do themselves proud in any venue in the world.

© Ed Peto 2008

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When unknown Chinese singer Yang Chengang wrote and recorded the song Mice Love Rice in Wuhan, Southern China in 2000, he would have had no way to predict it’s eventual impact. While the pop ballad languished in relative anonymity on CD format for four years, it’s eventual arrival on the recently booming internet in 2004 sparked off a word-of-mouth phenomenon that would ultimately peak with 6 million legitimate ringtone sales on China Mobile in one week as well as a rumoured 200 million illegal MP3 downloads within a year.

Once exposed to the powerful Chinese internet, Mice Love Rice and it’s exemplary use of instantly recognisable melody as well as inoffensive, syrupy lyrics – in this case a chorus that includes ‘I love you, loving you, just like mice love rice’ – came to define what is now known as a ‘wang luo ge qu‘ or ‘network song’, a literal reference to the exponential spread of a song through internet networks. This process of musical ‘crowd sourcing’ has proven to be the paradigm of the modern Chinese musical landscape.

Song Ke, founding CEO of one of mainland China’s leading record labels, Taihe Rye, employs a team who use software to monitor the various chart systems and music networks around the internet, looking for songs that are ‘making noise’ and stepping in and signing them up once they have proven to be a crowd pleaser. The practice has paid off: a few songs by unknown artist Dao Lang were “making a lot of noise on the internet,” says Song “We got in touch with him, signed all his digital rights, put our new media marketing team behind it and sold 30-40 million ringtones in 2005 alone.”

Unlike in the west, however, this ‘democratisation’ of music success – where the web organically decides which songs reach the top of the pile, or at least the attention of the likes of Taihe Rye – has not led to a vast broadening of musical tastes. In fact, the chat boards, blogs, instant messaging systems and peer to peer networks that organically built Dao Lang and Mice Love Rice into hits have shown the opposite to be true. Instead of a range of defined sub-genres, the network effect has crystallized music into one much larger homogenous category, based on the commercial pop song style and format exemplified by Yang Chengang’s hit. The much-feted ‘long tail’ of alternative music and niche genres has, to date, failed to emerge.

Songs that satisfy the ‘network song’ criteria for mass acceptance and go on to become internet hits are frequently gathered together by portals and websites into charts of ‘deep links’ to unlicensed MP3s or streamed music. “The charts we present are simple marketing tools to attract visitors, who mainly love pop. We do have a social network section for discovering music but it is our MP3 search which represents on average 40% of our entire traffic“, says Gregory Wu, Associate Director of Digital Entertainment for music search behemoth Baidu. While the IFPI estimates that China’s physical market was worth only $37.7 million dollars to the labels in 2007, Wu says that Baidu receives roughly 100 million MP3 search enquiries every day, giving some idea of the gulf between the ‘paid for’ and ‘not paid for’ music markets.

According to the latest China Internet Network Information Center report, 84.5% of Chinese netizens listen to music on the web, making it the most popular internet usage ahead of even search and email. These legally suspect music charts are therefore key traffic drivers and are typical of the average Chinese music browsing experience. They also represent bottlenecks that impair music exploration and “perpetuate low common denominator music, leaving music discovery to chance,” according to Wu Jun, CEO of digital distributors R2G, the company behind Wawawa, a non-mainstream legal MP3 store. “The big players are not necessarily music specialists, so have no real desire to develop music recommendation/discovery facilities beyond the simple chart format”.

The Chinese internet user base, which reached 253 million in June, is also getting, on average, poorer, younger and less educated every year as the socio-economic barriers to internet access are gradually lowered. Song Ke explains how this increasingly worse off audience skews the tastes further towards mainstream pop. “People who do not have a lot of money want to look up to their pop stars and imagine what life is like up there. Alternative music is a luxury for the middle class; for people who have tasted some of the high life and are looking for something else”.

What has resulted is a kind of echo-chamber effect, in which only low common denominator, crowd approved pop music is fed back into the network through these curated bottlenecks. The priority for the Chinese labels is to please the network and make it into these bottlenecks, not push musical boundaries forward, as failure to make it into these top strata of recognition brings with it a hefty price. As one of the only other major sources of music industry income, brands focus the bulk of their sponsorship monies on the highly visible hit artists, compounding the relatively anonymous non-chartees to further suffering.

According to analyst group Music 2.0, however, 64% of users surveyed said that they frequently could not find the music they were looking for on a music search engine suggesting that there is at least some desire to stretch beyond what is presented, but as Song Ke puts it “these music sites, search engines and charts are run by a generation of people who grew up on melodic Hong Kong and Taiwanese pop. They are pushing what they know and like. Future generations will want to change this and demand more variety, but it may take some time”.

© Ed Peto 2008

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Midi claim that they would be free to go ahead but that the venue would have to remain open to joe public, obligating Midi to pay 700,000RMB a day for the mandatory use of strict Olympic security barriers. Obviously a crippling financial burden.

Festival organisers are in discussion with Haidian park, the site of recent Midi festivals, for the re-scheduled event. They are waiting to hear back from local government on this. The issue with this new venue – which also relegated everything but the main stage of the Modern Sky Festival to an indoor site next door at Haidian Exhibition Hall – is that the park is currently being used by a battery of anti-aircraft guns which were in place as, once again, part of the Olympic security measures.

What this set-back means for Air’s performance at Midi remains to be seen, although I suspect this might kill any hopes a lot of the international bands have to play the festival.

© Ed Peto 2008

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The sad thing is that they have been forced to go head to head, time-wise, in most cases asking the limited pool of acts for exclusivity. They are also both largely taking place indoors – Modern Sky in Haidian Exhibition Hall and Midi in The Olympic Centre – making for an all the more surreal and stilted affair.

Modern Sky have already announced a full line up which is conspicuously free of foreign acts, as has been rumoured for some time now, namely :

While Midi, who have actually yet to officially receive a license (they said in a statement on Sept 12th that the government had ‘approved’ and that they would be getting their license on Sept 16th ie. Yesterday), have erred on the side of caution and gone for the more austere promotional flyer, without line-up, below:

This cautious, patient approach may have paid off as it looks like Midi have secured a license for their international bands this year. The obvious excitement here being the inclusion of downtempo-maestros Air in the line-up. The French duo already have two Yugong Yishan shows here in Beijing with the oft asked question being ‘why don’t they just stay on and play Midi’. Well, it looks like they are:

Here’s looking forward to what should be a really entertaining month of live music. Good luck to both festivals. Real lessons in persistence.

© Ed Peto 2008

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Roughly four years ago while living in the Senegalese capital of Dakar, Matt started blogging about the music he came across during his travels in the region. It was part of the first wave of audioblogs and “certainly the first to deal with African music” says Matt.

As his life and career has sent him to more and more exotic places, the focus of Benn Loxo Du Taccu – which means “One hand can’t clap” in Wolof – has developed to accommodate music from all around the world, with a journal giving background, anecdotes and context for the obscure, free MP3s (for a limited time) attached to the end of each post. A fantastic example of well communicated individual passion finding an equally passionate audience through the internet village. Musical discovery at its best.

After four years and 500 posts Benn Loxo has gone on to earn a devout following, some top notch coverage in the likes of Wall Street Journal, New York Times, Village Voice, Boston Globe and Rolling Stone as well support from uber-cool hip-hop label Quannum Projects who, after spotting the site, offered to support it financially. Matt was also hired to write Benn Loxo style articles for MTV music blog URGE as well as any number of other world music related writing jobs. Pretty much living the blogger’s/music fan’s dream.

I first bumped into Matt at a Beijing live gig/recording session for my company’s in-house record label, MicroMu (which is in development stages at the moment. I will cover MicroMu in more depth on this blog once the label is a bit more established. I don’t want to count chickens but it is looking really exciting at the moment). We got along like a house on fire and he got pretty enthused with what we are up to, enough to “blog the shit“ out of our artists.

Beyond wanting to turn you on to a genuinely wonderful music discovery service, I also realised that, as MicroMu is laid out in blog format, this gave me a prime opportunity to write a hilariously titled blog post. Double whammy.

To anyone interested, I highly recommend checking out these Benn Loxo posts, complete with extraordinary comments, here, here, here and here, to see what kind of passion Matt generates in his audience. Also definitely worth a read is this article written about Matt himself. If I ever had anything like this written about me I would die a happy man.

© Ed Peto 2008

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“The 4.7 billion viewers who accessed television coverage of the Beijing Olympics officially translates into approximately 70 percent of the world’s population, or more than two in every three people globally.”

When you consider that each country’s coverage of the Olympics would have used different theme music (including the ubiquitous Chinese theme songs), the one musical consistency for the entire 4.7 billion people would have been the national anthems played ad nauseam throughout the entire 16 days.

This must be a contender for the most exposure ever for a body of musical work in a two week period. You can imagine why Peter Breiner, the man who arranged all 200 national anthems for the Athens Olympics in 2004, was pretty pissed off to find out his works were being used this time around as well without any approval, recognition or compensation. The Washington Post reports that while the Beijing Olympic Committee say all anthems were “orchestrated by Chinese musicians”, Breiner is “100 percent positive” the arrangements are his.

I’m fairly certain Breiner will not see a penny for this. He will just have to enjoy the outstanding anecdotal fodder that comes from being the victim of perhaps the most visible copyright infringement of all time.

© Ed Peto 2008

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“Sometimes I’m so very happy I live in India, so far away, physically and otherwise, from the tentacles of the RIAA (& MPAA & a whole lot of other entities) that all this crap over filesharing is usually just of academic interest, except when a good site or gets taken down (i.e, to come up again from somewhere else later). I take whatever I can find on the torrent sites (& sometimes limewire) and just queue them up without any thought whatsoever and with only my hard disk capacity to constrain me.

Music Piracy? The only software on my PC that AREN’T pirated are freeware and my antivirus. It’s been over 50GB’s worth of music downloaded since I discovered the flac format last year (yes, I nitpick over quality), and only reason it’s not a few times more than that is because music’s not the only thing I download. Do the record companies even think what they plan on doing about places beyond the West, or do they have at least enough brains to realise that that would be instant self-overkill? And no matter how much higher incomes are in developed countries, will people just quietly cough up the $ for songs when the same stuff can be had for free, with guys in Malaysia paying not even lip service to those dumb old fat cats? Maybe they really should try and sue everyone all over the globe, just so they can get bloody bankrupt enough to shut shop permanently and leave everyone in peace. Like the LP or cassette, the CD is now good only as a collector’s item for fans who like keeping them, like I do for Iron Maiden. At least, that’s how I see it.

Which brings me to a question. Over 90% of what I’ve downloaded is stuff that isn’t even heard of here in India, let alone be available even in the largest cities. There were about 30,000 people at Iron Maiden’s 1st India gig last year, with quite a few more outside the gates ’cause thay couldn’t get, or buy, the tickets (about $23 & $38). There wouldn’t have been much more than 300 if not for piracy and the grey market, especially since Maiden records weren’t properly available before the late 90s. Bangladesh, with millions of fans listening to western music has no official CD retail. So, is taking music to which I have no other access to within the nation’s borders really stealing?“

-Tashfin

The last point is particularly poignant. Living in these outside markets is a constant challenge to your morality. I do not think that anyone could begrudge a fan like this from having fake copies of the band that he loves when there is no legal alternative. So does that mean it is morally acceptable stealing?

The IFPI/RIAA/MPAA approach to this kind of copyright ‘theft’ is as black and white as George W Bush’s post 9-11 response: ‘You’re either with us, or against us’.

As a commentator mentioned at the time, ‘I’d like to think that our foreign policy is a bit more nuanced than that!‘. The same can be said here but it seems that copyright is an immutable truth. However, as the focus moves more towards the developing countries – where people have just as much passion for music but only a tiny fraction of the spending power – anyone who lives in them will tell you straight up that shades of grey will have to be added to the copyright spectrum.

© Ed Peto 2008

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China never fully adopted the “traditional” tools of music discovery and consumption: TV, radio and the print press are all heavily monitored by the government and relatively anodyne as a result; CDs never really gained any meaningful traction; live music events are circuses of permits and arbitrary cancellations.

The bleak circumstances of China’s music business have resulted in the Chinese consumer inadvertently leapfrogging into the next generation of music consumption, even before their western counterparts.

In February this year, after a 53% growth rate in 2007, the Chinese Internet Network Information Centre (CNNIC) finally declared the Chinese internet base to be the largest in the world with 221 million users. At 16% penetration, this still leaves huge room for growth.

The internet has not only afforded a freedom of expression and identity previously unavailable to the Chinese, it has also almost totally usurped the roll of all offline music media: portals, webzines, bulletin boards (BBS), video sites, music blogs, music streaming. In fact, so important has it become as a medium that a full 86.6% of all netizens use the web to listen to music – the highest of any usage including search and email.

Despite a vast audience, hungry for music, the Chinese internet suffers from poor depth of catalogue with an almost negligible “long tail”. Super portals like Sina, Sohu and clear leader Baidu (with 75% of the search market) bottleneck music into charts of 100, 200, or 500 songs on their front pages and pay little attention to anything else, meaning that while it is possible to find deep catalogue, the average user simply does not look past the hits. High charting – and therefore high visibility – is crucial and, as a result, payola and chart rigging reputedly abound.

Full track downloadable MP3s have been (illegally) free to user from the outset, partly because 86% of internet users earn less than $430 per month and partly because China’s poorly enforced copyright law is only just becoming a topic of public debate ie. too late.

Baidu’s MP3 search efficiently presents “deep links” to copyright infringing material, free for download. It is through this service that the vast majority of full track digital music is consumed in China, while Baidu generates revenue through advertising and mobile services such as ringtones and Caller Ringback Tones (CRBT) ie. the tone you hear when you are calling someone and waiting for them to pick up. No surprise then that the company is facing various lawsuits.

Leaked reports earlier this year suggest that Google China (g.cn) are planning on partnering with legal music site Top100.cn to offer free-to-user major label catalogue found through Google MP3 search. This arrangement, due to launch towards the end of 2008, would allow Google to compete with incumbent behemoth Baidu in the music search sector but would also signal a seismic change in music consumption: major labels conceding that music must be free-to-user. China is increasingly being seen as a brutal testing ground for radical new models that can survive in a “more than 99%” (IFPI) digital piracy market.

In this climate the real currency is the CRBT. The strength of this as a product is its “walled garden” environment: mobile operators China Mobile (69% of the market) and China Unicom (the rest) host a catalogue of music on their servers – the user pays USD $0.70 CRBT service charge a month and then USD $0.29 for every new CRBT, all without the music ever leaving the operators’ servers or payment systems.

China Mobile’s CRBT revenues might have leapt 74.7% to nearly USD $1.7billion, according to their end of 2007 report, but there is some way to go with the distribution of wealth. The operator keeps the service charge in its entirety and only divides the individual tone purchases up, with roughly 35% for master and 10% for publishing if the deal is direct with China Mobile rather than an aggregator.

According to M:Metrics an astounding 34.8% of the 530 million mobile subscribers in China use their phones to listen to music, compared to 5.7% in the US. China’s networks, infrastructure and data capabilities might need to improve but the mobile juggernaut is well on its way.

China Mobile launched the first over-the-air full track MP3 download service in February this year and expect brisk business. When you consider there are some 300 million people who own a mobile but not a PC, their phone is likely to be their first personal access to the internet and only consistent access to digital music. Whether this convenience will result in people paying for that music remains to be seen.

There is a lot of money to be made within that enormous walled garden. It might be a long time, though, before anyone other than the monopolistic mobile operators and a select few music stars can see any of the benefits.

© Ed Peto 2008

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Normally I would have turned this down as the money tends to be poor and the deadline was a bit abrupt, but the magazine in question was Rolling Stone China - re-named ‘InMusic’ after a disastrous launch left them unable to publish under that name – and the album was Radiohead’s ‘In Rainbows’.

Ultimately the prestige of the publication and the immediate relevance of the album (I had it on rotation at that point) saw me sitting down the following day to churn it out.

It was only after I got my copy back that I started to wonder why they had approached me, a westerner, to review such an important album. I met for a coffee with my editor Lua Zhou to ask how it came about:

Lua Zhou: There is a problem with Radiohead. We talked about this in the editors meeting and we found that so many people love Radiohead but no-one has ever clearly said why they are so good. There is no clear answer, no clear review in the past. So I thought maybe I should find a foreign writer to write about it. Especially someone who has experience working in the western music industry, or who is a musician, because they are really a musician’s band – that way we can find out technically why they are good.

Ed Peto: Would none of your writers be more suited to write about Radiohead for the Chinese audience?

LZ: In the past I have given my writers a list of things to write about to make a perfect article: Relationship the musician has with label, what kind of instruments do they use, who is the producer and how have they influenced the music. They all say to me, ‘why do you want to be so technical?’, because Chinese writers are only used to writing things from their feelings.

There is no clear line between categories of music as the genres are not mature enough, it is not so clear what type of music you are playing so things are described in a more general way. Reviewers do lots of comparisons – Say compare this album to Kid A. I don’t think they can do as much technical analysis. Traditionally they don’t do this. They always start with a factual band introduction – which I normally cut – then go into the spiritual side, the meaning of the lyrics and how it makes you feel.

EP: Do you think genre awareness is important?

LZ: I think China is a real mash-up country. We just listen to different stuff. The record shops don’t tell us what is what, they just put all the records together and you take all different styles at the same time.

EP: So would Chinese musicians not understand genres and the recording process and be able to write technically?

LZ: Actually, I included a small interview with a Chinese rock musician after your review. He’s a guitarist from a band (Sound Fragment) that actually quotes some of Radiohead’s songs in their music. He gave me very short answers. He could not explain why Radiohead is good:

• Do you listen to Radiohead? : Yes.
• How did you hear about In Rainbows? : The Internet.
• Why is it attractive to you?: Because they are Radiohead.
• Are you satisfied with the album? What do you think of Thom Yorke’s performance?: Surprisingly wonderful experience.
• What do you think of how they released this record?: Because they are rich, they can play with their record.

So, when you write about Jigsaw Falling Into Place, it sounds like a band who has very good control of their music, of their skill:

“It is back to the five-guys-in-a-room for album highlight and first single Jigsaw Falling In To Place. If ever there was a song to unite all Radiohead fans past and present this surely must be it. Starting with a simple acoustic guitar riff, then beefed up with bass and drums, then enter the vocals and backing vocals. There aren’t many acts in the world that can build this level of heat from the basics of band music. It just requires the change in vocal pitch to send this into the stratosphere, ready for the smooth middle section on 2.53, once again building to a second climax, now including strings, then winding down to a breathless finish.”

- Excerpt taken from original English draft of my article.

It takes a good technical explanation to show this. Chinese writers would never write like this, how Radiohead make the peak, how they control it with the voice.

EP: How would a Chinese writer describe that song then?

LZ: They would use an image to describe it. I think it is about the language. The Chinese language is more about scenery than English – more emotional. I think English is more technical. Colder.

EP: So what do you think are the advantages to writing in a more cold, technical way? Why do you want to influence your writers in this direction?

LZ: I think we need professionals. It is a basic thing, as a music journalist, you should know how the music is made and then you can go on to talk about the emotional side. Because anyone can write about emotions.

After we published this article I sent it to all of my writers some of my review writers [amended 09.02.08] and said ‘take this as an example of how western writers write about music’. I think they can do this if they just learn.

EP: Is that not telling them that they do not know how to write?

LZ: Japanese review writers also always talk about their personal life or feelings in the review. I don’t care about their personal life, all I care is if this album is good or not, how did they make it, what type of sound it has. I guess this situation in Japan is similar to China.’

N.B: For any Chinese readers wanting to read Chinese music writers, here is a quick list of some of the better known blogs:

Yang Bo
Yan Jun
Haofang
Wang Xiaofeng
Sun Mengjin

© Ed Peto 2008

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Ahead of his MidemNet panel appearance, Mathew Daniel, VP of R2G (digital distribution company) in Beijing has a few observations and words of advice for labels seeking digital licensing opportunities in China:

As Olympic hosts and country-of-honor at MIDEM, China’s music industry is an increasingly common feature on the western agenda. There is, however, almost a whiff of the ‘Wild East’ in the way companies are approaching licensing in the Middle Kingdom.

It has to be realized that the vast majority of labels at MIDEM are probably currently unscathed by piracy in China and that’s likely because their music is so obscure in the Chinese consciousness that they have not even had the dubious honor of gracing the servers of China’s notorious MP3 search engine, Baidu.

Piracy in China often gets a lot of attention but many forget the other Ps of marketing and these are the basics that labels intending to come into China should first focus on. For dramatic effect, let me first quote Tim O’Reilly when he said that “Obscurity is a far greater threat to authors and creative artists than piracy“.

I wouldn’t go so far as to say that one is worse than the other as it is a case of horses for courses. I would also add that in China, in true Darwinian fashion, one man’s piracy is another man’s marketing. But as O’Reilly explained, piracy eventually develops in a manner akin to progressive taxation in exchange for greater exposure and appeal: There is always the regretful possibility that one may eventually despair at the crossroads of Robert Johnson.

Ed Peto’s piece about the music business in China also noted the labels’ part in engendering piracy in China:

“The arrival of western product in the early 90s came courtesy of ’saw-gashed’ CDs: Excess stock and deleted titles from western majors attempting to avoid taxation and disposal costs. These CDs had their cases cut to mark them as defective and were then shipped in to China through free-market economic ports like Guangzhou, only to end up on the black market. An end result that can be seen as a partial shooting-in-the-foot for the western majors who then had to come in and fight against the pirate networks they inadvertently helped set up.”

Kaiser Kuo, one of the pioneers of China’s rock scene added, “During the 1990s they were an important source of foreign music”. And so, this rejected music from Western shores – a good proportion being hitherto obscure – has bizarrely taken root in China while the majors also propagate low common denominator fare like the Backstreet Boys, Britney Spears, Celine Dion, Sarah Brightman et al in CD stores. A recent alumnus of this group, UK’s X-factor winner Shayne Ward was in Beijing this week and was awarded a Gold Record for sales of 15,000 for his new CD ‘Breathless’.

The major labels are still counting on physical distribution to help make their numbers in China and International Marketing Director at Universal Music China, Danny Sim has worked tirelessly to develop the market for international artists. In 2007 his efforts resulted in “a significant increase in revenues for CDs and I expect it to be even greater in 2008″, but in general international artists still account for probably less than 10% of the majors’ overall digital revenue in China. As more Chinese are being exposed to Western music via the internet and the media playing more Western music, Danny also hopes that the labels and SPs can work together to cultivate music genres and themes instead of single song hits.

However, this cannot happen in a vacuum and other Western labels who do not have the benefit of an existing network in China will have to do their part to sow the seeds in areas that are often taken for granted, like pro-actively providing artist information in Chinese, building artists’ websites in Chinese and, in general, stimulating more literature and musical discussions about artists online.

The following is an important checklist for labels intending to license digital music in China and illustrates the prior requirements before their music even tempts the pirates:

In this chart, ‘Music’ refers to whether the song is present or absent on the Chinese networks and highlights the necessity to take control and seed the song in China as the first step. Even if the label has not managed this, third parties might already have done so, which gives rise to the pirated presence. Only when the content has been put in front of the consumer in a meaningful way can they judge whether it appeals to them or not. There are multiple applications and formats in which music manifests itself in China and the challenge in the last mile is to manage the revenue collection or at least ensure that the application mix results in net positive revenue overall.

It is of paramount importance that an infrastructure is developed wherein information about artists is propagated combined with recommendation engines to guide the user along in unfamiliar territory. Ian Rogers recently lamented the death of the album cover but in China a more profound barrier exists that stunts the dissemination and understanding of Western music: The lack of basic and standardized metadata including genre classification that allows listeners to recognize song titles and artists.

As part of this initiative, R2G has developed one of the largest Chinese music metadata databases in the world complemented with licensed lyrics.

Much fuss has been made about the impressive revenue from mobile music in China – iResearch estimates that Service Providers (SPs) and Content Providers (CPs) earned up to RMB 3 billion (US$400 mil) in 2006 and China Mobile reported revenues of RMB 5 billion in the first half of 2007 for Caller Ring Back Tones (CRBT) alone, but before prospectors start packing their digging tools, it is important to note three facts:

1. Of all the mobile applications, Caller Ringback Tones generate the largest revenues but it has to be noted that the bulk of it goes to China Mobile. When a user first subscribes to their CRBT package of choice (from one song to ten), only the first sign-up fee is shared amongst China Mobile, the SP, the distributor, the label and the music publisher after which the full monthly subscriptions of 5 RMB goes solely to China Mobile. However, substantial amounts can be made by top Chinese singers who can sometimes sell between 10 to 20 million subscriptions, but this is a rarefied space that is not breached by Western artists. (Graphics by China Mobile. Note: In Chinese lingo Color Ring = Caller Ringback Tones):

   

2. The bulk of the revenue in mobile music is being garnered by Chinese music albeit dominated again by low common denominator fare – and I do suspect that the rural population does sway the popular vote. An examination of the CRBT sales charts for 2007 reveals a dearth of non-Chinese tunes with notable exceptions being Groove Coverage’s ‘God Is a Girl’, with 2004/05 hits Michael Learns To Rock’s ‘Take Me To Your Heart’, Emilia’s ‘Big Big World’ and Backstreet Boys’ ‘As Long As You Love Me’ still earning residual revenues in 2007.
3. Small CPs and especially Western CPs are at a natural disadvantage in negotiating deals with SPs and regardless of whether a deal is struck, there is every possibility that the CPs songs (assuming that they have sufficient appeal) will appear on SPs properties for distribution/sale. And it being an extremely time consuming and technology intensive effort to find out who is pirating the songs, and also to verify how much is being actually made by existing SP partners, CPs are likely to realize much lower revenues than those actually being earned.

William Bao Bean, analyst at Softbank China has calculated that such slippages or under-reporting of revenues to CPs averaged at between 20%-35% while R2G’s close monitoring via its proprietary SCM system has caught a number of SPs under-reporting CRBT revenues by as much as 50%. It is thus critical that a trusted music partner is sought in China in order to maximize one’s revenues whilst monitoring accounting piracy levels.

Mobile for now seems to be the domain of Chinese music so Western labels coming to China would do well to invest and focus on developing their training wheels in other areas so that they too can make the leap into this relatively more lucrative arena.

The Chinese song universe is estimated to be not more than 300,000 with a smaller commercial subset with the potential to provide meaningful revenue – and in discussions that some of us had with Chris Anderson during his trip to Beijing last month, he also concluded that there is currently no Long Tail of Music in China. This Long Tail will evolve in China and will be populated by international music and this is where the opportunity lies. Evolving tastes and growing individualism are already seeing Chinese listeners trying seek out non-mainstream music, but this music is poorly represented on the free networks and that is an opportunity to be tapped by Western labels.

It has to be realized that almost all full-length mainstream music in China is currently being downloaded for free, facilitated by P2P networks and search engines like Baidu and Yahoo (who have both already been found guilty of infringements by the courts). And until music labels pro-actively put in more effort to inhibit Baidu’s ability to illegally deliver music, the few existing paid full-length music retail download stores will have a hard time. However, I do believe that with better metadata and genre classification, music education and accessible representation of some of this niche music eg. classical, jazz, heavy metal, punk etc, a paid model at fair prices can exist.

Tim O’Reilly encapsulated it best in 2002:

“Services like Kazaa flourish in the absence of competitive alternatives. I confidently predict that once the music industry provides a service that provides access to all the same songs, freedom from onerous copy-restriction, more accurate metadata and other added value, there will be hundreds of millions of paying subscribers. That is, unless they wait too long, in which case, Kazaa itself will start to offer (and charge for) these advantages. (Or would, in the absence of legal challenges.)”.

For ‘Kazaa’ read ‘Baidu’ and certainly, China is currently in such a situation where if a viable alternative is not delivered soon, the opportunity will be hijacked by less well-meaning entities. Labels who are seeking to move into China should first seek trusted partners and forget about seeking a quick buck via minimum guarantees or advances and instead should help to build up the infrastructure accordingly. Labels that do not do their homework will inevitably get burned by unscrupulous partners.

Likewise, licensing music for streaming to SPs will only provide returns if there is sufficient marketing support for the artists and also supporting literature and metadata. For example, one of the top music streaming sites 1ting.com records Avril Lavigne’s Girlfriend as the top ranked English song for 2007 at a lowly position of 132 with 25,000 streams. The top song for 2007 registered 3 million streams in comparison.

In conclusion, it is important to note the following:

1. China offers its opportunities but when a new Western label comes into town, it naturally falls into the Long Tail.
2. The Long Tail will be a black hole unless the supporting information and tools are provided to help the labels’ acts stand out.
3. This will involve working with a trusted partner who not only knows the China market but also understands the label’s culture and potential of its acts. It might possibly also involve sharing of investment and development costs.
4. Giving away music is not the solution – there is potential to develop a paid model with a valued service. The search engines would have us believe otherwise as befits their objectives.

There is no silver bullet in music for China and the gold at the end of the rainbow can only be mined with a proper infrastructure supported by the labels and retail partners.

© Mathew Daniel 2008

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