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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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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