L to R: Ed Peto (Outdustry), Hu Yong (ChinaFile), Duncan Hewitt (BBC/Newsweek). Photo Courtesy of the Bookworm Literary Festival

Last week I was asked to moderate a panel at the Bookworm Literary Festival here in Beijing. The panel was called “Future Perfect : Social Media” and was described thusly by the organisers:

“Due to governmental and technological restraints, social media is different in China - in both form and function - than in other countries. Join us as Duncan Hewitt (Get Rich First) and Hu Yong, the MediaFile Editor at the newly launched ChinaFile and Professor of Media Studies at Peking University discusses the possible social, economic and political implications of social media in China; the way the government is both using and regulating social media and what the future for this powerful media is.”

Due to the sensitive nature of the subject material we opted for an “off the record” approach - i.e. the speakers are not to be quoted - which led to a fascinating, free-ranging chat from two bona fide China social media experts. To get the ball rolling, though, I offered up the following introduction to the subject:

“It has been said that there two internets on the planet: The internet, and the Chinese internet. Of the 2.4 billion internet users in the world, currently around 24% (570 million) of these reside within China, inside one of the most tightly controlled internet environments in the world.

Social media is perhaps the defining technological advance of our age, allowing the individual to publish globally at the touch of a button, completely revolutionising media, personal expression and, as a result, society itself in the process. 

When it comes to China, however, from a western viewpoint the Chinese internet is often characterised by what it lacks: Facebook, Youtube, Twitter, true freedom of speech. From this outside perspective censorship is the defining element of the Chinese internet experience.

What of the inside perspective though? Perhaps surprisingly, China has the most active social media population in the world, with a 2012 McKinsey study showing 91% of Chinese internet users visiting a social media site in the last 6 months, vs 70% in super connected South Korea, 67% in US and, astonishingly, only 30% in Japan.

Should this really surprise us? It is a question of degree. Coming from a recent history of tightly controlled media, the Chinese internet user has that much more to gain from social media vs their western contemporaries and are therefore expressing themselves with a fervour not seen elsewhere in the developed world.

Social media has catalysed revolutions and been the scourge of political misdoings across the globe. This sense of threat is writ large through the Chinese governments handling of what is perhaps the greatest ever challenge to it’s control. It knows it must engage with social media, but how has it managed to allow social media’s development, provide enough functionality to satisfy the people and yet still “keep a lid on it”? Or is the lid slowly, inexorably coming off?

Today we will try to cover some of these complexities.”

Many thanks to Hu Yong and Duncan for taking this subject and really running with it and many thanks as well to all at The Bookworm Literary Festival for another great event.

6China, China Social Media, Medium, Staff Blog, Ed Peto,

As search engine for Chinese mega portal Sohu, Sogou presents a familiar sight for Chinese internet music searchers: Instant, well ordered lists of direct “deep links” to MP3 search results, purportedly hosted on third party sites, available for free download.

Rights owners have typically been excluded from any revenue from ads sold around these search results, meaning that MP3 search represents the single greatest villain in the Chinese internet music space.

As populariser of this format - and with roughly 80% of the Chinese search market - Baidu.com played the role of public enemy number one until it’s 2011 deal with the majors saw the (then) big four’s catalogues made available legally through Baidu’s Ting streaming service (now rolled into “Baidu Music”). The deal also saw the majors drop any existing actions against the search giant.

Yesterday saw a similar - if not much smaller - result coming out of Beijing’s High People’s Court

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6China Music Industry, China Digital Music, Staff Blog, Ed Peto, Medium, China,

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

The 90% physical piracy rate obviously puts the kibosh on your average high street retailer. FAB, the only significant legal high street chain is really out there on its own. One large distributor lists only 86 other stand-alone legitimate stores stocking independent content, servicing the whole of China - A worrying figure in a country where you literally can’t move for audio-visual outlets and CD/DVD street hawkers. None of your HMVs, or your Virgin Megastores have dared set foot over here yet.

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.

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6Published, Staff Blog, Project Blog, Ed Peto, Large, Access China Report, China Market Entry, Retail, Physical Distribution, China, UKTI, British Underground, Client Work, China Physical,

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

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.

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6Published, Staff Blog, Project Blog, Large, China Music Industry, China Market Entry, Record Labels, Modern Sky, Universal Music, Physical Licensing, Access China Report, Ed Peto, UKTI, British Underground, China, Client Work,

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

Every man and his dog is looking to China as the ‘next big thing’, but should the western music industry executive also be packing Fido into air freight and de-camping to the Middle Kingdom? Before anyone considers investing energy in China, it is important to be aware of just how different the industry is over here. There are some genuine areas of opportunity but let’s start with the grim facts:

• Physical piracy runs at around 90%.
• The average gig ticket is £3 and charging anything over £7 for a concert will alienate the young Chinese music crowd.
• Publishing is a foreign idea to the Chinese and is therefore a tiny, unpredictable source of income.
• All media is government owned or heavily government monitored and, in most cases, requires ‘financial incentives’ in return for coverage.
• Despite a population of 1.3 billion people, the legitimate physical music market was only worth US$86million in 2006, making it the 20th biggest in world.
• All foreign companies must enter a joint venture in order to set up shop in China, handing over at least 51% of their company in the process.
• All music has to go through lengthy and seemingly arbitrary government censorship procedures.
• China is a black hole of statistics, quite often by design, making market research and due diligence incredibly difficult.

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6Staff Blog, Published, Project Blog, China Music Industry, Large, Access China Report, China Market Entry, UKTI, British Underground, China, Client Work,