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

Publishing is a tricky concept in China. The typical Chinese approach to intellectual property is that ‘ideas belong to everyone’, so while it is difficult to make money out of something tangible like a record or a download, it is VERY difficult to make anything from the intellectual property contained within it. The Copyright Act was only passed in China in 1991, so it is still early days.

The Mechanical Copyright Society of China (MCSC) was set up in 1992 as the sole administrator for composition but it’s effectiveness is often brought into question by the publishers. In the last few years, the majors have taken it upon themselves to either do their own collection or find independents to take it on for them.

While the MCSC claims that they maintain a good flow of revenue back to the western rights owners, there is no mechanical collection agreement in place between MCSC and, say, the MCPS in the UK.

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6Published, Staff Blog, Ed Peto, Access China Report, UKTI, Project Blog, British Underground, China Digital Music, China Publishing, Large, China, Client Work,

There’s nothing worse than hyping things up too early. While Billboard magazine saw fit to call Beijing one of the top 5 cities to watch for music in 2007, regular gig-goers here are slightly less sanguine on the subject. This place has a long, long way to go before it can be compared to even the second tier cities in most other developed countries in terms of originality and depth of talent. As a rule, most bands are highly derivative as well as technically suspect, making the three chord mock-anger and incompetence-drowning feedback of punk music the weapons of choice.

That’s not to say that there isn’t a certain buzz in the air though. While there has never been a shortage of fan favourites like Brain Failure, New Pants and the now defunct Hang On The Box, there seems to be a certain knowing assurance in the current rising stars where there was only amateurish exuberance before. Bands like Rebuilding The Rights Of Statues (Re-TROS) and Lonely China Day, both of whom toured the States recently to glowing reviews, are just…well…believable, and that is a very rare quality in this town. Here are the Re-TROS playing ‘If The Monkey Becomes (To Be) The King’ at Beijing’s 2 Kolegas club last night:

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6Staff Blog, China Music Scene, Ed Peto, China Live Music, Large, 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 live industry in China has real potential. The annual Midi Festival in Beijing shows that there is a sizeable live audience for western derived independent music, with a crowd of 20,000 moshing, flag-waving, ironic t-shirt wearing, squiffy-hairstyled rockers per day over four days. The international bands playing were unanimous in saying they “didn’t think this was possible in China”. Those same international bands also had to find their own money to make the trip as performance fees and flights were not provided, so ‘one step at a time’.

The big question is where do those 20,000 indie music fans (and people like them) go for the rest of the year?

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6Published, Ed Peto, Staff Blog, Large, Access China Report, UKTI, British Underground, Project Blog, China Live Music, Midi, Split Works, China Market Entry, China, Client Work, China Festivals,

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

Digital is the hot topic in China. Due to the under-developed, pirate-dominated physical market and burgeoning mobile environment, China is on track to becoming the world’s testing ground for the digital age. The statistics are pretty staggering, with some suggesting a digital market of US$1.5billion by 2010 - With the second largest broadband network in the world, the advent of 3G later in 2007, 460 million mobile users and five million new mobile subscribers a month, who, on face value, would doubt them?

The view from the ground, however, is that all of these statistics need to be taken with a bucket of salt. All attempts by the Chinese government to combat online MP3 piracy, including all public ‘victories’ against pirates, should be seen as totally superficial - a lip service to the lobbying western majors. Internet MP3 piracy remains endemic, with less than 10% (a very generous estimate) of downloaders actually paying 14 pence/download for the privilege.

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6Published, Staff Blog, Project Blog, Ed Peto, Large, Access China Report, UKTI, British Underground, China Market Entry, China Digital Music, China MVAS, China, Client Work,

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,