MAGAZINE

PoliTalk48 : salon 3
// hosted by Paul Hoffert / Sep 10, 2009

PoliTalk48 salon 3 features Archie Hamilton (Split Works), Mandar Thakur (formerly of Soundbuzz for India), Eric Garland (BigChampagne.com), Helen Sildna (Tallinn Music Week in Estonia), and Eric Priest (intellectual property lawyer) on the topic of The Real Deal with Emerging Markets. PoliTalk48 is an interactive salon on music and entertainment industry issues moderated by Paul Hoffert, Media Professor at York University and Chair of The Bell Broadcast and New Media Fund. Each of the panellists has 48 hours to comment and interact with other panelists’ comments. Join us in person to explore this particular theme further at transmission.TALKS 2009.

// salon 3 panelists

Archie Hamilton is the Founder of Split Works, a China based promoter and brand agency. Developing Asian touring networks for hard working bands and alternative communication strategies for forward thinking brands.

Mandar Thakur, formerly GM of Soundbuzz for India (Asia’s largest online and mobile music distributor), is currently pondering over the next venture and living at the moment in Bombay, India.

Eric Garland is the founder and CEO of BigChampagne.com, a measurement company focused on tracking the popularity of entertainment media online and off. Eric has lived in Mexico and Texas and has finally made it as far West as California, where he lives with his wife and twin toddlers. WIRED magazine says “he spent much of his twenties dashing through airports and hotel restaurants telling people how to run their businesses.” Eric is spending his thirties the same way.

Helen Sildna is the founder of the Kumu ÖÖ festival, Tallinn Music Week in Estonia and a promoter with Baltic Development Group (BDG). She has strong contacts on the other side of the Baltic Sea, as BDG works with Live Nation’s offices in Sweden and Finland to bring major international talent to Estonia, Latvia and Lithuania.

Eric Priest is a platinum-selling songwriter, the former head of Noank Media's digital content business in China, and an intellectual property lawyer with broad China experience. He is an expert in Chinese intellectual property and the Chinese entertainment industry, and has been quoted on those subjects in the Wall Street Journal and other major publications. Eric currently teaches law at the University of Oregon.

// the real deal with emerging markets

Emerging markets, led by the BRIC countries (Brazil, Russia, India, and China) and closely followed by their South American, European, South Asian, and Pacific Rim neighbors are target markets for tomorrow’s business and profits. The question is “how far in the future are the profits?” Previous TRANSMISSION events suggest that three years to profit is optimistic and ten years may be too conservative. Many analysts believe there will be a (series of) tipping point(s) or perhaps a black swan event that will bring explosive revenue growth from these emerging markets sooner rather than later.

// here’s what our panel has to say:

Poli: What are the local business and regulatory environments? Are they different from the developed world?

Mandar: Radically different from the developed world. Whether the business structures are right or wrong is a point of view, apart from bureaucracies and corruption, Developing markets have a larger layer of red tape [music and movies]… have recently been granted ‘industry’status by their respective government ministries. Rules are new and importantly from a business point of view - business models and stakeholder structures are different. Some of these have been started from scratch whilst some of these have been thought through to suit the local country needs. Some of them deal with piracy far more effectively.

Archie: Let me take you through what we need to do to get a Western band into China. First, there is a paucity of infrastructure. Beijing, a city of nearly 20m people has one live venue of over 1,000 capacity. 2 venues of 500 (neither of which have the proper performance licenses – i.e. grey) and there are a couple of venues of around 100 capacity. Media is tightly controlled as a key strategic industry, and it is difficult to get anything covered by mainstream Chinese press without paying exorbitant amounts.

The licensing process for a Western show takes a month (if your venue actually has a license that allows you to apply) and the promoter has to provide video of the entire set, a set list, lyrics for all the songs translated into Chinese. Is that different enough for you?

Eric P: Prevalent market protectionism and censorship in China have led to a web of complicated, often maddening rules limiting how foreign media companies can operate. In many cases, foreign media companies cannot operate on their own; they have to set up a joint venture majority-Chinese-owned. Foreign-Chinese JVs often do not fare too well in China. [The culture and regulations are just too different.]

It is much easier for wholly-Chinese companies to operate in the marketplace. They are still ostensibly subject to censorship, state licensing and other regulations, but in practice they know that as long as they steer clear of politically sensitive hot-button controversies… no one will pay much attention, especially if they are just dealing in music. They always live under the shadow, knowing that if they aren’t properly licensed or are distributing unapproved content, some government entity could choose to hassle them or shut them down. That happens more frequently to video-related businesses; music is pretty far down the watchlist as far as ideological influence is concerned.

China was recently found by the WTO to be in violation of its duty to ensure foreign companies have open access to China’s media market and distribution channels. Beijing is planning to appeal the ruling. In the meantime, China’s Ministry of Culture just released new regulations, as it seems to every few years, requiring Ministry of Culture approval of any music broadcast online and requiring online music companies to be licensed by the ministry. So it looks like business as usual for the time being. Time will tell to what extent online music companies choose to comply with the MoC (or to what extent China chooses to comply with the WTO ruling!).

Helen: Again — we come from a regime where pop culture was seen as evil and at most cases prohibited. When the first notorious Rock Summer festival took place in Estonia in 1987 — it was a clear sign that the soviet empire was already cracking up from every corner. In 1989 the Berlin Wall came down. This is all fantastic but there is a strange paradox – even though our countries immediately went along with liberal democracy and liberal economy — the structure of supporting music industry and furthermore — the way it is seen by public sector — is still shockingly [Soviet]. Pop culture still hasn’t quite fought its way to be supported.

To give you an example — in most of European countries VAT on concert tickets (as well as other culture events) is with a lower rate than other services. Here government still believes we are all making too much money whereas we are all fighting hard not to lose money. BUT… with our economies in downfall at the moment, I have to say we are now pushing through significant shifts in mentality — creative industries and culture export are now the hottest topic. We are finally looking at pop culture, rock music and music industry as something that our governments need to start supporting in ways it has been done let’s say in Scandinavia. We are currently living the times of big and important changes, so we are trying hard to keep a dialogue going with our public sector and for the first time we are being listened to as well.

Eric G: … the Wild West is a misnomer when it comes to music worldwide.

Poli: How do the expectations of music consumers in these markets differ from those of North Americans and Western Europeans?

Mandar: They differ radically — in some cases almost like… black and white — from a musical choice point of view. Primarily a lot of these regions (especially India) has its own cultural legacy which dates far beyond the U.S. or some of Europe and hence local choices and musical tastes are radically different for mass consumers.

Helen: …When talking about Eastern Europe and also the post-Sovietblock, we are talking about totally different countries, which all have completely different tastes, preferences, media market, habits of consuming music etc. But for us…, we have something in common — it was prohibited and illegal to consume western music during Soviet times. There are unbelievable stories of music lovers having their relatives in Canada sending them Bob Dylan and Rolling Stones records — which were then of course handed over from friends to friends for copies — or then — those who had some secret access to the “illegal” music were organizing “music listening parties” at their homes with people just sitting next to tape recorders and listening to these in solemn silence. In that sense — I would say that our biggest problem is not illegal downloads or piracy — our biggest problem is low levels of music knowledge and plain lack of interest. Kids at that time did not grow up with music — so they did not develop a need for it.

So — I would say — [music consumers] DON’T have expectations at all. In this environment, where… music journalism being made on half of a page of a weekly newspaper, If you are a clever enough promoter to market your shows, you can create stars locally by putting on a massive marketing and PR campaign, bringing an act to the market and making it a superstar. [But an artist] with rich history suddenly loses it over here as there was a time period that was simply stolen from us. Let me give you an example — let’s say 1 person got hold of a Velvet Underground record when it came out… Now Lou Reed comes here and sells 900 tickets. At the same time anything that is a new, hip and cool marketing product can be hyped into a super. Gotan Project who just had one record [when] we promoted them here sells 1800 rickets.

Archie: … In China, music is pop [and] Celebrity drives mainstream music culture. The market is concentrated wholly on the 25 or so stars who currently claim the lion’s share of radio time, TV appearances and ensuing endorsements (the main financial heartland of the Chinese music industry). Wang Lee Hom, possibly the hottest star in China has been/is spokesman/representative for at least 15 brands, from water to cars to mobile phones. In recent years, the ubiquitous low–rent gossip driven magazines have sprung up in alarming quantities.

Alternative music (i.e. anything non-pop) cannot even be classed as an industry at present… For example, I am sitting in a van with the Canadian 2 piece [band] Handsome Furs, on the way from Beijing to Tianjin to play a show tonight. In the van, we have Lex and Dan (the Handsome Furs), myself, my production manager, an assistant (merch, runner etc) a Western audio engineer who has brought a small console for the front of house (because the system in the club will be atrocious), and Sulumi, a Beijing based noise artist (who is the support act). We are hoping that we will sell enough tickets tonight to pay for the van (US $150 both ways) and for Sulumi (US $150). Around 70 tickets. To put that into context, PK14 (one of the most celebrated “non–pop’ bands in China went to Tianjin last weekend and sold 70 tickets. Lydia (our runner) reckons we will only sell 35 tickets at US $6 each, a total gross of US $210.

Eric P: … Chinese consumers by and large expect music to be free. While cynics will claim that’s no different from the West today I can tell you there is a difference. iTunes still sells over a billion downloads per year [in the West] despite the prevalence of P2P downloading while the online music retail model in China has already failed. Major US companies… have invested in Chinese services that provide free, unlicensed streams or downloads, because they know that is the only [consumer choice at present].

Musically, the average consumer doesn’t expect much beyond pop fluff… Rock is still way behind and less accepted in the mainstream. That said, when an artist does come on the market with some substance, that does seem to garner due appreciation by Chinese fans. Wang Fei, a huge 80s–90s pop star who had some depth and good quality songs, was generally recognized as being the best of the best in Chinese pop.

Eric G: [If the question was] “How are expectations the same?” Our answers would be shorter! … the proportion of music consumers in emerging markets who expect recorded music to be completely free, and who are comfortable participating in pirate markets online and off, is higher (by the numbers). The traditional (per unit) recorded music businesses in North America and Western Europe, though depressed, will not be matched elsewhere.

Poli: Are the top 10, top 40, and top 100 English titles in these markets the same as in North America and Europe? What percentage of music is consumed in English and how much in local language(s)? Does it matter if locals understand English lyrics and, if not, should western music be re-recorded with local language lyrics? Avril Lavigne made a huge dent in international markets by recording her albums in many language versions including Chinese.

Eric G: …by the numbers, no. Music is most often a regional (even local) phenomenon the world round. This is pointedly true of many of the emerging markets we are specifically addressing here, but increasingly true everywhere. In other words, as traditional broadcast media lose relative mindshare (as they are in most places), the homogenous culture that they tend to promote is undermined by more eclectic tastes. Michael Jackson sold many tens of millions of records (there is still a great deal of argument about how many tens of millions) worldwide. There will never be another artist who will match that feat.

There is a substantial preference for local and regional music in most places in the world. The English language seems less likely to be the barrier than cultural relevancy. To put this another way, most people seem to relate more easily to artists whose own experience, references, and ultimately…identity are a bit closer to home. The Avril song seemed more like a novelty than a precedent set, imho [in my humble opinion].

Eric P: … Popularity in the West influences which Western titles are popular… but the exposure for most Western songs still represents… a relatively small percentage of overall music consumption in China. The great majority of music consumed is Chinese-language, from Mainland China, Taiwan, and Hong Kong. Re-recording with Chinese lyrics would certainly help an artist set her or himself apart in the marketplace and gain some recognition and appreciation. But I don’t think language barrier is the biggest obstacle. I think Chinese people just like Chinese artists, whose lyrics, looks, musical stylings, etc. are familiar and speak more to the Chinese experience.

Avril certainly has name recognition in China, and her Mandarin song did well but did not crack the top 100 ringtones… it came nowhere near the ringtone sales of the biggest Chinese artists.

Archie: In the absence of a true recorded music industry, caller ring back tones are one of the only ways to truly understand the extent of Mandarin language domination amongst Chinese consumers. According to research done by R2G (owner and operator of the best digital music shop in China www.wa3.cn ), there wasn’t a single English language track in the top 50 most downloaded CRBTs in 2008. Xie Jun achieved top spot with 14.5m downloads. Number 50 was Shi Yan with 1.5m. Contrast this with the highest placed English language band, “My Hump” by the Black Eyed Peas clocked in at a non-eyewatering 60k downloads in 2008. There are separate charts for English and Chinese top 10’s, top 20’s, but the CRBTs best illustrates the obstacles faced by English language music.

It takes an outsider years to master the tonal Chinese language, and there have been examples of Western born Chinese and even Westerners with excellent Chinese coming here to try and break the marketing in Mandarin. I haven’t really seen it working yet, and foreign artists learning phrases often fail to get the tonal elements of the language. Honestly, don’t even bother. There have been a few instances of western singers or bands doing English-language translated cover versions of Mandarin pop songs and or duets with the original singers which have had some appeal.

Mandar: In most cases they’re not [the same], at least for India. To give you an example: International music is 1.5 % of digital sales and at best 4–5 % of physical sales. This has been the case for the last few years. International music is 1.5 % of digital sales and at best 4–5 % of physical sales. This has been the case for the last few years. [But] Western Music is probably consumed more widely than the above sales percentages due to internet downloads and free radio stations.

However, a western artist recording their music in local language — that will differ region to region and country to country — for example — Avril Lavigne’s local language CD might have been a hit in China but will probably do lesser sales in Hindi language than her English CD in a market like India. That is because India is (by population) I think one of the top 2–3 English speaking regions in the world where English basics are understood widely apart from a China whose largest drawbacks is English language penetration.

Helen: … The system of charting here is completely random- every record shop and every radio station has their own charts — and you can see each of them differ quite a lot. If you are a promoter and want to estimate your ticket sales by checking how the album has sold, it will never take you anywhere — I mean if new album of Metallica has sold let’s say 700 copies, it still doesn’t mean that the live show couldn’t sell 70,000 tickets. What I am trying to say - people are not so much dedicated fans here as they don’t have the history for it — but they are much [more inclined] to follow a massive media campaign and a well crafted hype, and — living in a small country like Estonia with population of 1.3 million — it is I guess a million times easier to create a national hype than in China.

… Tiny countries that we are, we ALL speak different languages. So – being a local band, you won’t have much of a chance to go tour in neighbouring countries and sing in your mother tongue. We are all very much used to consuming music in English, but this brings about an interesting aspect – our audiences don’t pay that much attention to lyrics – I mean if you have Morrissey playing here – only a few die-hard fans will sing along. So yes – all the bands who want to do something abroad, have a dilemma – they know they need to be singing in English and they need to be singing in clever English. That having said, we all hope we’ll be able to sustain our beautiful mother tongue that, of course is best preserved through literature, poems, lyrics, songs…

Poli: Do we need to adapt our business strategies to the different cultural environments or can we repurpose first world techniques locally? This is a different way of asking whether globalization can thrive in the 21st century or whether it needs to be replaced by localization.

Archie: International companies have tried since the turn of the century to graft their Western industry practices onto the Chinese market. Millions of $$s later they are no further forward. The industry in China at least needs to be understood and adapted incrementally. The problem we face as non–Asians in Asia is that the Chinese particularly are very, very nationalistic about the music they listen to.

In the 4 years I’ve been doing this, my attitude has changed beyond all recognition. The culturally imperialistic overview that I had of the market (that China needed Western music) has softened. I still believe there is a big place for English language music, but the transition will be more gradual, and most importantly incremental. We are now bringing bands that our research shows us the Asians will like rather than bands that we think they should like and we are working hard with the local music industry to understand and help develop it. And the kicker – we are finally beginning to make a little bit of money. Not enough to survive just yet, but a little…

Eric P: You definitely have to localize in China, at least for the foreseeable future. If you don’t intimately understand the music and general culture there or the regulatory environment, you’d be well advised not to bother doing business there. You also have to have far different expectations and definitions of success for that market compared with Western markets.

Mandar: … The world IS far more localized… “Global thought with Local approach and practices” is the key here. Some of the western “Globalbest practices techniques” are and should be locally adapted but other business models should NOT follow the west as these have been locally developed to suit the local environment. For example, the music industry in the West is suffering from massive cost issues and structures and everyone taking a percentage whereas the music industry in places like India and other BRIC nations [can] end up faring better…

Eric G: In the realm of recorded music, I find myself increasingly promoting localization. In short, these markets are so specific as to be almost unrelated, and therefore must be respected and approached individually. This is not so much a comment on the West versus the East as it is a broad observation about the peculiarities of local markets. I remember being struck by the vast differences among Western music markets: the USA versus the UK or France or Germany…

Helen: To be able to do anything at all in the area of music here you really need to localize. Absolutely no way around it. Something that works in Finland (60km from us!) does not have to work in Estonia at all and something that works in Latvia (we share a border!) might be an immediate flop in Estonia. If you are not local, you will not get it, well… even we dont get it sometimes, but… there’s a bigger chance let’s say.

Poli: Is there an infrastructure of artist and content development as well as production capacity locally or do the incumbent majors and indies have a role to play in artist development and/or production?

Archie: At the moment, there exists a pretty cozy cartel of “Entertainment Companies” in China. These Entertainment companies have effectively been running the 360 degree model for many years – management, label, touring, endorsements, appearences, TV, they manage and control (and make money) from it all. They have fairly standardized and homogenous business models. Get your good looking young pup on music by hook or by crook. TV show, film extra or reality TV (American Idol style reality TV has become huge in the last 3 years here in China (the last final got XX number SMS votes). Young pup gets some fame, record company/management get them into the studio, record, and try and get them back on TV. Endorsements and appearances, plus the ubiquitous gala performances for the major TV networks follow and so the cycle goes. This has been the case for over 10 years.

Avex Japan is a good example of a company that is trying to take a piece of the music market the old fashioned way. They rely 100% on a production partner in Taiwan that gets their artists on TV there. If they succeed, the content will filter across the straits of Taiwan to the mainland video sharing sites. Once they get traction, then the mainland TV channels on the fringes will pick it up (cable, regional). Eventually, with luck, the holy grail of Beijing’s CCTV and Shanghai’s SMG will start to import and expose, and the golden goose will start laying.

In terms of Western companies, the majors have all been at it for a while, but they work almost exclusively with Mandarin artists along these lines. Huge holes exist for genuine artist development and production and this is being led by a handful of small Chinese and Western companies. We are an example of one of these.

Eric P: I think “development” is a pretty strong word here. I’ll give you an example. One medium sized Chinese label in Beijing has about 150 artists signed to it. All are pop solo artists, and all were contestants on a pop idol contest show. If you make it in the top 50, you are automatically signed to this label. Where you sit and never do anything, unless you happen to be the two or three who did very well on the show or gained some notoriety on the show. So the model is, lock in everyone, and then actually produce and release songs for two or three who are already somewhat famous, and ride their momentary fame while you can. (Actually on review it doesn’t sound all that different from the state of the majors in the West, huh…).

The quality of local music production quality is quite lagging, and I know many Chinese labels would love to have help and partnerships with Western entities in this regard. I think the majors play a role in shaping production and development, especially in Taiwan for Taiwanese artists. They have very little budget in China, because they earn so little.

Eric G: Is it too cynical for me to answer this question with a question? (There, I just did!) I wonder if recorded music sales in many of these markets will ever sufficiently support artist development and (presumably more costly) production. The costs of production (recording, mixing, mastering, distribution) are plummeting. I have worked with bands whose major label output was created for a few thousand dollars in real costs (and then a few million more in marketing…).

Poli: 360 deals are new on the block in North America. Is it true that they have been the norm in emerging markets?

Helen: in the Baltics all the majors have had distributors but no actual offices, except for EMI in Latvia and now Universal in Estonia. If the majors had moved in with their actual offices years ago, it might be a different situation, but now — ye 360 model IS a norm here — I would not call it a “deal” but we can say that many and most of the bands who in fact release their records themselves, also cover all these areas of business for themselves — as good as they can. This now gives our bands an interesting starting point at these new times that music industry is going through — none of them have binding contracts that they couldn’t get out of and most of them are more ready to actually work with their careers — they know they have only themselves to count on, which I’d say is a good starting point at the moment.

Mandar: This has been the record industry’s biggest problem — 360. Without understanding the real need of restructuring the record industry to adapt to today’s times — they’ve blindly decided that it will hog everything and eat up everyone’s share and hence some idiot coining the term “360”. In the emerging markets (which have far larger habits of multitasking due to the economic situations of consumers) these been a reality for a while now…

Eric P: Yes, I think 360 deals are the only way Chinese record companies have been able to develop and survive.

Archie: This for me illustrates the problems that are facing us. Tianjin is a city of around 6,000,000, located just 90 minutes from China’s capital, Beijing. An international band like the Handsome Furs (the singer is also in Wolf Parade and the band are on seminal label Sub Pop), but in China they appeal to a tiny, tiny minority and outside of the main cities, virtually no–one. And so we are faced with a dilemma — go to the market and try and make money from other things, or wait on the sidelines (as most people are doing) and hope the market comes to us eventually.

Eric G: Given the scarce revenues from recorded music, bundled rights will have to be the norm.

Poli: In some emerging markets (China?) songs are the currency of popularity and artist recognition is not so important. In others (India?) local artists drive popularity. Do you agree? The answer has consequence for whether music publishers or record companies might dominate the local business.

Mandar: I agree partly. In India the situation comes from the fact that the local Hindi Film Industry — Bollywood — dominates music. Every film is a musical and hence 70% of music recorded is from films. I can foresee that in the near future, songs will play a more critical role.

Archie: In China both it is relatively clear that both the songs and the artist are important. The song creates the popularity of the singer and not vice–versa. However, the fame that results from one hit song may propel a singer to such stardom that results in the aforementioned endorsement opportunities and further potential TV and film roles. In these cases, the celebrity may sometimes eclipse the songs and go off in different directions. There are certain stars whose celebrity is essentially untouchable no matter what the quality of their musical output actually is.

Eric P: Based on my own casual observation, I think artists are the currency of popularity. Chinese people are big on brand recognition — I don’t just mean designer brands, but brands as a proxy for all sorts of information including quality, and artists, especially today, are a brand. I don’t think the song is as important as the artist, though like anywhere, a great song can make an artist. Phenomenally popular songs also take on a life of their own, and may quickly be recorded by several artists looking to ride the wave. Like anywhere, you can also have popular songs by relatively unknown artists (everyone knows Come on Eileen, but who remembers Dexy’s Midnight Runners?). But I think big–name artists are bigger than the big songs.

Eric G: Not to quibble with the term, but I do think the answer to this question depends on what you mean by “popularity.” Generally, songs command more awareness, more intuitive recognition, than artists — at least initially. The song is the introduction to the artist, in a sense. In any healthy music market, the conversion rate (the conversion of the popularity of a song or songs into recognition and appreciation of an artist) is relatively high. Too often, however, popular (or “pop”) songs remain just that. Awareness and appreciation of artists remain low. The economic value of career artists is very high. The economic value of a jingle or popular song has never been lower.

Helen: Every country’s tendencies are led by actual tools that they have available. Consumer behaviour develops around it — believe it or not — we do not even have iTunes available here and we don’t have specialist music newspapers or magazines — so knowledge about music comes still from weekly album reviews and stories around artists/stars/celebrities etc. It is easier to sell music if the artist is well–presentable: good promo pictures, some gossip stories in yellow press etc. So — I’d say people over here need a face to link to the song.

Our music markets at this point are greatly led by the live industry — as the way to promote live concert is through artist promo then this is the way. Also live shows have a very direct influence on album sales. You would not believe it, but it can happen that an UK electronica band the Cinematic Orchestra might be nr. 1 sales article in the main record shop for a week after the show. Why? Live promoters are currently the ones that actually “promote” artists.

Poli: How does the infrastructure and revenue potential for live concerts compare with North America and Western Europe?

Mandar: From an India perspective — the infrastructure for live concerts does not compare much to North America and Western Europe. From a revenue potential — given economic reality, ticket prices need to be and are low, hence the business model is sponsorship through and through, at least for now.

Eric P: I’ll let Archie answer this.

Archie: We have touched on infrastructure already – there are clearly opportunities for development of infrastructure, although the current danger in China is that the development outpaces the actual need. We have AEG who have come into China very strongly within the last year really with development of a large number of venues in Beijing and Shanghai and plans for cities across the country. The question is if there are actually enough viable money–generating shows to put into these venues. Chinese artists will certainly take to the road and there is already the history of money–making tours of upwards of 10 cities for a number of the top pop artists from both the Mainland and Taiwan and Hong Kong, who can fill 10–30,000 capacity stadia, often at high prices. For top international artists, the market is much less developed, with tours typically only hitting Beijing and Shanghai. The sole international arena tour was Avril Lavigne in 2008. She visited 6 cities, and while brave, it was most probably too early and the tour must have lost many 100’s of thousands of dollars. In Shanghai, she played the 60,000 capacity Shanghai stadium and sold under 10,000 tickets. There is opportunity at the other end of the spectrum, and artists are coming through the country regularly, although covering (frugal) costs is the most that can be expected at present. This development will be vital for the future of Western music in Asia.

Helen: I think our new generation is really ready to do a major digital jump — all we need is a massively and well–promoted digital music shop to enter the market that would be easy to use and inexpensive, and it would change everything around. After all, we are the country that is brain–power behind a brand like SKYPE, we are also a country where 90% of population uses internet banking on daily basis and a country where this summer 70, 000 Madonna tickets where only sold online even though it was never tried out before – so there is definitely loads of space for innovation and new ways of doing things, and this is what us – the new generation is in fact attempting to do.

Eric G: Infrastructure: no comparison. Most emerging markets don’t compete. Revenue potential: I don’t think it meaningfully compares, in most emerging markets. The economics of live are going to have to be reworked radically in order to realize an opportunity here.

Mandar: I’d like to get back to the original theme. How long does it take: to break an act and/or to break even in your music business… especially considering that most companies these days live quarter to quarter?

Archie: From a personal perspective, I came here with a 10 year plan. Nearly 5 years in, I feel that to do what I set out to will take a minimum of another 10 years. What is our ultimate goal? It isn’t really set, but I am hoping to help in setting the foundations for a vibrant and enduring Chinese music business, and of course I would like to achieve financial independence to be able to continue working in China, or to take on other projects that… will focus on making the world a better place to live.

As I alluded to in another part of the conversation, I’m not convinced that there are many spaces for foreign companies to really succeed here, but that isn’t to say that a few really innovative and smart companies and individuals won’t succeed and/or make money from China. There is certainly a place for Western Music in China in the long term, and so there will be places for "cultural bridges" between the Western and Chinese industries.

But the main reason for the [long market development] is it takes a lifetime to understand China. I look at 10+ year veterans like my (bilingual) American partner, and I see that he is only just beginning to truly understand how the country works. Yes, you can take on local partners, and sometimes it works (the car industry being a great example) but too often it doesn’t. Google, facebook and MySpace’s ongoing struggles are testament to this. In summary, it is perhaps better to look at this, not from a perspective of time, but from a perspective of investment.

I believe that successful (non-Chinese) companies/individuals in China will have to make a huge investment in the country to succeed. Either from a financial perspective, or from a time, intellect and effort perspective. You can try to buy success by coming in, hiring the best people/agents and building the best infrastructure, or you can take the time to live in and understand China. As a band, you also need to decide to make the investment.

Mandar: I can’t but help agree with Archie that ultimately the ability to crack emerging markets… will depend on ‘staying power’ (read as ‘ivestment’) in both money and time and over a few years!

Original illustration by Dushan Milic, a Canadian illustrator (frequent contributor to the Globe & Mail) currently making his home in Amsterdam. www.dushanmilic.com.

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