MAGAZINE

transmitchina - shanghai day 1
// by Louise Upperton, photos by Tobyn Ross / Jun 3, 2010

The first day of the transmitCHINA conference began at 10:00 am today at the River South Arts Centre, a beautiful, raw space situated on the Bund in downtown Shanghai. Delegates arrived early for coffee and a chance to mingle before the presentations and round table discussions.

This year, transmitCHINA was favoured with the emcee skills of Nic Harcourt, Music and Culture Editor at Large for the LA Times. Harcourt served as Music Director for the highly acclaimed 'Morning Becomes Eclectic' program on KCRW in Los Angeles and is widely considered to be the ultimate musical tastemaker.

Shanghai based, Archie Hamilton, Managing Director of Splitworks, one of China's leading youth marketing and indie promotions companies, gave the official welcome and set the tone for the two-day conference. Hamilton's introduction emphasized that China is a long-term investment and business here can't be rushed. "No one – especially me – says that China is an easy place… after five years of living here and running a business here, I'm just beginning to understand a little bit about how this great country works," said Hamilton, also citing an article from The Economist. He used the example of Bacardi. The company has been operating in China significantly for about four years and finally went cash positive earlier this year. However, they were spending in excess of $50 million each year trying to get to that position.

Hamilton stressed that multi-national companies that come here with colonial practices and stacks of cash have to take the time to diligence. "You have to come here and understand what this place is, who the people are and how they do business," said Hamilton. "The scale of the task is enormous. China is a long-term project. It's a partnership. It requires give on both sides."

There are cultural, linguistic and habitual problems for Westerners, coupled with the Chinese government's protectionism of it's domestic industries. "Local companies have a real hunger to succeed and occasionally this leads to cries of foul play, but that's normal, and it exists anywhere in the world," said Hamilton. "There is huge growth in infrastructure, transparency and accountability. International companies are succeeding and it's exciting." Hamilton gave the example of the Midi Festival, which was the only festival in China four years ago when his company began operating. "Now, there is probably between 40 to 60 festivals this year across the whole country and some of them entertain upwards of 30,000 people… There's a lot of talent, there's a lot of people and there's a lot of potential."

Hamilton adds, "Consider that only a tiny fraction of the population have ever seen a live show… the production is low quality, and the artists aren't the best artists they can be. But there are at least 10 Beijing bands as well as bands from all over the rest of the country who are creating tribes, creating fans, creating fan bases… and it's happening incredibly quickly. That's not to say to that it's not hard. It is. But bands are beginning to see people making a future for themselves. As they do that, and as they set this example, more and more want-to-be bands flood into the market, more and more people get involved, more media, more investment…"

As Hamilton asserts, we have a long way to go, but it's not as far as everyone thinks. The motivation behind the next two days of keynote presentations and roundtable discussions is that music in China is no longer small. It's happening, and it's happening now.

The transmitCHINA conference program was introduced by Catherine Saxberg, Executive Director of the Canadian Music Publishers Association, followed by two highly informative presentations from Kaiser Kuo out of Beijing and Kevin LeFlar head Canada based Official Community.

Kaiser Kuo is a writer, rock musician, technology watcher and cultural commentator. He is a consultant for China's leading Internet video site, Youku.com and his presentation is called 'The Future of Chinese Digital Culture'. With his background, Kuo has made some observations on the digital ecosystem in China, which he says is inextricably intertwined with the music industry. "To understand the future of music in China, one has to have a very good grasp of how the digital economy here works."

He begins by pointing out that our almost exclusive focus on censorship has blinded us to the dynamism of China's Internet culture and digital ecosystem and that we fail to appreciate what is actually happening behind the 'Great Firewall' of China. Kuo cites Google's tussle with the Chinese government as an example of a topic that fell into this familiar narrative. "Internet censorship is a very salient feature of China's Internet landscape, but it is by no mean's the only feature, and when we see it only through that one lens we are really missing out on a lot," says Kuo, who argues that piracy has done more good than harm. "The world behind the great firewall, like the iron curtain 2.0, has made us believe in these very basic archetypes of the Chinese Internet user."

Kuo also explains that Internet in China is fully fledged. "There were 400 million Internet users at the end of Q1 in 2010. There are 1.75 million commercial Internet sites in China. It is an incredibly dynamic ecosystem and we really do ourselves a tremendous disservice if we don't take pains to understand it better," he says. "A paradox is at the heart of this: in the same couple of years where we've seen a significant tightening of the icy hand of the Internet censor, we have also seen an incredible flourishing of the public sphere on the Internet in China. it is both more tightly controlled and more politically potent than ever before."

Kuo attests that the Internet in China is full of critical discussion on all matter of subjects. "Rarely a week goes by when we don't see policy makers at some level changing their minds in direct response to Internet public opinion. This may be more participatory, it may be more inclusive now – it's certainly no substitute for some more institutional democratic mechanisms – but we need to acknowledge that this is actually happening and, believe it or not, music actually fits in to this whole thing," Kuo affirms.

His other key point on Chinese Internet culture is that it is diverging from it's Anglophone counterpart. In terms of services that are on offer, there are superficial similarities that shouldn't be ignored (search engine systems, social network systems and micro-blogs) but Kuo claims that the actual content is significantly different. He uses the example of the BBS (bulletin board system) to point out a major feature of the Chinese Internet landscape that has no parallel in the West. "The BBS, a relic from the American Internet scene from the mid-1990s, is a source of current vibrancy here that North Americans tend not to be able to wrap their heads around. These are not the basic threaded conversations that we saw back in the 90s. This is where conversations are actually happening. Eighty percent of commercial Internet sites in China have a BBS attached to it."

Kuo also argues that we are living in increasingly isolated cultural spheres and music plays a less identity-forming role in Chinese youth culture, and therefore, there is a lack of association between music and artist. It's caller ringback themes that bring in the highest digital income in China. "In China, it is not musical consumption as we know it," Kuo says. "There is a poverty of musical culture in China. It's an uphill battle." He adds that eighty percent of all venture capital in China comes from the United States. He touches upon the 'copy-to-China' model of Facebook that exists. "China is not, and will not be, a source of disruptive digital innovation… it's all low-hanging fruit and no one is reaching for the higher branches yet."

Next up is Kevin Leflar, the Founder, President and CEO of officialCOMMUNITY. officialCOMMUNITY is a leader in online community commercialization for established recording artists and their brands. This company extends artist brands online by creating and managing autonomous but integrated online businesses centred on the artist's loyal community.

Leflar has become one of Canada's best-known authorities on the impact of digital technology on the music industry and his presentation centres around Copyleft and the idea that information wants to be free. He claims that the Internet is a hostile environment for rights holders and when it comes to next generation leadership, legislation is not going to be the answer. In his presentation, Leflar makes the bold statement, "Content isn't king, conversation is king."

Following the presentations, delegates broke out into smaller groups for the first roundtable session. The theme was 'Opportunities and Challenges between the West and China'. The discussion focused on the unique characteristics of China and the barriers that have led to failures of Western businesses in the market: the expectations of music consumers; the impact of the Chinese regulatory environment on the local record business; localized versus globalized sales strategies; language; patience that is required in the market; Internet and mobile culture; and the infrastructure and revenue potential for live concerts.

In a recap of the roundtable discussions, one of the main topics that emerged was branding – the opportunities in working with brands as well as the inherent challenges that accompany these types of relationships between artists and brands. It was noted that money from brand partnerships in China doesn't always make it down to the creator, it often gets tied up with event organizers. There is a sophistication in the West that provides a filter for artists – like managers and booking agents – and these gatekeepers don't exist in China so it often comes across as blatant advertising.

In terms of independent artists, the notion that they are doing something subversive does not really exist, or it's not generally the intention. In terms of art and commerce, even for an independent musician, there is never really a debate on why they would want to be associated with a corporate identity. In China, artists tend to aspire to this and being associated with a brand helps with their credibility and will certainly help their career.

Another topic that was briefly touched upon was China's 'Soft Power Initiative', which is basically the idea of China expanding its use of cultural, educational, and diplomatic tools to increase its appeal around the world. When it comes to music, the Chinese government is actually trying to get the word out there through western channels and there is more of an opportunity now for independent artists to reach a wider audience.

A basic insight that emerged on the subject of doing business in China was that contrary to the way business is done in the West, contracts with Chinese partners are more or less a formality or the starting point of a relationship – the negotiations start afterwards. This highlighted the importance of 'Guanxi,' or relationship-building in Asia.

One of the main challenges discussed at the roundtables was the difficulty in developing and supporting original Chinese music. Both Chinese and Western delegates agreed: the standard of Chinese independent music is much lower and therefore less likely to be export-ready, and Western music is still very much a niche market in China.

Emerging from the first roundtable discussions was a unanimous feeling that copyright and monetization issues won't be solved overnight. The focus needs to be on music discovery and cross-pollination between China and the West. In order to further develop the Chinese market, the West would need to offer more inroads, such as Western producers coming over to work with local independent artists and bands. Greater promotion of Chinese artists in the West and tapping into Chinese communities in the West will be key. Looking forward to 2011, bands need to work together and help each other. Collaboration is organic and inherent in the music scene all around the world, but mentorship for Chinese artists and bands will help build a stronger independent music scene in China. If there was one great success story for China in the West, it would truly instigate change.

Following lunch, delegates reconvene for a feature artist interview by Nic Harcourt with Yang Haisong, the frontman of Beijing post-punk band P.K. 14 and one of the leading figures in Beijing's underground music scene. P.K. 14 were hailed by Time Magazine as one of "Asia's Best Bands" in 2008. Haisong explains that there are very few bands in China and there used to be labels only in Beijing. When they founded P.K. 14, they wanted to establish their own scene, develop their own strategy and build something that was their own. They became friends with fans and performed to new audiences in Beijing. Haisong says that at the time, even playing at different Beijing clubs was exposure. He claims the best time to be in music is now, because things are really changing. "China's music industry is still developing… ten years is a short period for China," he says. "The independent industry is very young. It's interesting and exciting. We are creating history for popular music in China."

Haisong talks about some of the challenges the music industry faces in China. Concert ticket prices are very low, but this must be maintained so more young people can participate. In the meantime, he says that Chinese Internet users don't buy albums – they download for free. While Haisong supports the sharing of information and agrees this is one of the benefits of the Internet, he says that rampant piracy is damaging. "So long as something is free, people will take it."

P.K. 14 has toured in the United States. Haisong adds, "U.S. fans are the most critical. They care least about music from outside the U.S. We are facing the biggest music market, but we are willing to go anywhere."

The difference in China is that the industry is still young. There are no rules, no laws and no principles. "How to do a festival? How to open a label? Do a tour?" he says. "There are no standards." When their label (Maybe Mars) started in China, they had decided they didn't want to wait to work with a major – they could start with the basics and do it themselves. "Bands are developing their own networks," Haisong says. "But very few bands have the opportunity to get support from an indie label. We need more indie labels."

Later in the afternoon, a second session of roundtable discussions focuses on the theme of intellectual property. It's an ongoing conversation as the West tries to articulate its position in terms of trying to do business in China. Although China has been identified as a market defined by copyright abuse, the issue is oversimplified. The feedback that emerges from this particular roundtable discussion is that our Western-style copyright regime is broken. Why would China want to adopt this model?

The alternate view is that the slate is clean for copyright in China. There is a system in place and artists are being paid by companies such as China Mobile, but things are falling into place more organically and China is figuring it out as it goes along. Subscription-based listening is the immediate future, but there are new models invented all the time. China may adopt some of the models that the West has to offer, but it does not need to adopt everything.

While the event's organizers were initially apprehensive about the effectiveness of the the roundtables in context of China's often challenging business culture, it's obvious now that it's working. TransmitNOW Executive Producer Tyl van Toorn ponders on the breakthrough. "The roundtables became our signature conference format we saw the impact it had on the dialogue amongst delegates in 2006 (the first Transmission conference held in Vancouver)." At that time, the format was immediately recognized amongst participants as a more effective platform for transparent, open dialogue. "What made it special at that time was an inherent need for honest dialogue, a space that removed the increased presence of 'panel posturing' and lame promotion of antiquated models and philosophies," he adds. "It is really hard to self-promote at a roundtable and it is even harder to just drop an obvious falsehood. This is even more contrasted when trying to connect two different business cultures," says van Toorn. "I get the sense that Westerners often say they want to understand how to do business in China but we are generally poor listeners when it gets down to it." This seems to be even more amplified when dealing with emerging markets. As we sign off for the night, van Toorn adds that this format seems to have leveled the playing field. "Roundtables ensure everyone gets a voice and we all know that the quietest person in the room tends to have some pretty bright things to say."

Later that evening, transmitCHINA delegates are whisked off to the delectable Sichuan Citizen for more spicy local cuisine. For those who manage to make it through dinner without the jet-lag setting in, it's off to see the live show (sponsored by the Province of British Columbia) at Dream Factory. Tonight Wil, The Racoons and Parlovr, along with Han Han's own band, Duck Fight Goose, will perform. It's the first day of the conference and delegates have already been on their feet since 8:00 this morning. At midnight, the last band hits the stage: The Racoons. All of the talent on this tour have proven to be export-ready, but The Racoons has clearly been a favourite with Chinese fans on this tour. This band has a serious buzz going on one of China's hottest social network sites. All this activity and positive feedback culminates into an agency deal for The Racoons for all of China. A great success story for the band and for transmitCHINA.

Everyone is enjoying the music tonight, but it's no business holiday – the evening will end at the last band. The roundtables earlier today were an eye-opener for everyone, so delegates are planning to come prepared tomorrow morning. If there is one lesson learned today, it is that the roundtables have proven that there is a effective way to connect Western industry leaders to their Chinese counterparts. Watching Chinese industry participants unabashedly dive in and challenge ideas and opinions was testament to the impact of this format. This made the conversation a sincere sharing of ideas and perspectives. Some would tell you that this is not a common approach in China. Directness is a uniquely western way of negotiation and arguably a fairly unsophisticated tool by Chinese standards when it comes to the art of negotiation.

As everyone quickly heads back the Intercontinental Puxi hotel for rest before tomorrow's big day, there is no question that delegates have had their perspectives altered for the better. Greater intelligence with better connections equals more success businesses. Time to get to work. One more day to go...

To see the full Gallery for Shanghai Day 1, please visit Tobyns site HERE.

[ insert images TRP-534, TRP-536, TRP-538, TRP-539, TRP-545, TRP-555, TRP-567, TRP-560 and TRP-561 ]

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// comments

1

It is incredibly inspiring to read of the successes and persistance of Event organisers from the West, working closely with the Entertainment Industry leads and developers of the East. As our journey begins in this Industry in Guangdong Province, we enter deeper into Opportunity. The event as read TransmitCHINA - will be on our list for the next talks and would be very interested to communicate further with Entrepreneurs in the Chinese/Asian Entertainment Industry.

Thank you for your write up, it is a very interesting read!

by Tom Sanderson (http://www.red8events.com) / June 26th, 2010

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