China is one of the most fascinating digital-music markets in the world right now, with a number of licensed services building their audiences.
One of the companies involved in the streaming market there is e-commerce giant Alibaba. The chairman of Alibaba Music, Gao Xiaosong, gave a keynote at the Midem conference in Cannes today, sharing his views on China’s opportunities. He was interviewed on-stage by Ed Peto, MD of Outdustry.
Xiaosong talked about his history as a musician, playing guitar and writing songs at university without ever thinking that it would be his career. He studied film directing and moved into the TV commercials and music-videos world, then songwriting and producing. “I’m not a singer, I can’t sing!” he laughed.
By the 1990s he was playing concerts to 20,000 people at a time. How was he making his money, asked Peto. “For songwriters, they just pay you an advance fee,” he said – around $100 per song initially, but that rose. “I became the most popular songwriter, so they’d pay me $2,000 or something like that,” said Xiaosong.
He was aware of copyright legislation. “We understand one thing: China is a developing country. So our government decided to sacrifice those content industries to help the internet business industry, because ‘the internet is the future’,” he said.
“The first three or four big internet companies from China, they all grabbed some content. Music, movies, TV shows, news, photos. The government said ‘okay, be patient, let them be big’. Now they’re very big now. They’re monsters now. So the government made the decision last year: ‘Okay, you have to pay for copyrights’. And from last November, we don’t have any piracy any more.”
Now that the legal market is growing, Xiaosong is at a digital service. “When I was a CP nobody paid me! Now we’ve got a way better environment, I pay them!” he laughed.
Alibaba boss Jack Ma asked Xiaosong if he wanted to run a new business for the company, Alibaba Music. “We now build two big platforms to serve the music industry. One is a streaming platform like Spotify, and the other one is a brand new thing… a big platform called Alibaba Planet which we launched on May 18th.”
It’s not a streaming service, as such, it’s more based around “idols” – a pop-culture concept that Xiaosong said are an intrinsic part of Chinese people’s lives. “Western idols are more like heroes. They’re strong, muscle, beefy, they’re more like protectors. East Asian idols: Korean, Chinese, they’re pale, they’re skinny, they’re like protectees! So people always want to spend money on your protectees!.. And people want to pay a lot.”
He described it as a platform for stars and fans. “We promote stars because we have big data: we know where are your fans… We know everybody in China, they use [Alibaba’s payment technology] Alipay to buy, to pay for everything.” The company knows where fans are, what their education and income is, what kind of cars they drive and so on.
“We have everything. So we are more like a big agency, and we share big data to our clients. They open their own flagship stores on Alibaba Planet and we serve them to find their fans… We promote stars and the stars show their lifestyle, and the lifestyle will sell everything,” said Xiaosong.
How does he feel musicians fit in with the idol culture in China? “Idols are only those pale, skinny, handsome young men. But anyone can share their lifestyle [on Alibaba Planet. Normally we say idol fans are young girls, but we have Lang Lang on there. Lang Lang has his own fans, not teenagers,” said Xiaosong. “Everybody can be an idol!”
Peto asked about the ‘middle-class’ artists: they may not be hugely famous, but they have a fanbase and multiple income streams around their music: they can pay their rent and put their children through school. Why doesn’t that exist in China? “We have very poor musicians, and idols up here,” said Peto, wondering whether the middle part is important for a healthy ecosystem.
Xiaosong: “Alibaba Planet is a big platform and a huge ladder… We have let’s say BMG, they represent 150 songwriters, and for the first time BMG will open millions of unpublished songs on our platform, because we have big data… we can let fans choose: to pick songs for their idols, and for some young, new musicians.”
So fans are getting involved in A&R, almost, picking songs for their idols to sing, and getting rewarded for their activity on Alibaba Planet through its gamification features. They will also get points for promoting their favourite stars, becoming their digital street-teams.
Peto talked about the concept of ‘network songs’ – home-made tracks that would have bad production values, but would be put online – and when they became popular, labels would jump in and start selling ringtones of them. Xiaosong said that Alibaba Planet could function as a similar platform for talent discovery.
What about rights issues in China, where exclusivity on catalogues has become the standard for streaming services? “It will change very soon. We’re waiting for Tencent to come to us. We can sit down and talk: it’s only been a couple of months. Last November the first, we killed all the piracy,” he said.
“Tencent want to do their own copyrights, they have Warner, they have Sony, we have Universal… If labels said okay, we don’t want you big two – Tencent and Alibaba – to bid for a higher price. The labels could say ‘we’re going to share the copyrights to every platform. Welcome!’ Or do you want to go to Alibaba and Tencent and say ‘who’s going to give you more?'”
Are Western stars using Alibaba Planet? Yes, said Xiaosong. “The most important thing if you want to put a foot in China is finding your fans. Not only selling your copyrights or going on tour,” he said.
Western stars like Taylor Swift, Beyoncé and Bruno Mars can still only tour on the east coast of China profitably. “Western stars are only 14% of the market,” said Xiaosong. “They need to find their fans first, and they can do promotions on Alibaba Planet, and then they can do their tours in mid-west China and sell things to fans. But now they need to do promotion.”
Xiaosong was asked if there is a younger generation that wants to listen to “real music” not the idol-style stars. “We don’t do any music, we don’t make any music, we don’t sign any artists… we love real music. I don’t mean the idols don’t have real music! Sorry, the fans will kill me… We love something different. But you can open your store to do your music on Alibaba Planet. It’s just a platform, sharing big data with everybody, and serving everybody.”