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Groove Dynasty
Licensing Issues in China

China Panel at ADE

Licensing Issues in China

by Spencer Tarring CEO

Posted on November 03, 2016 at 16:45 PM

Last week we returned from arguably the most influential conference for electronic music, ADE (Amsterdam Dance Event) in The Netherlands. It was an incredible experience, and I got a chance to moderate a panel on the China electronic music scene. The turn out was incredible, and it seems many people are now starting to take China seriously as a market (which they should be!).

One of the main topics that we touched on, was Licensing. In all honestly, an hour wasn’t enough to cover any of the 8 subjects we covered, and certainly not licensing. So I wanted to discuss some of my views and experience on the blog. First lets have a run down of the top DSP’s.

  • PYRO Music
    www.pyromusic.cn
    Similar to Soundcloud, focused on UCG, but importantly is leading the way in acquiring licensed content from labels, and helps to deliver key data for users. Includes Shows, Venues, News, and is focused totally on electronic music.
  • Netease 网易云
    music.163.com
    TBH, my most disliked platform because of their blatent strategy of ripping off rights holders. They have almost every song you can imagine, and hardly any of the licenses. There idea is use content to acquire users, regardless of whether we have the license or not. However, the strategy has worked and they have a lot of users.
  • QQ Music
    y.qq.com
    Owned by Tencent, QQ is most similar to spotify. A great app, but again very lax on licenses. Focused on major label music.
  • Kugou
    www.kugou.com
    Traditionally focused on Chinese pop music, a huge amount of followers, but an ageing user base. Right now they are looking at moving into electronic music, but are missing the skill set and are significantly behind the other platforms.

Exclusive License Deals Must STOP!

Something that has really frustrated me since moving to China 8 years ago, is the exclusive license deal phenomenon. No-where else in the world, do labels, distributors and representatives rush to was their hands of a market by signing an exclusive license deal to someone in the territory to handle the entire license for a fixed fee. This is how China’s licensing has been traditionally operated. A company offers a small buyout figure (much smaller for the electronic industry since its made up of 30,000 small labels instead of 4 big ones), and then distribute the music how they see fit. No reporting, and no additional monies. Labels have tended to except this because:

  1. Language barrier – Not many DSPs and aggregators in China actually can speak English!
  2. Firewall issues – Again, breaks down communication, and puts up a barrier in transparency.
  3. Piracy – China has one of the highest piracy rates in the world for music.
  4. Lack of proper monetisation strategies by DSP’s.

The exclusive deal therefore helped to absolve the labels of these issues, but in essence what happens is more piracy (the licensee’s distribute the content without anyone to answer to), profiteering, as they don’t need to report, and finally, absolutely no data or transparency on where or how much the music is being played.

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Information, transparency, and DATA

Key to anyone’s marketing strategy, is data. More and more people are wanting to know where their music is being played, what artists are hot, how to access the China market etc. Controlling your music catalogue with direct relationships with the DSP’s in China is absolutely key to achieving this. At Groove Dynasty we are helping some of the leading catalogues and aggregators integrate directly and transparently into DSP’s such as PYRO, Baidu Music, Echo, and more recently Netease.

Monetisation & the Fast Changing Market

If you are a catalogue owner, you will know, that making money from your catalogue in China has basically been impossible, due to some of the things we talked about above. However, we believe this is starting to change. Some of the leading platforms are beginning to charge for VIP content, and extra features on there app, and in particular for Electronic Music, there is a real shift in focus from advertisers towards this market because of the affluent nature of the users. PYROMusic.cn is launching its VIP service and PRO DJ service in February 2017, and we believe the timing is really good.

If you are interested in more information, or want Groove Dynasty to help you develop your catalogue in China, please contact info@groovedynasty.cn and we’ll come back to you asap.

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About the Author

Spencer Tarring

CEO & Founder of PYRO音乐. DJ and producer, lover of electronic music. Based in Shanghai, China, with 18 years experience as a DJ and music professional. Working extremely hard right now!

 

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