He who calls the tune pays the piper

Hong Kong pop singer Jacky Cheung is among artists to have released digital albums via QQMusic, an Internet company that offers online streaming service. Provided to China Daily

Chinese are used to downloading music for free. A couple of industry veterans might now get themto change that culture. Chen Nan reports.

Twenty years ago, two Tsinghua University graduates, Song Ke and Gao Xiaosong, founded RyeMusic in Beijing, which led to the creation of what became known as "campus folk music", consistingof simple, youthful lyrics accompanied by guitar and piano. Not only that, but they also uncoveredsingers including Ye Bei, Lao Lang and Pu Shu, who would later become well-known pop stars. Inshort, Gao's and Song's contribution to China's music industry is widely credited, and the pioneeringspirit they showed in those early days is once again being brought to bear, this time by Ali MusicGroup, a new division of the e-commerce giant Alibaba. Their mission: to revitalize the commercialside of music, which has taken a beating in recent years at the hands of technology, and in particularpiracy.

Alibaba announced on July 15 that Gao, 46, a singer-songwriter and talk show host, will serve aschairman of Ali Music Group, and Song, 50, a music industry expert who worked with Warner Musicand co-founded China's top performing pop music label, Taihe Rye Music, will be chief executiveofficer.

Before working for Ali Music Group, they had worked for about three years for Evergrande Music,where Gao was chairman and Song was chief executive officer.

Evergrande Music, a label of Evergrande Real Estate Group, one of the country's 10 largest realestate developers, was founded in Beijing a little more than two years ago. Last year, EvergrandeMusic owned copyright to 22,000 songs and launched the Evergrande Starlight Carnival MusicFestival, which toured 100 cities across the country.

"As old warriors in China's music industry we have taken risks, achieved things along the way andsurvived," says Song, who after declaring "records are dead", opened a Peking duck restaurant inthe capital.

"We are schoolmates, lifelong friends and business partners. We trust each other. Alibaba haspowerful systems on big-data technology and online payments. We reckon the company is going tocome up with a very good music service and products."

Xiami and TTPod are two flagship music apps for Alibaba, which has long aimed to become anonline-media powerhouse, with music, film and television operations.

"In China, development of the music industry lags far behind that of other industries such as moviesand computer games," Song says.

"I am with Gao when I say that joining Ali Music Group will be our last gig in music management.We hope we can be game-changers in the way music is bought."

Ali Music Group's arrival on the scene, which may concern some of its rivals, reflects the revolutionthe Internet has brought to China's music industry.

Even a decade ago, the most common way for Chinese to listen to the latest release from theirfavorite artists was to go to local music stores and buy a cassette or a CD.

That business model, profitable if not always highly lucrative, has been broken by the Internet. Ayounger generation has grown up downloading music illegally, and music fans are happy to goonline to hear almost any track they can think of, generally without paying for it.

The International Federation of Phonographic Industry says in a report published this year thatChina remains a music market of enormous untapped potential, with an online user base of 650million people and a growing number of licensed digital services.

However, a culture of paying for music is undeveloped, and potential growth in that direction hasbeen hobbled by widespread, entrenched piracy.

The federation says that the value of online music sales in China last year was 9.76 billion yuan($1.57 billion), 5.6 per cent higher than in the previous year, helped by an increase in revenue fromstreaming music services. The hope is for further growth in coming years as companies establishmodels in which consumers pay for what they listen to.

One of the first Internet companies to offer an onlinestreaming service was QQ Music, a division of theInternet giant Tencent. Since it was set up 10 yearsago, it has worked with major recording companiesand built a new musical industry service model, whichincludes Green Diamonds, a membership subscriptionplan.

Andy Ng, general manager of QQ Music, says the company has more than 800 million users andmore than 15 million songs with copyright obtained from more than 200 record companies, amongwhich about 25 companies, including Warner Music and Sony Music, offer music content exclusivelyto QQ.

"Streaming is a pretty good dealbecause a monthly subscription costslittle more than buying an album," Ngsays. "With membership, fans can alsowatch recordings of their idols' liveperformances."

Musical streaming has also acceleratedthe trend of record companies andartists working with Internetcompanies to release digital albumsand netcasting shows live.

Pop artists such as the Taiwan singer-songwriter Jay Chou, the mainlandsinger Zhou Bichang, the Hong Kongsinger Jacky Cheung and the South Korean boy band Big Bang have released digital albums via QQMusic, priced at between 5 yuan and 20 yuan, and a total of more than 2.5 million copies.

Liu Xin, chief operating officer of the company Beijing Taihe Music Culture Development, saysrecord companies used to rely on producing stars and physical records, cassettes and CDs to makemoney.

When those profit streams dried up, the companies turned to selling other products and servicessuch as live shows.

His newly founded company aims to build acomprehensive platform, not just release new musicfor artists and holding live shows, but also offerservices for independent artists and protectcopyright.

"The challenge is not just to get people to pay formusic again. It's also about creating a healthybusiness model for the industry," Liu says.

Contact the writer at chennan@chinadaily.com.cn

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