There is an old Chinese proverb that says, “The nail that sticks out gets hammered down.”
That’s a helpful nugget to remember for the non-Chinese production music library that endeavors to expand their business into China. The “nail” in this example is not said music library, mind you, but rather mid-sized businesses, based in China, that take the inevitable hard look at their own branding efforts and ask the age-old question: “Couldn’t our music be cooler?”
As a former boss of my mine once said, “These companies are feeling a specific pain that your product can remedy. Bring your product to them.”
Is this a wise strategy to deploy in China? In this article we’ll dissect that opportunity and determine if the time has come for Western stock music companies to expand into China.
Flag #1 (which is colored red only because it’s their national flag….right?)
State censorship has dulled the musical sensibilities of Chinese listeners to the point where their top-grossing acts are an echo of the 80’s. Here’s a recent single from popular artist Faye Wong:
For any forward-thinking music executive, this void of decent music should be the first of many palm trees that form a tempting revenue oasis.
Assuming the music market evolves as it has in other countries, US intellectual property such as Louis Armstrong and Audio Slave will once again become America’s prized export. All that beautifully expressed angst will become our greatest ambassador.
Then music libraries will create their own slightly watered-down instrumental versions of these popular styles and enjoy the coup of not having any lyrics to be censored. The pitch would be simple: “Our stock music is culturally advanced yet politically safe. Place your order today.”
Flag #2 (wait a minute – it might really be a red flag)
The picture becomes even sexier when we see recent progressive gestures on the part of the Chinese government. In mid-2010, the Chinese Ministry of Finance announced it would no longer peg its currency, the Yuan, to the US dollar.
It is difficult to convey the impact this ground-breaking decision will have across the world over the next few decades. For most of the twentieth century, China’s one billion citizens have been insulated inside a national economy in which their basic needs were met largely by wages or government programs (the fact that this managerial feat flies in the face of every flag-waving speech given during the Cold War is an uncomfortable topic for another blog).
But because China’s currency only had value inside the country’s borders, most global companies severely limited the energy they invested into that swath of potential customers.
That will slowly and surely change over time. In the coming years we can expect to see the spending power of China’s citizens provide a key ingredient in our global economic recovery: demand. Lots of it.
Flag #3 (ok, it’s definitely a red one)
The final component that may convince a music library owner that good times are coming is the Chinese government’s 2001 announcement that they would increase efforts to enforce copyright protection and finally take an official stand against the rampant music piracy. Music piracy had plagued major label record sales in China years before Napster largely due to differences in fundamental beliefs about intellectual property, but outside pressure compelled the Chinese government to issue legislation that recognizes the entitlements of music creators.
Ready, set…..
So is it time for the Western production music industry to jump feet first into the Chinese market?
Sadly, no. While conditions appear to exist for an emerging market, they only appear that way. According to a report published by ASCAP in 2010:
“…in the entire nine-year period [since China passed copyright protection legislation], up to and including today, not a single Yuan has ever been paid to PROs for disbursement to songwriters, composers and music publishers for…..music used by broadcasters [in China].”
Quite simply, even large corporations in China cannot be expected to respect copyright law at a meaningful level if the state doesn’t take real action against violators and enforce their new laws.
Furthermore, it will take years before the inevitable thawing of censorship lightens to a point where media decisions are not fear-based and highly hegemonic. Large companies are more than happy to use crappy music as long as it prevents the hammer.
A high profile example of our earlier “nail” metaphor is Rupert Murdoch, who has became so enamored with China as a media opportunity, he took a Chinese wife (after divorcing wife #2) with whom he built a palatial home 2 blocks from Beijing’s Forbidden City.
Murdoch invested tens of millions of dollars into creating government connections that would allow even a milquetoast version of Newscorp content into China. So far, China has denied him.
No matter what quality differences exist between Gray’s Anatomy and TV content generated by the Chinese Department of Propaganda (yes, they actually have that), the house always wins.
So Until Then…
In this writer’s opinion, there will be no exploding market in China for production music until a climate exists where decision-makers at large China-based businesses regularly say, “Man! We really need some cool music in this video (see red flag #1), but we can’t afford the famous song we really want (see red flag #2).”
Until then, there’s only one potential client with both a vested interested in creating cool media and a high enough profile to respect international copyright law……the Chinese government itself (red flag #3).
No problem there. My brother knows a guy. I’ll hook you guys up on LinkedIn. Hey- did they just put out fresh egg rolls on the buffet? Back in a sec.
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Mike Bielenberg is a professional musician and co-founder of http://www.musicrevolution.com, a production music marketplace where media producers and business owners can license high-quality, affordable music from a online community of musicians.