Anyone looking for a glimpse of where the music industry may be in the future need look no further than China. For this is a country where legitimate physical product is disappearing and exists increasingly to promote digital sales; where unknown artists are discovered and promoted on the internet rather than traditional media; where tones, ringback tones and such like are becoming key revenue generators; where record companies act as the managers, publishers and concert promoters for the artists they sign; and where telcos still earn more from music than established music companies.
As China's economy continues to open up, the opportunities for its music business have excited considerable interest for the best part of a decade, with both new local companies and then the multinationals setting up shop. And there has been constant interest from a wider range of players, including, for the past two years, a UK Trade Mission sponsored by UK Trade & Investment and led and co-ordinated by AIM, with input from SWAT Enterprises as local consultants.
Few if any of the members of the recent Aim delegation had any delusions about the ease of doing business in China. Indeed, Swat Enterprises, the Singapore-based marketing consultancy founded by Asia veteran Stuart Watson which co-ordinated the trip, made sure that everyone taking part arrived prepared. "This is a complex market and there is no point in turning up thinking you will walk away with a bunch of deals" he says. "This is all about doing business in the long term."
However, everyone who took part came away feeling enthused about the opportunities that may await down the line. Some are even now lining up records to release there, participate in live events and even co-ordinate co-writing sessions. And all agree that spending time with such a diverse cross-section of the UK music business was in itself both educational and extremely worthwhile.
In both Beijing and Shanghai, delegates attended a well-organised series of presentations spanning record companies, digital aggregators, broadcasters, lawyers, ad agencies and live promoters, as well as input from the British Council, which has, in recent years, facilitated live shows in China by the likes of Morcheeba, Ladytron and A Man Called Adam and is discussing a strategic partnership with Channel [V]. All the delegates also got the chance to present themselves to local executives, many of whom were already familiar with the likes of established names such as Ninja Tune, Beggars Banquet and Fabric and were queuing up afterwards to talk about potential partnerships. And, most important of all, were the networking opportunities throughout the day.
A month on from the trip and most of those who took part are now following up business opportunities. Simon Wheeler says that Beggars is currently weighing up a number of potential deals, although it may still be too soon actually to release product into the market. "It's all about trying to build a decent base and develop those all important relationships," he says.
Dutch Van Spalls from Warwickshire-based Big Help Music is in the process of finalising live dates in Shanghai next summer for his new singer-songwriter Marie and is also exploring co-writing opportunities with a popular Tibetan artist.
Publisher Stuart Hornall says he is talking to the British Council about co-ordinating a writer exchange programme in the short term, as well as developing longer-term plans. "There are no intellectual property laws that can help us at the moment, but once they start working in the international market, it's going to have to happen," he says.
Pat Fulgoni from Chocolate Fireguard says that, since returning to the UK, the company has been approached by concert promoters and internet portals for three of its acts. "[This] well-organised trade mission to China has given is such a deep and rounded insight into this vast territory and introduced the label to some serious key players in the Chinese music industry," he says.
Chris Goss from drum and bass label Hospital says, "I thought I might not come back with anything more than some memories and nice photos, but we have already had an initial offer for some club shows and also some conversations about licensing, although that may be too soon and our priority is to focus on the clubs".
Likewise Poptones' Goatie Lewis says he found the trip very inspiring. "This mission was very eye-opening and the seminars and activities organised were very proactive and useful," he says, adding that he is working towards organising a showcase for Mogwai during 2007, using contacts made during the trip, as well as planning a number of shows with other artists next year.
"It is important for AIM to repeat the mission on an annual basis," he says. "The global competition to penetrate the frontier market of China is growing. We have so much talent and expertise here in the UK and it will be a shame and a waste if other European nations beat us to China."
UK companies aim to crack fast-changing Chinese market