beatsreport china 2019 digital · 2019-10-15 · production, composition, sound engineering, visual...

BEATSREPORT.CHINA 2019

Presented by INSIGHTS INTO THE CHINESE ELECTRONIC

MUSIC INDUSTRY

AN INTRODUCTION

For many people working in the modern music business, China is an unknown territory. People think of it in terms of strange, new, exciting and promising. Although all of this is true, China is way beyond this. Only five years ago, China was a land of potential. A land where anything could happen but where not too much actually was happening. That has changed. Modern music in all its aspects has grown into a serious business, and more and more people are part of it. The array of people involved reaches far beyond DJs and producers as it encompasses club owners, bartenders, designers and other creative jobs. Still, China is a land of potential; this report writes about the potential that has already been fulfilled and offers snapshots of the size and characteristics of the Chinese (electronic) music market.

GOALS AND CONTENT

The writers of this report aim to describe the different aspects that make up the electronic music scene in China. It zooms in at festivals, clubs, streaming, education, mainstream and the catalyst behind every cultural development: the underground scene. To do so, we analyzed available data, interviewed electronic music fans, and its actors including the main stakeholders of both the mainstream and underground scene. The report looks at the latest developments in China’s electronic music industry in the context of a dynamic society and economy and explores opportunities and threats. This report is by no means a full overview of China’s electronic music market, but an attempt to structure and map available information to order to inform the global electronic music industry about the current state of affairs in China.

MAIN SOURCES

The report puts its focus on Chinese electronic music consumers and is partly based on Nielsen’s research “Insight Into Chinese Electronic Music Industry”19 as commissioned by NetEase FEVER. However, additional sources have been added to shine light on specific aspects of the market, such as Soundcharts’ “China Music Industry Analysis, July 2019: Recorded Music, Music Publishing & Live Events”24 alongside with various other sources, as theoretical framework for an overview of the Chinese market and its idiosyncrasies at large. Finally, in order to gain qualitative information on the markets, we conducted a series of interviews with different actors in the field. Thus, we observed the market from their perspectives and reported them through their quotes. The report’s data and percentages are based on the above-mentioned researches’ samples ranging from 500 to 1,400 interviewees.

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4BEATSREPORT.CHINA 2019

SUMMARY

INTRODUCTION

CHAPTER 1: CONSUMERS

CHAPTER 2: FESTIVALS

CHAPTER 3: CLUBS

CHAPTER 4: STREAMING

CHAPTER 5: LABELS

CHAPTER 6: ARTISTS

CHAPTER 7: EDUCATION

CONCLUSION

CREDITS

Page 06

Page 10

Page 16

Page 22

Page 26

Page 30

Page 36

Page 40

Page 44

Page 48

2

5

• Revenue growth in all segments of the electronic music industry.

• Among all music genres in China, electronic music is considered to be the second favorite genre (39.7%).

• Among the sub-genres, the most followed are House (53%), Bass (50%), Trap (39%), Trance (37%), Techno and Hard Dance (31%).

• 80% of Electronic Music Fans (EMF) see electronic music as a habit, and 20% of EMF see it as a possible career.

• 84% of EMF show interest in customized electronic music tours abroad, directed to the United States (53%), Netherlands (40%), United Kingdom (34%) and are on average available to spend on it 997 €/year.

Consumers

• Mainstream electronic music scenes are quickly expanding also in smaller second and third-tier Chinese cities, but mostly in clubs catering for VIP audiences.

• The underground electronic music scene sub-genres are now developing horizontally all over China, yet the underground music club scene is considered to be relatively small, with several dedicated underground clubs in China’s first- and second tier cities.

Clubs

• The number of electronic music festivals is growing rapidly in China, from 32 registered in 2016, to over 150 in 2018.

• Festivals mainly use music apps as their single marketing channel.

• Audiences do not feel that brand awareness is crucial for going to a festival.

• Festivals imitate foreign formats and rely on big foreign names rather than local artists.

• Festivals have high costs in publicity and artist fees, thus sometimes neglecting the on-site experience.

• Difficulties in setting up a festival in China lie in fragmentary local regulations, hardships for site approval and obtaining investments.

• Festivals in China are expected to diversify and strengthen brand awareness by catering to specific sub-genres and audiences.

Festivals


• Almost the entire market is divided by China’s largest Digital Streaming Platforms; Tencent Music Entertainment, NetEase Cloud Music and Alimusic.

• While Tencent Music Entertainment (TME) is currently the market leader, a recent investment by Alibaba into NetEase Cloud Music has a potential to shift the market.

• Consumer behavior needs to change towards premium subscriptions in order to develop a healthier climate for artists.

• A minority of the artists collect revenues from online gifting (dashang system).

Streaming

• Several EDM acts have gained recognition both domestically and internationally over the past few years.

• Chinese artists are entering DJMag’s top 100, with DJ Carta as highest ranked Chinese DJ.

• A majority of Chinese DJs have a hard time being represented by the clubs and festivals, which often rely on international line-ups.

• China yet has to identify an own superstar DJ, which can be a role model and give the entire Chinese electronic music industry another boost.

Artists

• A growing number of Electronic Music Fans (EMF) see electronic music as a possible career; music production, composition, sound engineering, visual design, digital design etc.

• There is a demand for electronic music courses and educational institutes.

• An issue to be solved is the lack of a nationally recognized certification system.

Education• In 2011, the majority of downloads

were illegal. By 2018, 96% of consumers listened to licensed music.

• The per-capita recording music revenue in China is surprisingly low, €0.18, because consumers stick with freemium services, as they are used to listening to music free of charge.

• User Generated Content Platforms are helping indie labels in gaining artists’ exposure.

• Electronic music labels are limited in numbers and are considered to be the missing actors of the Chinese industry.

Labels

9

Read more about the history of the Chinese electronic music industry >

“With a population of 1.4 billion people and the growth of the economy, the inclusive culture DNA, we see China as the biggest

market of dance music.”

Sherry Huang - NetEase FEVER

“Electronic music is not a fad, but a trend, a trend that would not fade away for at least a decade.”

Chang Liu - Pillz Records

“We have always firmly believed and often remind ourselves that working in

the music industry is a privilege, because we are

given a tool to make a difference, and the tool is

music. Music has no limitations and it requires no language to transcend

consciousness.”

Yawen Maggie Luo - ISY

“I like watching China bass grow. It's great to see authentic Chinese culture mixed in with electronic music and I really think it's something that can help put China on the map as an exporter of culture in this modern world.”

Steven Dowler - Monstercat

“I think electronic music has great cultural value, and every club and

artist plays an important role to keep the music quality high and alive.”

Bram van Ravenhorst - Echobay

“Electronic music is just like electricity; I couldn't live

without it.”

Peipei Xun - DJ

“I see a lot of local talents rising quickly and a stronger focus on developing local brands. China is more and more developing its own identity for electronic music, both in the clubs, its artists, its music and its own lifestyle.”

Paul Neuteboom –BrotherHood Music

GLOSSARY

The overarching musical genre music that employs electronic musical instruments, digital instruments and circuitry-based music technology, including all electronic music sub-genres (House, Trap, Trance, Dubstep, Tropical, Future Bass, Hard Style, Techno, Drum & Bass, Downtempo, Disco, Electronica, Hi-NRG, Industrial, Post-Disco, UK Garage, Chiptune, etc.).

Electronic Dance Music, the mainstream manifestation of Electronic Music.

Electronic Music Fan, the overarching term including both casual listeners and committed fans.

Electronic Music Enthusiast, the most committed fans of Electronic Music.

Electronic Music Listener, casual fans and listeners of Electronic Music.

Electronic music

EDM

EMF

EME

EML

In the age of classical music, sounds were produced by resonance of objects, such as zither.

In the age of electronic music, instruments began to have simple analog timbres, such as electric guitars.

In the era of electronic music, traditional musical instruments can be replaced by computers, iPads and mobile phones for music production/creation.

Driving factors of practitioners expansion

Development of science and technology lowered barriers of entry and more practitioners engaged in electronic music industry.

Source: "Insight Into Chinese Electronic Music Industry (2019)” by Nielsen, commissioned by NetEase FEVER

Instruments 1.0 Instruments 2.0 Instruments 3.0


HISTORY OF ELECTRONIC MUSIC IN CHINA

“Hello Mr. DJ.” It was around 1990 and Zhang Youdai was playing some tapes in a cafeteria at Beijing University at one of the weekly sanctioned dance events. These words, uttered by a Westerner called Kenny Bloom might well be the first time it was used in the Middle Kingdom.

However, the first vivid memories of something like a real electronic party emerge mostly around 1996/1997. Contemporaries mention places like NASA and DDs in Beijing (and from 1999 the legendary The Vogue/88 club — China's version of Studio 54) or DDs, YYs, PARK 97, Rojam JJs, DKD, and later MUSE in Shanghai as the first places for proper clubbing. [...]

[International] DJs like Laurent Garnier (1996), Derrick May + Technasia (1998) and Paul Oakenfold (1999) as one of the first, if not the first, superstar DJ would arrive in China. 1998 saw also the first rave at the Great Wall in Simatai initiated by the swiss collective CHEESE. [sic.]12

Already in those early years, two different scenes emerged: one underground scene, mostly driven by house and techno, supported by some local DJs and promoters and one more mainstream-oriented scene.

We dare to predict: this is just the beginning.No matter which music style, a different mode of consumption of club culture between Westerners and locals was defined at that time, as described in “Shanghai Nightscapes”: “We can see the emergence of a Chinese model of gendered clubbing sociability, whose defining features were male patronage, a closed circle of friends, and an emphasis on prestige consumption.”10 The latter mostly displayed by a preference for table over bar service and the ubiquitous practice of serving expensive bottles of liquor or champagne to a table reserved with a minimum charge, oftentimes shared with a close circle of friends. By 2008 the chain club phenomenon, of which Muse in Shanghai was at the helm, had started. It followed the expansion of Noah ́s Ark Group (and the affiliated Sino Group), a privately-held entertainment group from Jiangsu Province which held 14 clubs on China's East Coast and by 2014 Shanghai clubs like No. 88, Linx, Myst, Club M1NT and Paramount Ballroom.

While the first proper underground electronic music festival, INTRO, had already started in 2009 in Beijing, the mainstream EDM scene got its first big-scale festival with the now-defunct STORM Festival in Shanghai.

Now in 2019, there are a bunch of electronic music festivals in China, underground clubs, as well as the more commercial-oriented electronic music clubs, have proliferated around the country. In the last few years, a domestic DJ scene has emerged country-wide, and in the last 2 or 3 years, we are also seeing more and more domestic producers coming onto the scene. In the meantime, an increasing number of education facilities are teaching Chinese youth the business as well as the tricks of the craft. There is no doubt that China's electronic music scene has come a long way since the famous first words “Hey, Mr. DJ” were ushered nearly 30 years ago. And we dare to predict: this is just the beginning.

13

CHINA AND THE CHINESE MARKET

Since 2013, when the first EDM festivals emerged in China, the EDM business in China developed fast. The industry is meeting an ever-changing landscape that has its own idiosyncrasies based on the unique environment it developed into. However, it is hard to come by any reliable numbers to describe how big the market actually is. In China, this is a common problem and not unique to the electronic music industry. If we look at three important pillars of the Chinese music industry: Live, Recording and Publishing, the existing numbers tell us the following story.

Recording From 2015 to 2018, China climbed from 21st to 7th rank in the IFPI Global Music Report. According to IFPI’s then regional director for Asia, Ang Kwee Tiang, in 2017 recorded-music revenues in China grew 35%, up to €264 million, of which streaming revenues consisted of €185 million, thus accounting for most of the growth and about 70% of the recording music market.16 Numbers by iResearch from 2018, however, point at a much bigger market, putting the revenue of China's digital music market (without further explaining how “digital” is defined) at €974 million, speaking of a yearly growth of 113%.15 An even higher number for the digital music industry is provided by the 2018 China Music Industry Report, jointly conducted by the Beijing Municipal Radio and Television Bureau and the Communication University of China. According to this report, China's digital music industry was worth €7 billion in 2017.28

Live The same report points out that the live market in 2017 expanded to the point it was worth nearly €2 billion and that 15,000 live music shows held across China attracted a combined audience of 13 million people last year - up 30% and 14% respectively if compared to 2016.28Daolu Cultural Industry Research Center, however, puts the value of the Live Music Industry at only €675 million the same year, while in terms of audience and amount of live music shows it reaches numbers similar to the China Music Industry Report’s.2

Daolu Cultural Industry Research Center however, puts the value of the Live Music Industry at only 675 million euro the same year, while in terms of audience and amount of live music shows it reaches similar numbers to the China Music Industry Report’s.

“Electronic music leavespeople more space to the imagination. It doesn't have complex melodies and arrangements. To me it is a very reflexive genre of music.” Mickey Zhang - DJ

PublishingChina has two collective copyright management organizations. The Music Copyright Society of China17 (MCSC) which was jointly initiated by the Chinese Musicians Association and the National Copyright Administration of China7 (NCAC) in 1992, and the China Audio-Visual Copyright Association6

(CAVCA) founded in 2008.

According to its most recent report, by the end of 2018, MCSC's licensing revenue reached €40 million to attain growth for ten consecutive years, with an increase of 46% if compared with 2017, and an over sevenfold increase since 2008.18 Annual income from CAVCA (mainly copyrights collected from KTVs) is estimated at about €27 million €/year. This would put the publishing income at about €68 million in 2018.13

Unfortunately, currently there are no numbers available for either sync deals nor the fees major publishers got as advance from the big streaming companies. But it is likely more than what MCSC and CAVCA collect.

While we can see that we have widely differing numbers depending on the sources, one trend is clear: the Chinese music market is growing rapidly.


While we can see that we have widely differing numbers depending on the sources, one trend is clear: the Chinese music market is growing rapidly.

Chinese music industry revenue by source (2017)

Source: IFPI, CAVCA, MCSC, The Daolu Cultural Industry Research Center

15

80% of EMF are focused on it decidedly only as a habit, but

20% of them see it as a possible career.

Read more about the Chinese electronic music market and consumers in the following chapter

17

“I hope more Chinese people understand, like and respect music for

real, so they can choose what genres of music they really like.”

Peipei Xun - DJ

“The Chinese young generation is very much into EDM music. Clubs are opening one after the other nation-wide, lots of young people are making their own music. I think it is a good start.”

Scarlett Li - ex EDC China

“The Psytrance scene is developing: more local China-based Psytrance producers are appearing, high quality

parties with international bookings are taking place more frequently, and more cities have their own scenes.”

Peter Donaldson - Spirit Tribe Festival

“Electronic music has developed rapidly in Chengdu in the past five years. It has become an important place for electronic music in China. Because of the efforts of local clubs and some event labels, local ravers and music lovers, you can now find the most cutting-edge electronic musicians in Chengdu.”

Ellen Zhang - TAG Club

“Electronic music has been widely accepted in China.

Reasons for this would include the lack of lyrics, ease of

importing acts as opposed to hip hop, the use of EDM in

clubs, and the trend of playing music in the background at

KTV rooms to mimic a private club instead of just singing

along with songs.”


“In terms of genre, EDM is going down a bit, Bass music and Techno/ House are on the rise, with Bass music being the

next most popular by quite a bit.”


“I think none of the genres are represented enough just yet, and I think this is due to the electronic music scene being still very young in China. Of course, EDM overall has a bigger presence because of all the new festivals and commercial clubs, but I wouldn’t say the EDM labels are mature enough to support the scene and the artists.”

Zhao Yue - Merrie Records

>

Distribution of genres surveyed users in China listen to daily in 2016-2017

Source: iiMedia Research: 2016-2017 China Electronic Music Market Research Report

GENRES AND SUB-GENRES

After Pop, electronic music is consistently the second preferred genre on streaming platforms in China. In 2016-2017, 39% of users listen to this genre daily.27

Within this, the Electronic Music Fan (EMF) favorite styles are House Music (53%), followed by Bass Music (50%), Trap (39%), Trance (37%) and Techno and Hard Dance Music, at a tie at 31% of preferences. Some other styles which received preferences are Disco, Chillout Downtempo, Ambient Experimental, Indie dance.19

7.7%

7.9%

11.3%

12.4%

13.8%

15.0%

16.8%

25.6%

32.1%

39.7%

65.9%

Hip-hop

R&B

Country

Metal

Jazz

Ethnic

Classical

Folk

Rock

Electronic

Pop

Electronic28.5%

Pop54.4%

Rock26.2%

Favorite type of electronic music

Top 3 genres preferred by users in 2016-2017

Job distribution of surveyed electronic music lovers in China in 2016-2017

4.6%

1.3%

2.2%

3.3%

5.8%

12.6%

14.9%

25.6%

29.7%

Other

Unemployed

Mid to high level mgmt.

Public servant

Legal/education professional

Business/service industry

Freelancer

Office worker

Student


Middle school or below70%

Master's degree or above15%

High school or vocational high school7%

Undergraduate of vocational college8%

Level of education distribution of surveyed electronic music lovers in China in 2016-2017

53% 50%

39% 39%31% 31% 29%

23% 22% 19%




CONSUMPTION

The Electronic Music Fan (EMF) definition includes Electronic Music Enthusiasts (EME) characterized by heavy expenditure of money and/or time on EDM, and Electronic Music Listeners (EML), casual electronic music fans.

Among the EME group, we have 22% having both high time and money expenditure on EDM, 23% spending large amounts of time only and 11% having heavy expenditures on EDM only.

Regarding the consumption of merchandise, EMF (EME and EML) all purchase mainly equipment (61%), followed by online track and album purchases (55%). These purchases are thus both online and offline. Furthermore, EMF show for the 88% high interest or relative interest in electronic music offline experiences, with a specific focus on a strong live atmosphere and rich thematic activities. Plus, 82% of EMF show interest in VR music games, keeping in mind that on average 80% of EMF paid for video games before and on average paid 176 € on games.19

The EMF are in majority of males (60%) and females for the remaining percentage. 64% of the consumers have higher education diplomas (Bachelor or above), are for the majority white collars (40%) and the second-largest social group is students (36%). More than 50% of the consumers are aged between 20 to 30 years of age and over 62% of all of the users are located in first or second-tier cities. The majority of the fans have a middle-class income (32%) whereas upper middle-class income fans (28%) and lower-income fans (26%) remain the minority.

The consumption expense level, however, differs noticeably between EME and EML: the EMF average is of 279 €/year, whereas EME spend on average 369 €/year, EML only 149 €/year. Among EME 63% do spend more than 128 €/year, of which 16% spend more than 638 €/year. Instead, a solid 80% of EML spends less than 128 €/year of which 33% only spends less than 38 €/year for it.19

23%33%

17%

31%

47%

20%

34%

15%

47%

11%5%

16%

EMF (N=1380) EML (N=599) EME (N=781)

638 euro and above

128 - 638 euro

39 - 128 euro

38 euro and below

Consumption of electronic music merchandise in the last year


Avg, 279 euro

Avg, 149 euro

Avg, 369 euro

19

Furthermore 84% of EMF show interest in customized electronic music tours abroad, mostly directed towards the United States, the Netherlands or the United Kingdom, and are available to pay on average 996 €/year per tour. Finally, 73% are interested in EDM merchandise: this merchandise interest includes mostly equipment such as headphones or loudspeakers and fashion brand accessories.19

Expected destination of customized electronic music tour


1%

2%

13%

22%

23%

24%

25%

25%

34%

40%

53%

Others

China

Southeast Asia

The rest of Europe

Japan, Korea

Spain

Germany

Belgium

The United Kingdom

The Netherlands

United States

“What music genre or style the night

has, is not the most important. If people can be entertained

and whether they enjoy the party,

that’s what really matters.”

Bram van Ravenhorst - Echobay

Electronic music as a lifestyleAll three EMF and EME and EML present a strong preference in the scenarios in which they tend to listen to EDM, when they are happy, when exercising and for simple time-killing. 80% of EMF are focused on it decidedly only as a habit, but 20% of them see it as a possible career.19


Way

s of

list

enin

g to

ele

ctro

nic

mus

ic

24%

23%

41%

42%

48%

36%

31%

23%

10%

13%

29%

28%

54%

43%

44%

34%

35%

31%

50%

52%

43%

39%

21%

15%Shuffle play on digital music platform listen if there is electronic music

Listen if digital music platform push electronic music to me

Follow when new program launches

Search for electronic music spontaneously

Search for a certain electronic music style spontaneously

Search for a song list/album of a certain DJ spontaneously

Consider to attend live show when possible

Feel uncomfortable without electronic music in a day

EMF(N=1380)

EML(N=599)

EME(N=781)

CONSUMPTION HABITS AND CHANNELS

Among EMF, 56% have been engaging with electronic music for at least 3 years, 87% listen to it at least once a day on an average duration of 45 minutes per listening session.

However, the specific listening behaviors differ between EMF and the specific groups of EME and EML. For instance, EMF mainly search for music spontaneously (48%) or a specific music style spontaneously (42%) or song lists and albums spontaneously (41%). EME do have similar behaviors on spontaneously searching for specific music styles (51%) or certain song lists or DJ (50%). However, EME also do tend to be the group that most often considers going to live shows when possible (31%) and that feels most uncomfortable without listening to electronic music at least once a day (35%). Regarding EML, similarly to EMF do search spontaneously for electronic music (54%), but are noticeably more interested in following new programs (43%), listening to music pushed by music platforms (44%) and shuffle playing streaming platforms with electronic music (34%).19

Regarding the channels where the EMF listens to music, on average 90% would be streaming music apps, and only for EME, we see a higher percentage of live show interest (42%) in opposition to the more casual listeners (22%).19


21

Chinese electronic music festivals will be focusing their attention on diversifying and

catering to specific audiences, thus creating more brand

awareness among the public.

Read more on the festival industry in China and the issues that the electronic music festivals are facing in the following chapter

23

>

“However, due to the fact that INTRO is focused on underground rather than

EDM, it sometimes is difficult to find the balance between cultural promotion and

commercial operation.”

Angelina Si - Mai ai Culture Communications

“Despite its grand presentations and impressive fanbase statistics, the festival format sees most of its revenue disappear with the artist’s and agencies’ fees. Hosting a music festival is unfortunately not the most sustainable approach to achieve proportional profits.”


“It is an irreversible trend that the rapid development of technology will highly improve the electronic

music industry, especially for live music. Holograms with 3-D glass-free technology and VR pop stars will make great contributions to live music. They provide

more virtual content and interaction experiences to guide a new art expression form.”

Angelina Si - Mai ai Culture Communications

“BHM aims at creating a full electronic music ecosystem. A system which is not only focused on the festivals and events, but also on the artists, the music, the venues, the platforms, and the PR networks.”

Paul Neuteboom -BrotherHood Music“Most festivals in China

take place in commercial or land owned by property

development companies who pay for the festival as

a way to advertise the properties. Spirit Tribe is 100% independent we do

not even have any sponsorship of any kind.

That’s very rare for China.”

Peter Donaldson -Spirit Tribe Festival

Awareness, attention, participant on electronic music festival


NUMBERS AND RISKS

The number of electronic music festivals in China has been consistently increasing in the past years, from only 32 in 2016 to more than 150 in 2018.27 Among EMF, 96% knows at least one music festival, 88% has been paying attention to festivals and 57% has participated in one in the past.19

32

86

150

1 2 32016 2017 2018

+Growth of electronic music festivals in China

Source: iiMedia Research 2017 China Electronic Music Market Research Report

“A festival experience or a sub-cultural experience ultimately leads to a municipal (and even provincial) market expansion with emphasis on the cultural, entertainment and experience industry developments.” Yawen Maggie Luo - ISY

EMF collect information on festivals with an overwhelming majority on music apps and websites, implying a single marketing channel for this kind of product. EMF interest in particular festival is interestingly not linked to high brand awareness of the event (27%). According to EMF, the most important features for a festival are good atmosphere (53%), high sound quality (46%), entertaining performances (43%), presence of favorite DJs (41%) and strong lineup; often judged by the audience based on the presence of Top 100 DJs (39%).19

Mai

n re

ason

to a

ttend

el

ectro

nic

mus

ic fe

stiv

al


16%

19%

23%

24%

27%

29%

31%

32%

39%

41%

43%

46%

53%

Good order and security

Convenient location

Good service experience

A lot of interaction/games in festival

High brand awareness

Affordable/reasonable ticket price

Favorite music works

Time is appropriate

Strong lineup (Top100 DJ, known works)

Favorite DJ

Shocking dance/performance

High sound quality

Atmosphere is extremely high

96%

94%

97%

88%

81%

93%

57%

49%

64%

EMF(N=1380)

EMF(N=599)

Awareness

EMF(N=781)

Attention Participant


Fragmentary laws/regulations and confusing management.

High policy risk

Due to the lack of mature domestic brand of electronic music festivals, the cost and risk are high. So investors are relatively cautious.

Difficulty in obtaining investment

Electronic music festival rely on foreign artist due to the lack of domestic talents.

Lack of local talents

There is no special site for electronic music festival in China. Chinese government is very cautious about the approval of the site in view of the safety issues, such as load.

Difficulty in site approval

High licensing fees for foreign IP, high appearance fees for foreign DJ’s and high request for on-site effects leads to high operating costs.

High operation costs & poor profitability

On the premise of limited funds, organizers excessively invest in site rental, appearance fee of artists and publicity while neglecting the on-site service experience.

Poor on-site service experience

These festivals are introducing or imitating foreign formats and are generally dominated by Top 100 international DJs which shows the receptivity of the Chinese EDM market to foreign production, but also the weakness of the limited choice of domestic DJs.

The EDM festival industry in China is, however, facing obstacles: for instance, the fragmentary laws and regulations framework and confusing management cause sometimes high risks for the event organizers. Plus, there are often difficulties in site approval and in obtaining investments, the former because of the lack of special site and safety caution of the local governments, the latter because of the lack of mature domestic brands of EDM festivals, and thus investor’s caution. Because of this limitation in funding and the high operation costs and poor profitability (high DJ fees, high requests for on-site effects and publicity fees), the domestic festivals are sometimes neglecting the on-site experience. Finally, as mentioned, the lack of domestic artists forces the festival industry to pay high fees for inviting foreign artists.19

The expectation for the EDM festivals is that the market will tend to diversify in response to the top 100 DJ domination of the scene. Furthermore, the local EDM festivals will start to focus more on the product design of the festival, arranging comprehensive lineups based on the atmosphere of the festival itself rather than on the one of a single DJ. Thus, the domestic EDM music festivals will be focusing their attention on diversifying and catering to specific audiences, creating more brand awareness among the public. Finally, the EDM festivals will tend to become more focused on framing the events from experiences of culture to lifestyle experiences, such as music-themed holidays.19

25

“Anyone who has ever been to a Chinese nightclub can tell

you that even the smaller ones have a level of production that

can run a mid-size festival anywhere in the world.”

Read more on the current situation of the electronic music club scene in China in the following chapter

27

>

“Clubs are very important to the expression of electronic music with their strong beats, their responsive crowds, and the mixing of different people.”

Weng Weng - Lantern Club and DJ

“Anyone who has ever been to a Chinese nightclub can tell you that even the smaller ones have a level of production that can run a mid-size festival anywhere

in the world. The interesting thing is that most of them play the same style of music, usually produced by top 100 DJs and rarely book anyone that is not on

that list and that is precisely the area where I see development happening in the next few years.”

Felipe Zona - Space Plus Club

“Most people go to the club to forget about the stress they have at work, meet new people, and find boyfriends or girlfriends. What they expect from the club is to be overwhelmed by audio-visual experience so that all of these things come naturally.”

Felipe Zona - Space Plus Club“For commercial clubs, the music itself is really the

last thing they think about. Sales come first; how to

sell tables to people, how to make the club look

‘busy’ by having foreigners drinking for free, hiring

actors to attend [...] There is also this show-off

culture, so if they buy a bottle of champagne, it is

not unusual to light fireworks to make a spectacle out of it.”

Rainbow Gao on What’s on

Weibo - Mansion

DEVELOPMENT

China is currently the 3rd biggest market in the world for mainstream commercial electronic music, following the United States and Europe.

In fact, major international DJs are now also touring Chinese rural cities’ EDM clubs which mostly cater for VIP customers, and thus completely change the way in which the promotion and the consumption of the event works, if compared to larger cities.

In the 1990s, with the effort pioneering DJs such as Ben Huang, the first ‘Berlin-Basement-style’ clubs were opened, and the scene started to attract more attention. Later, artists such as Weng Weng and Mickey Zhang started throwing their own parties and founded their own labels, showing that the spread of electronic music was well underway. The audiences of the first electronic music parties, according to DJ Weng Weng, owner of Club Lantern, were actually mostly foreign exchange students and only with time the Chinese young audiences started getting involved. Nowadays, Chinese nightlife is a combination of big commercial clubs and smaller music dedicated venues. China’s underground scenes are mostly active in large Chinese cities. Most of the big cities like Beijing, Shanghai, Chengdu, Shenzhen, Kunming, Guangzhou and Hangzhou now have several nightclubs dedicated to underground genres.8

“China changes so rapidly, it makes you dizzy. The laws, the consumer behaviors, music tastes, etc. I guess part of our success is anticipating these changes, but also being stubborn about keeping an eclectic music policy, and an open to-all inclusive vibe.” Michael - Dada Club

Mainstream clubs to keep an eye on:

• Club Elements (Beijing) - 84th• Catwalk (Guangzhou) - 77th• Club Galame (Foshan) - 75th• Club Myst (Shanghai) - 72nd• SOS Club (Hangzhou) - 65th• 1/3 One Third Club (Beijing) - 60th• Space Plus - 53rd

Source: DJ Mag Top 100 Clubs

28

Underground clubs to keep an eye on:

• Loopy (Hangzhou)• 44KW (Shanghai)• Oil Club (Shenzhen)• .TAG Club (Chengdu)• Dada Club (Beijing, Shanghai)• Lantern Club (Beijing)• OMA Club (Hong Kong)• Echobay Club (Chongqing)• The Social Room (Hong Kong)• Arkham (Shanghai)• School (Changsa)• 61livehouse (Nanjing)• Window (Guangzhou)• Zhaodai (Beijing)• Mono House (Nanking)• Nomad (Chengdu)• Shadow Lounge (Chongqing)• Hangover (Guangzhou)• Guanxi (Chengdu)• Parrotbar (Shenzhen)


China’s streaming market is potentially at a turning point.

Read more on the electronic music streaming market, including the entertainment value of the industry in the following chapter

31

>

STREAMING PLATFORMS IN CHINA

The only Western music streaming platform in China is Apple Music, which entered the market on September 30, 2015. While its presence is growing, its market share is relatively small.

Instead, the three dominant players in China’s streaming market are all domestic: Tencent Music Entertainment (TME), NetEase Cloud Music and Alimusic, together with the streaming portal Xiami. Each of them has one of China's internet/gaming giants as their parent companies. TME, social media & gaming behemoth Tencent; NetEase Cloud Music, NetEase Inc, one of China's biggest gaming companies; and AliMusic, Alibaba, the China’s e-commerce giant. Each of them has seen mergers & acquisitions the last few years making them into the giants they are today.

“With universal streaming, song stem releases, hardware technology, and of course the trend of deconstructing club music and the blur between clubbing and performance art... It's going to be interesting to see where it takes us in the next Decade.” Michael - Dada Club

Distribution of perceived professional quality of music apps w.r.t. electronic music among surveyed electronic music listeners in China (2016-2017)


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

NetEase Cloud Music

Kuwo Music QQ Music Kugou Music Xiami Music


“I'll just name one big challenge that everyone is facing right now, which is the royalty collection. [...] It's extremely difficult for indie labels to protect their rights and stand up against this kind of bullying.” Chang Liu - Pillz Records

TME (QQ Music, Kugou, Kuwo, WeSing)TME was created when China Music Corporation (CMC), who in 2013 obtained effective control over Kuwo and in 2014 Kugou, which was merged with Tencent's QQ Music and WeSing Operations. After the merger in July 2016, Tencent owned an approximately 61% equity interest of CMC and CMC became a consolidated subsidiary of Tencent.20 This merger put TME with its Streaming Portals QQ Music, Kuwo, Kugou, and its WeSing Karaoke App into a dominant position within China´s music streaming market. During his keynote speech at SXSW in March 2019, TME´s VP Andy Ng mentioned of having 800 million active users across all platforms. This came just three months after TME´s December 12th, 2018 IPO which put the Tencent stock on the New York Stock Exchange with a price of 12.81 €/share. The IPO raised close to 999 million € after pricing its shares at 11.81 € apiece, at the bottom of its stated range of 11.81 to 13.63 €. That initial sale gave the company an implied valuation of €19 billion.21

Interesting to note, is that Spotify holds a 9.1 percent stake in the business courtesy of a share swap last year — Tencent owns 7.5 percent of Spotify — which could yet lead to synergies between both sides, although Spotify competes with Tencent-owned Joox(not part of TME) in Southeast Asian markets.1

However, TME is currently (2019) subject to an investigation by China´s State Administration of Market Regulation, according to a Bloomberg report.14This is partly due to the fact that TME is sublicensing the catalog it holds the rights for (i.e. the ones of all three majors, Universal Music Group, Sony Music Entertainment, and Warner Music Group Corp) for a marked up price. This developing situation has the potential to be a turning point for the streaming market in China.

Growth trend of electronic music playlists on NetEase Cloud Music 2016-2017

Source: NetEase Cloud Music internal statistics

2016/9/1 2017/9/1

Total no. of playlists Growth trend

128.1% growth

33

NetEase Cloud MusicAccording to Technode, in April 2017 NetEasebecame the first music service in China with unicorn status after securing €95 million in Series A €98 million financing.3 This put the company’s valuation at €1 billion, four years after its launch in 2013. With this, NetEase Cloud Music rose to become a veritable streaming giant. In November 2018, NetEase Cloud Music, just a month before the TME IPO, raised another €545 million in funding. Strategic partners this time included Baidu, General Atlantic, BoyuCapital, and several other unnamed investors. Then, on September 2nd Music Business Worldwide reported that Alibaba together with the Yunfeng Group invested another €636 million into NetEase Cloud Music.

Ali Music (Xiami, TTPOD)In January 2013, Alibaba Group announced its acquisition of China’s 5th biggest digital music streaming service, Xiami music. Subsequently, Alibaba acquired TTPOD music-streaming app (TianTianDongTing) in December 2013 and in 2015 the Xiami and TTPOD were merged into Ali Music. Key representatives of the music sector Gao Xiaosong and Song Ke, were brought in as chairman and CEO respectively.23 In October 2016, Alibaba Group then announced the formal establishment of the Alibaba Digital Media & Entertainment Group, which also has activities in streaming video, film investment and distribution, online ticket sales and merchandising. It acquired live events ticketing business Damai in March 2017.11 In the newest development, “together with Yunfeng, Alibaba has invested approximately US $700m [€636 million] in NetEase Cloud Music. According to the company, NetEase Inc. will remain the controlling shareholder in NetEase Cloud Music.”26

Once again, it needs to be pointed out, that the numbers one gets on the active users on any of these platforms always have to be analyzed carefully. Just to give one example: the 800 million MAU mentioned by Andy Ng at SXSW, widely differ from the data we get from research firm Trustdatajust one month later: “Kugou and QQ Music maintained their top and second spots as the two most-used music platforms with monthly active users (MAUs) of 109 million and 103 million, respectively, in March. NetEase Cloud Music ranked third with 52.8 million MAUs, followed by Kuwo with 51 million active users.”22

But again: Whatever the numbers, there can be hardly any doubt that this part of the Chinese music industry is also highly dynamic and growing at a rapid speed.

Entertainment and leisure managementIf the digital streaming of music is not a high revenue service for the provider, the live-streaming of musical concerts is instead more remunerative than abroad. This happens because the Western leader for live-streaming, namely Twitch, has an advertising-based revenue, whereas Tencent Music Entertainment’s Music-Centric Social Entertainment Services revolves around the “dashangsystem” , virtual gifts ranging from 0.006 until €128+ of the viewers to the performers. This has proven to be highly successful for pop music phenomena such as TFBOYS.24


However, this dashang system only works for extremely high-level artists, since mid-class artists would never be able to reach the same amount of donations. This happens because the TME streaming services are actually including either the first-class pop artists or aspiring idols building up their fanbase, in total 11% of the actual physical musical market. The rest of the genres and especially the underground artists, included in the remaining 90% of the physical music industry, remain excluded from it.

One entertainment giant which filled this digital gap was NetEase, creating a “niche” social and streaming hub for both international and Chinese alternative artists wanting to be visible in China: NetEase Cloud Music. The brand positions itself as a platform for non-pop music in China and is boasting collaborations with international acts.

However, given its Spotify-like model of profitability, based on subscriptions and advertisements, its revenues are not as much as one would expect. In fact, such streaming platforms models, tend to be not very proficient in China because the consumers are used to a free streaming service and tend to stick to freemium music platform services, as explained in the following chapter. It seems unlikely that NetEase’salternative artists would commit themselves to a possible Tencent-like live-streaming. Thus, a future development of electronic music into the live streaming sector seems highly unlikely; however, the only way for such alternative artists to actually earn out of the current system, would be that NetEasewould succeed in converting the Chinese consumers into paying subscribers thus pushing further the development of the scene.24

“I think labels, especially indie labels

have realized the importance of

integrating streaming platforms and UGC

platforms. For example, Douyin/Tik

Tok is helping thousands of

musicians and their labels expanding

territories and gaining exposure. In a way

that no one had ever expected before. The platforms are offering

a much more cost-efficient way for us to

expose our artists.” Chang Liu - Pillz Records

The combined use of Digital Streaming Platforms and User Generated Content Platforms

(such as Douyin/TikTok) is helping indie labels in gaining

exposure for their artists in a cost-effective way.

Read more on the Chinese music labels and the issues they currently face in the market in the following chapter

37

>

“I think in China, the labels need to take on more

responsibilities in shaping the scene other than

providing the basic services. This is because the local

scenes are still very fragile and young, and there aren’t

yet enough mechanisms that help musicians to circulate

their knowledge, experiences, and views. The

labels need to step up and fill the gap.”

Zhao Yue - Merrie Records

“For upcoming artists, music labels are like wombs and mentors which nurtures and guides the artists to maturity. For

international artists, China may seem like the tempting yet complicated uncharted water, so music labels like Pillz can always give them the best options to develop themselves in

this market.”

Chang Liu - Pillz Records

THE CHINESE RECORD INDUSTRY

The record industry is currently the fastest growing in the market, tripling its revenues from €88 to €264 million in only 3 years.

As mentioned, digital music streaming dominates the market with 70% of its revenues being generated by digital consumption. But paradoxically, the per-capita recorded music revenue is only €0.18, way lower than its Western counterparts and, even with the current Compound Annual Growth Rate of 44%, the forecasts show that China would catch up with the front-runner for the record industry (US) only in 2027.24

Interestingly, these numbers can be explained by looking at the story of music piracy in China, starting from 2011 when a large portion of music downloads were illegal. This went on until 2015 when the government began to enforce music copyrights with “Operation Sword Net”, in which all of the illegal music was taken off the internet in just 2 weeks’ time. By 2018, 96% of consumers listened to licensed music: this means that the consumers got used to have a free of charge service and therefore mostly maintained the freemium service without paying for digital streaming. Because of this specific reason, it is not surprising that the electronic music local record labels are limited in number and scope.24

However, Chang Liu from Pillz Records points out that the combined use of Digital Streaming Platforms and User Generated Content Platforms (such as Douyin/ TikTok) is helping indie labels in gaining exposure for their artists in a cost-effective way. This is according to him a necessary way of promotion since the biggest issue the electronic music labels are facing right now is the lack of funds due to the royalty collection system. He reported that is extremely difficult for smaller labels to protect their rights.5

Recording industry wholesale revenues 2012-2017 (amounts in million euros)

Source: IFPI

72.383.2 87.9

152.0

182.8

264.3

0.0

50.0

100.0

150.0

200.0

250.0

300.0

2012 2013 2014 2015 2016 2017


The local artists often have a difficult time being represented by clubs and festivals, which tend to

favor the big names of international artists in their line-ups.

Read more on the current situation of domestic and international electronic music artists in China in the following chapter

41

>

“We hope there will be more diversity in terms of music and artist selection.”


“A good DJ does not have to be a superstar and there is something more outside of the big list names.”

Felipe Zona - Space Plus Club

“People's tastes are starting to mature in that they are now starting to recognize that top 100 DJs is not that only metric to judge whether or not an electronic music artist is talented. People have also seen the majority of top 100 DJs at this point and are looking for something new. As a result of this, we have seen a surge in label parties to feed this need for variety. Local artists are also getting more clout.”

Steve Dowler - Monstercat

DOMESTIC ARTISTS

In 2018 DJMag mentioned two Chinese DJs (DJ Carta and DJ L) among the top 100 DJs.9

However, there are many more electronic music DJs producing music in China, specializing in different sub-genres. However, as mentioned above, the local artists often have a difficult time being represented by the local platforms such as clubs and festivals, which tend to favor the big names of international artists in their line-ups. This creates a situation in which some Chinese artists remain obscure to the larger public because of the lack of platforms where to be represented.24

“For the past year, the artists with our label who got the most international attention are electronic music producers. I guess in a way it is because electronic music bridges the cultural gaps more easily.” Zhao Yue - Marrie Records


INTERNATIONAL ARTISTS IN CHINA

While China is one of the largest markets in the world, an international artist willing to engage China in live performances still needs a specific advertising and management approach.

This means that an international artist should always have promotion channels on QQ, Weiboand NetEase, to avoid finding themselves out of reach from the Chinese market.24 Over 50 mainstream international electronic music artists and labels started engaging with the Chinese market opened a NetEase account, including names such as Tiesto, Armin van Buuren, Alesso, KSHMR, Steve Aoki and more.27 Furthermore, an artist should be keeping in mind the administrative obstacles to work in the market, which is to say the Chinese officials and the complex local regulations. This happens because any artist touring China should first obtain a performance permit, which is issued by the local officials.

One can be sure that they will have a deep research on the background of the artist applying for a permit, especially if that’s a famous artist. This has direct consequences on the artists’ ability to perform in Mainland China: for instance, for various reasons, artists of the caliber of Lady Gaga and Katy Perry are reportedly banned from performing in China.

Finally, another obstacle to international artists’ access to the Chinese market are customs for the shipment of the tour’s equipment in and out of China, which implies high costs and long waiting times. The actors of the industry itself are actually calling the officials for reforms of the current regulations, claiming it would foster a more globally connected music market.

Starting in February 2019, the Chinese tax office bureau announced that all international artists will have to pay a minimum of 20% tax. This implies a sharp cut to their revenues from the tours, and more specifically, an increased difficulty in setting up tours for artists performing at smaller stages, for whom such tours would then mostly become low-revenue gigs. This, jointly with an announcement that the officials plan on easing the above-mentioned regulations, foreshadows a shift of the focus of these tours from underground international artists to established names of each genre, the only ones for which tours will then be remunerative.24

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There is a growing demand for mastering professional skills

through relevant electronic music courses.

Read more on the development of electronic music curricula, new education institutions and the issues this segment of the

market faces in the following chapter

45

>

“The education period of the electronic music industry

market in China required a tremendous amount of

collective efforts among foreign labels, festivals, and

marketing specialists.”


“In the future, NetEase FEVER A&R team will be able to conduct talent seeking during the process and graduates from school will have career opportunities in Gaming, E-sports, Animation, and Film industry, etc.”


LEARNING INTERESTS

The interest of Chinese EMF for electronic music education is remarkable: 87% of EMF on average claim it is necessary to learn electronic music, and 83% of them claim that they are interested in learning electronic music.

Their interest in this education is mainly to master a skill (33%), becoming more professional through relevant courses (19%) or to learn from the experts (15%). The favorite means of learning is still free videos and courses, such as the 62% of EMF have participated in during the past year; 45% of them have paid for learning electronic music in the same period with an average expense of 495 €/year.19

Attitudes towards learning electronic music


Attit

udes

tow

ards

lear

ning

el

ectro

nic

mus

ic

6%

5%

19%

33%

15%

10%

3%

4%

17%

29%

17%

12%

8%

6%

21%

36%

13%

8%Self-learning

Learn from insiders

Hope to master a skill through relevant courses

Hope to become more professional through relevant courses

Hope to get the qualification certification through relevant courses

Hope to improve professional skills through course learning


“Education is our core business. It is very important to improve the whole ecosystem of the industry by continuously improving the ground work and providing talent to it. Partnering with Point Music School to establish Point Blank China, we are able to introduce top international music education resources to Chinese music lovers.” Sherry Huang - NetEase FEVER


87% of EMF thinks its necessary to learn electronic music

83% of EML claims that they are interested in learning electronic music systematically

91% of EME thinks its necessary to learn electronic music

Electronic music courses EMF have participated in

Free video/courses

Paid video/courses

Courses of training institutions

Courses of professional academy of electronic music

One-on-one courses with a private teacher

Others


15%

9%

17%

18%

21%

62%

EDUCATIONAL FRAMEWORK

In this group of EMF, one can see an evident split between interest-oriented EMF and career-oriented ones. The former EMF are mostly interested in educating themselves to better understand the culture and developing their skills, while the latter want to improve their professional ability and obtaining a qualification certification. As one might expect, EME are more willing to learn systematically and for longer periods of time. With the current shortage of Chinese talents in the scene, in the future, there’s a market gap for collaborating with foreign training schools in creating trustworthy electronic music educational institutions with career-oriented curricula.

However, to establish this field one should create an educational institution with good investment cash-flow to support and foster the development of the local electronic music industry. In order to do so, they would need to be small in size and with only a few students, supported by equipment leasing and performing.19

Since 2019, such training courses are being established in China, as an example, the Point Blank and NetEase FEVER collaboration for DJ training in China.

An obstacle for this development would be the lack of a national certification system for systematic electronic music training, which still needs to be established. Besides these new institutions, more traditional ones, such as conservatories are beginning to set up electronic music educational departments. Good examples are the Beijing Central Conservatory of Music’s electronic music department, China’s Electro-Acoustic Music Centre4 and the Sichuan Conservatory’s Electronic Music Department.25

47

CONSUMERS

FESTIVALS

CLUBS

STREAMING

LABELS

ARTISTS

EDUCATION

51

Consumer and revenue growth can be seen in all segments of the electronic music industry in China, as electronic music now became the second favorite music genre in China. With a majority of Electronic Music Fans (EMF) seeing electronic music as a habit, and 20% of EMF see it as a possible career, the industry is expected to grow exponentially.

The number of electronic music festivals is growing in China, from a registered 32 festivals in 2016, to over 150 in 2018. Though festival promotion in China faces many difficulties such as local regulations, hardships for site approval and obtaining investments, the festival market is expected to grow both in numbers as in diversity in the coming years. Under the motive of tourism promotion, a large number of second, third and fourth tier cities tend to have a welcoming attitude towards electronic music festivals. Festival promotors are more likely to attract local government support (both in policy as in funding) whenever stating tourism promotion as a key objective. This is partly due to the merge of the Ministry of Culture and the Ministry of Tourism, resulting into the ambition to make cultural products beneficial for the development of the tourism industry.

Mainstream electronic music clubs are quickly expanding also in smaller second and third-tier Chinese cities. These remain to be largely clubs with limited dance floor and table service, but are growing in numbers rapidly. Several nation-wide club brands set the tone in terms of innovation and modern-age entertainment in China, with futuristic light shows and performances. EDM is the most wide-spread genre amongst these clubs. Bass and Techno are gaining territory. Underground electronic music scenes are active all over China, yet the underground club scene is considered to be relatively small, with several dedicated underground clubs in China’s first- and second tier cities.

Almost the entire market is divided by China’s largest Digital Streaming Platforms; Tencent Music Entertainment (TME), NetEase Cloud Music and Alimusic. These platforms largely rely either on advertisement revenues, or up-sale other non-music related services to the free-tier customers. As consumer behavior is still in an early transition from freemium use towards premium subscriptions and the conversion between the tow is still in its infancy steps towards a low paying per stream model have been made and the per stream payout is likely to rise in the next years.

According to many industry insiders, electronic music labels active in China are too few and too homogeneous – and can be seen as a missing part in the electronic music eco-system. As artists have limited possibilities to release music and reach larger audiences, it becomes hard for domestic artists to build up a fan base and get booked at larger festivals and clubs, which tend to prefer big international acts in order to attract their audiences. Labels complain about the operational challenges, as revenue streams from recording are limited. Creative use of User Generated Content Platforms helps labels in gaining artists’ exposure.

Several EDM acts have gained recognition both domestically and internationally over the past few years, looking at the entrance of Chinese artists in the DJMag’s top 100. As clubs and festivals are growing in numbers, more DJs have a chance to perform. But, as major clubs and festivals rely on international line-ups, chances to perform at big stages remain limited. Opportunities for artists to stand out and build a fan base, also lie in other market segments, such as in gaming and on User Generated Content Platforms. China yet has to identity an own superstar DJ, which can be a role model and give the entire Chinese electronic music industry another boost.

A growing number of Electronic Music Fans (EMF) see electronic music as a possible career; music production, composition, sound engineering, visual design, digital design etc. This results into a demand for electronic music courses and educational institutes. Several conservatories announced an electronic music department, but also for the private sector there is an opportunity to build infrastructure for this demand.

BHM (Shenzhen Brotherhood Music Culture Media Co., Ltd) is widely known for investing, operating and promoting the International IPs CREAMFIELDS (Europe’s Top-3 EDM festival) and Q-DANCE (World’s largest hardstyle EDM music festival brand) in China. In addition, BHM runs the domestic IPs LICHT, SHOCK and REBORN Festival, while also having established it 360* artist management and booking agency B.E.A.M and operating a 3.000 cap venue named RB755 in Shenzhen. Next to participating in over 20+ Festivals all over China and 150+ club shows in 30+ Chinese cities, BHM is also involved in music festival integrated marketing planning, stage & show production design and International artist management services. All with different International and domestic partners and following a clear vision on fully creating a local electronic music culture ecosystem.

BHM

Mai Ai Culture Communications or shortly Mai Ai, is a Beijing-based multimedia company focused on electronic music with a broad strategy to develop today’s dance scene and lifestyle for young generation. It consists of five business pillars—— event & festival production, music publishing, artist management, music education, and technology. Leading artists of Mai Ai include YUAN, the most influential producer and singer in China, has achieved more than 1.5 billion plays and 5 million fans. The most prominent brand is the INTRO Music Festival, a local festival founded in 2009, that has gone international with editions in The Netherlands and Mongolia. As the leading representative of China's electronic music industry, Mai Ai has been the official travel partner of Tomorrowland for three consecutive years.

MAI AI

China Minsheng Cultural Media Development (CMCM) is an innovative enterprise with focus on urban cultural development, and has its expertise in full-experience event production and management. Located in Sanya, the southernmost city of China, CMCM has hosted two editions of its own music festival brand "ISY Music Festival", and has attracted 180,000 attendees and generated over 2.7 Billion RMB of the city consumption. Apart from ISY Music Festival, CMCM has also hosted the 1st edition of Haikou Volcanic Festival and the 1st Hainan International Film Festival in December 2018. Besides growing its above-mentioned festivals to be bigger and better, CMCM has other exciting projects, including a 330-acers music theme park and Hainan International Science and Technology Exhibition in the long-term development strategy. CMCM will take the opportunity of combining its festivals and the theme park to build the province of Hainan to a world-known festival destination.

ISYMUSIC

FESTIVAL

VAC represents a mega brand for electronic music in Wuhan. Vision & Colour Music Festival is a large outdoor electronic music Festival. It is facing to electronic music lovers globally. World’s most popular DJs and top producers will be invited. VAC Infinity is a large indoor electronic music Festival. Infinity is celebrated for its own theme and multitudinous types of Music. Also, stylized DJ’s and producers lead the new fashion style for Asia Music Party.

VACMUSIC

FESTIVAL

This report is an initiated by House of China. House of China is a collective of leading forces in the Chinese electronic music industry and an initiative that connects dance minded people from China with the international scene and vice versa. It aims at building a stronger Chinese electronic music industry by making connections between all parts of the Chinese scene. Both geographical connections, and inside the scene itself between the mainstream and the underground. During the 2018 and 2019 editions of Amsterdam Dance Event (ADE), House of China organized the official China related conference program of ADE.

In collaboration with NetEase FEVER. NetEase FEVER is an electronic music brand launched in 2018 by NetEase, Inc. (NASDAQ: NTES) dedicated to delivering top quality music content and experience to Chinese users as well as to create a well-established electronic music ecosystem in China with diverse business units including Electronic Music Events, Music Education, Artists Management, Crossover Collaboration, Customized High-end Electronic Music Tour etc. Partnering with Point Blank music school, we now have China’s first music production and DJ education school of it’s kind in Hangzhou International Expo Center. Holding exclusive co-management rights of DJ mag Top100 duo W&W in China territory and in the future, FEVER will develop more management rights of international DJs and the worldwide management rights of local talents.

And with the support of House of China’s other Presenting Partners (in alphabetical order):

HOUSE OF CHINA

NETEASE FEVER

53

ACKNOWLEDGEMENTS

SOURCES

54

A special thanks goes out to the people that supported this research:

Angelina Si, Bram van Ravenhorst, Ellen Zhang, Felipe Zona, Chang Liu, Michael - Dada, Mickey Zhang, Paul Neuteboom, Peipei Xun, Peter Donaldson, Philipp Grefer, Scarlett Li, Shao Yanpeng, Sherry Huang, Steve Dowler Toby Benson, Weng Weng, Yang Bing, YawenMaggie Luo, Celia Yu, Zhao Yue, Ali Akbar Sheikh

Project leader:Michiel Roosjen

Written & Edited by: Philipp GreferMichiel RoosjenGiovanni Bottacini

Team House of China:Michiel RoosjenMartin van de VeldeLucas JansenMike Ravelli

1 AMENDMENT NO. 1 TO FORM F-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933. Tencent Music Entertainment Group. Accessed September 25, 2019. https://www.sec.gov/Archives/edgar/data/1744676/000119312518340313/d624633df1a.htm.

2 Baidu. “LiveHouse 2017 Live Music Revenue of 4.857 Billion Yuan Rose 51%, How Live Music Makes Money,” Baidu, July 28, 2018, https://baijiahao.baidu.com/s?id=1607248208672309870&wfr=spider&for=pc.

3 Borak, Masha. “Top 5 Chinese music apps in 2017.” Technode. June 23, 2017. https://technode.com/2017/06/23/top-5-chinese-music-apps-in-2017/.

4 Central Conservatory of Music. “China’s Electronic Music Centre Introduction,” Accessed September 24, 2019, http://en.ccom.edu.cn/academics/cemc/introduction/200803240043.shtml.

5 Chang, Liu. “Pillz Records.” Interview by Giovanni Bottacini. September 25, 2019.

6 China Audio-Visual Copyright Association, www.cavca.org/.

7 Chinese Musicians Association and the National Copyright Administration of China, www.ncac.gov.cn/.

8 de Boni, Luka. “The Rise of Chinas Electronic Dance Music Scene From Underground Culture to Online Communities.” What’s on Weibo. August 26, 2018. https://www.whatsonweibo.com/the-rise-of-chinas-electronic-dance-music-scene-from-underground-culture-to-online-communities/.

9 DJ Mag. “2018 Top 100 DJs.” Accessed September 19, 2019. https://djmag.com/top-100-djs/poll-2018-carta.


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10 Farrer, James and Andrew David Field. Shanghai Nightscapes: A Nocturnal Biography of a Global City. Chicago: University of Chicago Press, 2015.

11 Frater, Patrick. “Alibaba Seeks Management Integration in Digital Entertainment.” Variety. May 16, 2018. https://variety.com/2018/digital/asia/alibaba-management-integration-in-entertainment-1202812548/.

12 Grefer, Philipp. “Disco(s), Techno & The EDM Storm — A brief (& personal) history of electronic music in China,” Medium, October 28, 2016, https://medium.com/@philippgrefer/disco-s-techno-the-edm-storm-a-brief-personal-history-of-electronic-music-in-china-f31743e8dc05.

13 Hu, Cherie. “State of China's Recorded-Music Industry, As Seen Through One Of Its Quietest Yet Most Powerful Companies.” Billboard. June 2, 2019. https://www.billboard.com/articles/business/8496661/outdustry-china-recorded-music-industry-challenges-streaming.

14 Huang, Zhepin, and Lucas Shaw. “Tencent Music Dives as Watchdog Probes Its Record-Label Ties.” Bloomberg. August 27, 2019. https://www.bloomberg.com/news/articles/2019-08-27/watchdog-probes-tencent-s-grip-on-china-s-giant-music-industry.

15 iResearch China. “China's Digital Music Market Will Face A New Round of Competition,” April 12, 2019, http://www.iresearchchina.com/content/details7_53675.html.

16 Michieletto, Chiara. “China’s music potential: ‘We are finally getting there!’ ,” Musically, May 22, 2018, https://musically.com/2018/05/22/chinas-music-potential-we-are-finally-getting-there/.

17 Music Copyright Society of China, http://www.mcsc.com.cn/.

18 Music Copyright Society of China. “Annual Reports,” Accessed September 24, 2019, http://www.mcsc.com.cn/EIm-32.html.

19 Nielsen. Commissioned by NetEase FEVER. Insight Into Chinese Electronic Music Industry.

20 Russel, Jon. “Tencent Music, China’s largest streaming service with 800M users, files for US IPO.” TechCrunch. October 3, 2018. https://techcrunch.com/2018/10/02/tencent-music-ipo/.

21 Salinas, Sara. “Tencent Music ends its first day of trading up 9 percent.” CNBC. December 12, 2018. https://www.cnbc.com/2018/12/12/tencent-music-ipo-tme-stock-starts-trading-on-the-nyse.html.

22 Shen, Jill. “NetEase Cloud Music partners with Nippon Columbia, targets high-end users.” Technode. April 19, 2019. https://technode.com/2019/04/19/netease-cloud-music-nippon-columbia/.

23 Shen, Xiaobai, Robin Williams, Shufeng Zheng, Yinliang Liu, Yixiao Li, and Martina Gerst. “Digital online music in China – A “laboratory” for business experiment.” Technological Forecasting and Social Change, vol. 139, pp. 235-249. https://doi.org/10.1016/j.techfore.2018.10.022.

24 Soundcharts. “China Music Industry Analysis, July 2019: Recorded Music, Music Publishing & Live Events.” Accessed September 20, 2019. https://soundcharts.com/blog/chinese-recording-market-streaming.

25 Sichuan Conservatory. “Electronic Music Department,”, Accessed September 24, 2019, http://www.sccm.cn/department/index.asp?id=25.

26 Strassen, Murray. “Confirmed: Alibaba Buys Stake in NetEase Cloud Music in $700M Deal.” Music Business Worldwide. September 6, 2019. https://www.musicbusinessworldwide.com/confirmed-alibaba-buys-stake-in-netease-cloud-music-in-700m-deal/.

27 Wang, Jessie. 2017 Electronic Music Market and NetEase Cloud Music EDM Development Report.

28 Yu, Xiao. “Report: The Development of the Chinese Music Industry is ‘Smartifying’ How to Support it?.” ChinaNews. December 19, 2018. http://www.chinanews.com/cul/2018/12-19/8706823.shtml.

29 Zhao, Yue. “Merrie Records.” Interview by Giovanni Bottacini. September 25, 2019.


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