Live Music OpportunitiesChina 2009

2004 Whitney Houston, Hanson, Backstreet Boys

2005 Norah Jones

2006 Black Eyed Peas, Rolling Stones, James Brown, Juliet Lewis

2007 Ziggy Marley, Roger Waters, the Roots, Sonic Youth, NOFX, Faithless, Ozomatli, Talib Kweli, Linkin Park, Beyonce, Avril Lavigne

2008 Kylie Minogue, Kanye West, Bjork, Incubus, James Blunt, Celine Dion, Avril Lavigne (6 Cities), Harry Connick Jr., Kenny G, Hard Fi, Maroon 5, Backstreet Boys

2009 Jose Gonzalez, Oasis (April)

HISTORICAL - CHINA

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10

20

30

2004 2005 2006 2007 2008 2009(est)

Year

Number

Number of high profile international artist showsFestivalsExpon. (Festivals)

INFRASTRUCTURETHE OPPORTUNITIES • Venues - stadium/ arena/ mid/ small• Equipment• Technical operatorsWHY• Lack of knowledge amongst local companies• Venues have all been “vandalized”RISKS• Opaque rules/ regulations• Lack of IP protection• Fast learnersMAJOR PLAYERS• Chinese government via semi-privatized mgmt companies• Shanghai East • AEG (emerging)• Norwest Audio• Impact | MRT | 3bm Events (lighting) | Winly | Gongti | WJX

MEDIA

THE OPPORTUNITIES• Huge opportunities across all Media ChannelsWHY• Lack of interest in anything that doesn’t pay: immediately• Lack of competition creates a void of creative reportage• Social networks and communities taking up the slackRISKS• Tightly controlled sector• Social communities (UGC) expensive to maintain and hard to sell• Will need significant upfront investmentMAJOR PLAYERS• InMusic (formally Rolling Stone)• Timeout• Douban

AGENCY/ MANAGEMENT

THE OPPORTUNITIES• Huge opportunities in Artist Agency and Management

WHY• Lack of industry professionals in China• Potential to represent/ nurture young Chinese talent/ interested

international talent

RISKS

• Setting up an officially recognized agency is complex

• It will be hard to reap rewards after a certain level of success for Chinese artists

MAJOR PLAYERS• Huaiyi Brothers

• Emperor Entertainment

• Poly Group

TICKETINGTHE OPPORTUNITIES• Average opportunities in ticketingWHY• Many indigenous players• Massive competition• Strong government tiesRISKS• Scalpers• Counterfeit ticketsEXISTING MAJOR PLAYERS• Ticketek• MyPiao• Emma Ticketmaster• Piao

TOURINGTHE OPPORTUNITIES• Huge touring opportunities in Mainland China (and beyond) WHY• Over 130 cities with a population of over 1m• A growing love of music/ art/ entertainmentRISKS• Underdeveloped/ non-existent infrastructure• Uncertainty as to direction live music will take• Unsupportive media• GovernmentMAJOR PLAYERS• Split Works• Ticketmaster / Live Nation• Many Chinese operatives • Small individuals

FESTIVALSTHE OPPORTINITIES• Reasonable Music Festival opportunities existWHY• Festivals are sprouting up all over the country• At least 10 festivals in 8 different cities during the October holiday, 2008RISKS• Large, outdoor event strike fear into every official heart• Chinese kids prefer to hang out online• WeatherEXISTING MAJOR PLAYERS• 13th Month• Split Works• Modern Sky• Midi Music School

SPONSORSHIPTHE OPPORTUNITIES- Brands are increasingly looking towards entertainment as a way of diversifying their offeringsWHY- There is a paucity of events/ platforms worth associating with- TV is no longer the only way to reach the people. GenY and Gen0 are more sophisticated consumersRISKS- Unrealistic expectations: “I want Coldplay and U2 and I have US$300k”- Lack of IP protection: Brands harvest ideas and give to cheap Chinese execution agencies- Budgets reduced in face of global downturn- Resistant brand managersEXISTING MAJOR PLAYERS- W+K- Split Works- Auditoire (TBWA Group)- APAX (High End)

FURTHER INFORMATIONFeel free to contact me and I will do my best to

point you in the right direction.

ARCHIE HAMILTONMD - SPLIT WORKS CHINA

ah@spli-t.com+86 13671656904