The beginning of May each year marks the start of the festival season in Beijing. During the 3-day May holiday in China, Beijing is host to a number of cultural events, from live music, theatre, and visual arts.
This past May holiday I spent three straight days at Modern Sky’s Strawberry Music Festival. Modern Sky is one of China’s most successful and pioneering independent music labels. They have, over the course of over 10 years, built a portfolio of some of the most influential, original and popular Chinese indie bands. The Strawberry Festival is an assembly of many of Modern Sky’s own bands, plus a number of international music acts. This was the second year they’ve done the Strawberry Festival, billed as a ‘Folksy’ music and art festival. And indeed it was.
I attended with my partners at China Youthology. As we took in the entire experience, we made many observations. Here are some snippets of what we discussed:
1. The music scene is alive and kicking, and in a big way that only China can do. The most obvious observation is the sheer number of people attending these festivals. While it does not compare to the reportedly 500,000 people that showed up to Woodstock, the Strawberry Fest had about 20,000 to 30,000 attendees each day for 3 days. Some people may scoff at Strawberry Fest’s paltry numbers when compared to Woodstock, but here’s an extra detail: Strawberry Fest was only one of three music festivals going on in Beijing simultaneously during that long weekend. Each of the other music festivals MIDI, Ditan also had thousands of attendees, and in MIDI’s case, tens of thousands of attendees like Strawberry Fest. For a country where to many foreigners the only image of mass public gathering also involves tanks to suppress, having three outdoor festivals with tens of thousands of participants is no small feat.
2. Strawberry v. MIDI: Shifting cultural tastes. MIDI is a hardcore punk rock and metal music festival. It has been the premier music festival in Beijing for over ten years. Strawberry, an Indie-pop, music and art festival, emerged just two years ago and has already equaled if not surpassed MIDI in numbers. What does this say about the changing tastes of Chinese youth? Or perhaps more insightfully, are we seeing a new wave of young people discovering the music of their generation, in juxtaposition to the music of the youth that preceded them? Even while at the music festivals, we met many patrons who would swear by one of these festivals while shunning the other. It is clear that Indie-Pop, with the free-flowing hippy fashions, funky retro-electro-rock influences, and geeky, cute, graphic designs are on the rise, while Angst-Rockers, black shirts, and grunge may have an uncertain future. Only successive music festivals will reveal.
3. Rising quality: It was immensely impressive the quality displayed by some of the bands. Aside from the fact that a number of the bands are multi-ethnic, these contemporary Chinese indie bands are showing an intense exposure to world influences. They are incorporating innovative elements that define the best of world-class musicians. These bands are also exhibiting a refinement in sound quality and production that only comes from long experience touring overseas. Indeed, many of these groups have toured Europe, North America and other important musical melting pots, multiple times. They come back with best-in-class musical standards. One aspect that surprised me the most was the large majority of original songs by Chinese indie bands that are all written and performed in English. In contemplating why this is, I could think of two reasons: 1) The bands are so highly influenced by international music standards that they are creating, processing original music in the same language, 2) The bands are strategic-enough to expect their music has the ability to cross over to other international markets, thus making English songs would improve the probability of success exponentially. I think the reason is a combination of both, but I’d like to believe it is the former that drives this phenomenon.
4. Performance-ship: Another outcome of Chinese bands touring abroad is that their performances become more sophisticated. Understanding the power of audience interaction, the best bands are intimately conscious of their performance. They understand their performance experience is intricately related to their brand. From costumes to props to audience participation, Chinese bands are creating interactive experiences with their patrons never seen before in China.
5. Commercialization: Strawberry Festival was also impressive because of the strides it took in commercialization. While there wasn’t any new commercial inventions, the pervasiveness of commercialization within the festival was impressive. From Volkswagen cars enjoying product placement on the performance stages, to a fully-branded vodka bar beside the electronica stage, sponsorship and product placements were fully optimized at every opportunity. What is more though, it was not overbearing or intrusive to the experience, in fact, all the attendees accepted the brand presence and took it as part of the identity of Strawberry Fest. What does this say about the Chinese and their acceptance and embracing of brands as an integral part of the cultural experience? I think many marketers and media specialists are thinking actively about this question today.
6. Creating shared collective memories: Perhaps the most important take-away from these cultural festivals, in their size, experience and novelty for this young generation, is that they are creative key milestones of shared collective memories. Sooner or later some of the youth that attended these events will realize, recognize, or characterize some aspect of the experience and it will germinate into an artifact of this generation’s identity. What this artifact will stand for, what it will mean for the constituents at ascribe to this generation, and what it signifies for everyone else, is the job of researchers and anthropologists. Much like Woodstock, Beatle-Mania, or Elvis on national TV, it is these events and experiences that are happening right now, molding the mindsets and perspectives of China’s youth.
7. Cultural trends, nuisances, icons will start here: If these festivals continue, you’ll see that these events will be the genesis for new trends, icons and generational habits. The Strawberry Festival invites and encourages an open market where independent shop owners, artists, and aspiring entrepreneurs can set up shop to sell and exhibit their wares. This year we already saw white ‘Jabawaki’ style face mask become virally popular. I can foresee that as these festivals and markets grow bigger, the markets will become just as important if not perhaps more, than the musical performances. Certainly for trend watchers, the markets may be where the real insights will be.
Of course, this is all dependant on the government’s good graces in allowing these mass congregation of young people continue to happen. It is always a risky endeavour, and China’s track record with these kinds of events has been haphazard to say the least.
So is Strawberry Festival China’s own Woodstock. It could be. Or perhaps more accurately the whole consortium of festivals together, their compounded effect on this generation, could be the beginning of an experience that helps anchor a generation’s identity and provides a place for new generational artifacts to emerge. If you haven’t yet been to one of China’s music festivals, maybe you should thinking about coming next time. If you missed America’s Woodstock, make sure you don’t miss China’s.
Update: Archie from China Music Radar wrote a wonderful post on the music festivals as well, draw different conclusions. I encourage you to read his post. I understand there are a lot of people with differing points of view, especially on such a passionate subject such as music. I say, Good! Lets keep discussing and debating!
As most of you know, part of my blog is dedicated to reviewing Jazz music as it is one of my passions in life. Naturally as a business professional and entrepreneur, the restructuring and transformation of the music industry is something I monitor closely and ponder often. As I attend music festivals and concerts, the question of commercial music’s future viability is foremost on my mind.
Music will always be an integral part of our lives, in one form or another. The quality, creativeness, beauty, authenticity and relevancy of Music is not at risk nor now being called into question. However, the commercial model that has supported the music ‘industry’, and the channels, players, and processes that have been in place to provide us the music we love, are all going through major flux.
To better understand where the Music industry is going, here are some generally accepted Facts & Trends:
1) Digital music is here to stay
2) Free & instantaneous sharing of music is here to stay
3) Because of points (1) and (2), the competitive price for owning/storing/listening to recorded music in any format is fast becoming $0.00, and the general public is accepting the idea of “Freemium” as the norm.
4) Because of point (3), the largest portion of the Music Industry’s revenue pie being reduced to zero, and as a result there is heavy consolidation as existing players try to find new avenues to monetize music.
6) There continues to be demand for ””Mainstream”” and popular music, especially in the social age groups where music & fashion plays a more critical role (between ages 12-22). Mass broadcast media like TV and Radio will continue to remain, but music consumption will continue to hyper-fragment with ever-more new media channels bringing greater exposure to independent and niche music genres. The idea of mainstream & popular music may wane as social groups become more complex and are less defined by the style of music the group identifies with.
What is under threat?
As the business around selling recorded music become obsolete, here are some areas that are coming under threat:
a) Album art/artists
No Albums, no album art. While I love the tactile experience of buying whole albums, looking at the album art and reading the album material, I have to admit that these features will soon disappear. While music artist websites will thrive and house information about the artist & music, artwork will fall by the wayside as it is not essential. Creative photography and good Photoshop will be all that is needed.
b) Music Labels
Contracts and relationships based on management & production of an artist”s recorded music in exchange for a percentage of the proceeds from the sale of that recorded music is not going to work anymore. Music Labels must transition to the management of other aspects of the artist””s career that has more moneymaking potential. These opportunities will be discussed in the next section.
c) ”Superstar” producers & music/album consultants
I am not saying that music producers will become obsolete, far be it. However, ‘Superstar’, celebrity-status producers will become exceedingly rare, simply because the economics of supporting these individuals is disappearing. Quality music producers do wonders for a music artist, but the future payoff of being a producer is in jeopardy and will continue to fall as their income will need to be derived from something other than recorded music sales. As the Internet is now providing more ways for collaborative producing simultaneously from around the globe, old barriers to entry for a producer that had helped to prop up producer fees – such as location and scarcity of expertise – are becoming less relevant.
d) Big-Budget Music videos
The MTV Generation was born with Michael Jackson’s ‘Thriller’ music video. Coincidentally, the death of the music-video-watching culture is also marked by Michael’s recent and unfortunate passing(2)(3)(4). Big budget music videos are a feature of the past for a number of reasons: 1) There is decreasing demand and dwindling viewership for music videos. This can be seen from the type of non-music video content that now occupies the majority of MTV’s timeslots. Viewership is decreasing as music consumption and music discovery proliferate to different media channels. 2) As seen with ‘Superstar’ producers, there is less money in the industry to be spent on costly & lengthy video productions. 3) The use of computer graphics will increase in Music Videos as the lower-cost and broadening availability make it first choice among music artists.
e) Ultra-wealthy music artists
The last few decades have been littered with memorable celebrity-music artists who are known just as much for their flash and spending power than for their music. Think Michael Jackson & his Neverland, U2, The Rolling Stones, Paul McCartney; think of a whole subculture that grew up with the idea that the only ways to become rich were by playing in the NBA or becoming a rapper. Flashy music artists like Jay-Z, Eminem, Kanye West, Dr. Dre, 50 Cent and P. Diddy canonized such ideals of a lucrative music industry. However, the high number of exceedingly wealthy and extravagant musical artists – star pop recording artists who made all their money from selling recorded music – will become rarer as the industry moves forward. “Artists walk in to his office, who used to make $300,000 to $500,000 a year in royalties from selling recordings. And now that’s diminished to less than $50,000 a year.”
While we will still have musical pop stars, fashion & social icons that will define subsequent generations, these people will not derive the majority of their wealth and income from their music. Most likely they will be signed, early on, to a multi-media production company & talent agency where they will be trained, branded and promoted to the mainstream through many channels. Disney’s Hannah Montana star, Miley Ray Cyrus, as well as the lead performers from Highschool Musical are valid examples of this emerging business model. Certainly, being ultra wealthy by being a pure musician will no longer be a viable dream.
f) Recording Studios
Recording sound quality is still a bottleneck, albeit a widening one. A local function, the recording studio will still be around supporting a local industry of sound recording technicians. However, time and technology are not on their side. As technology continues to improve and prices continue to fall at an inverse rate, the professional recording studio has pressures to eventually become obsolete. The barriers to entry to offer professional recording services (the barriers are mostly technological and operational know-how) are all lowering.
There is no area I am more concerned about than the future of Intellectual Property (IP) for music. If the protection, management and monetization of Intellectual Property is unable to transition with the Music Industry, it will have permanent and crippling negative impacts on the industry. By Intellectual Property I do not mean the ‘rights’ of free sharing of recorded music. That IP has already been nullified. ASCAP (The American Society of Composers, Authors and Publishers) and its worldwide affiliate organizations, are responsible for finding a way to pay for the Composers, Authors and Song Writers whose contributions behind the scene are the foundation of music. If ASCAP cannot find new ways of tracking and charging for the use of the materials it manages, in a free-sharing, digital world, being a song writer will no longer be a sustainable profession, and the music cannot go on. What singer can sing without lyrics, or a composer? They are essential pieces to the puzzle. Perhaps some music performers can hire an entourage of personal songwriters and composers to their staff, but how many music artists can afford that?
The other problem facing ASCAP is one of economics and Game Theory. An over supply of poor musicians and even pooerer song writers will continue to push royalties down on existing monetizable rights. When you consider the growing music industries of other developing countries, where there are an increasing number of non-ASCAP members, lead by non-US music creatives, the law of numbers can help you extrapolate that eventually the American-led ASCAP business model may become obsolete.
Where are the Opportunities?
a) Tour coordinators/managers/companies
So if music artists can no longer sit back and sell CDs to make money, how can they? Get up and sell some concert tickets. People seem to forget that before the era where most of the money was made from selling records, musicians made most of their money doing performances. Musicians would be on the road perhaps 300 days per year, doing live performances. It is only a recent phenomenon that musicians could record an album, sit back and let them sell, and ‘choose’ if and when to go on tour.
If music artists need to return to the road, return to live concerts to make the bulk of their money, then the ancillary services like tour coordinators, tour managers, and tour companies, may have some room to grow.
b) Media consultants, Music distribution specialists
With the rapidly diversifying new media landscape, musicians can hardly keep up. Like all creative industries, let the talent focus on what they do best: perfecting their craft. In this case, let musicians make music. Then let the professional marketers and agencies do the rest. If giving away recorded music falls under the umbrella of marketing, then professional media consultants and music distribution specialists will be needed to help artists maximize their exposure to their target listeners. This role can be an amateur individual helping out one artist, to a professional working for a large music group handling multiple music artists. A great growth area for Music Labels.
c) Music discovery services/products
As music becomes available from many different channels, and we wean ourselves off of single-broadcast channels like Music Television and Radio, we will be overwhelmed by the depth & breadth of music variety out there. To make sense of all the noise, we need better music discovery services/products. A lot of companies are already trying to capture this field: Last.fm, Pandora, iTunes, to name a few of the big ones. There are wonderful specialty services such as Musebin and NeochaNEXT Player. Regardless how this market plays out, it is extremely lucrative on the basis of social networking, ecommerce, and advertising.
d) Individual Artist Management & Talent Agent
With ‘the business’ moving from music sales to all sorts of other revenue streams, management will be less about the management of the music and much more about the management of the talent. This is one of the areas that Music Labels can consider moving into. A professional talent management agency would be able to consolidate a number of functions becoming increasingly important to the success of the artist. This can include putting together and coordinating tours, having a media management division, setting the artist up with different music producers and musicians, and helping the artist find endorsements or develop beyond a music artist. Most importantly, a talent management agency should be consciously building its talent’s personal brand, and executing high-reach, highly effective PR campaigns. A good talent agency will craft its artist’s image from the very beginning, consciously identifying fan bases, pinpointing locations with a high-enough concentration of fans to put on a concert, and molding the talent into an identifiable icon. Revenue for the management agency then comes from multiple streams: management fees, a cut on endorsement deals, a percentage take on ticket sales, and rights to merchandising.
e) Sponsorships & Endorsements
Artists will start looking more favourably on corporate sponsorships as they look elsewhere to diversify their revenue streams. As touring increases and artist branding intensifies, the attractiveness of artist sponsorship in exchange for corporate association with the music artist will rise. It may be a strange idea for us to imagine today, but do not be surprised if one day in the near future, it is the norm to see music artists sporting clothes and logos of their sponsors. Just as Tiger Woods wears and uses all things Nike, so will you see the same for successful music artists.
Sponsorships will go beyond the individual artist. We will see more festivals and tours being headlined by a corporation seeking to build brand recognition and association to a certain target group. In these ways the music business will be able to tap into the much larger pool of Corporate PR & branding. “Selling Out” will no longer be valid, it will just be reality for the industry.
f) Sound Recording & Sound Editing Equipment & Services
Technology will continue to offer growth opportunities for music. As mentioned earlier, local professional sound recording studios and technicians are currently a bottleneck, but that competitive edge is fast eroding. As technology enables cheaper, better quality sound recording & editing equipment, price & production will hit a tipping point that will render sound studios mostly obsolete. Artist will then be able to self-record high-quality music, fully edited and produced, and disseminate the music for free as a form of marketing to gain a fan base. With simultaneously improving video recording and editing equipment, self-produced, innovative music videos will also be available for distribution. No longer will we only have low-budget amateur music artists showing themselves to the world YouTube style, it will be a whole different experience, and a social experience at that. Those in the business of digital sound recording & editing have a lot of potential to make huge waves in the music industry.
g) Open-source producers, Open-source artist collaboration
Mentioned above we discussed the demise of the ‘superstar’ producer. The growth opportunity for this field is the new practice of ‘open-source’ producing and music collaboration. These Open-Source initiatives are already underway, with projects like Kompoz, Musicollaborate, and The Net Studio. They are effectively removing the barrier that was locality, and have released expert and best standards producing power to the entire globe. Now a ‘superstar’ producer can be working on multiple songs for multiple artists from multiple continents. Music artists and/or management agencies will be able to seek out, commission, and pay for, the producing of music to anyone in the world as it sees fit. I genuinely hope we get on average better music as a result.
h) “Exposure” tours/festivals
Unlike musical-genre festivals like Lollapalooza, and Jazz Festivals, or tours & concerts performed by music idols, we may expect in the future to see the rise of a third style of tour/festival, something I’d like to call an “Exposure” tour. An Exposure tour is a show/concert featuring a medley of different bands or musical artists, each singing only a few songs each. In this way the audience gets a to hear a greater number of musicians. Conversely, an Exposure tour allows a number of lesser-known artists, who may only have a small or medium-sized following to band together and pool their fan bases to build a large enough audience for a profitable concert. This tour format was in fact heavily used in the 40’s through to the 60’s, and is still in use today by touring groups of yesterday’s favourite pop-stars in Hong Kong and other parts of Asia. With tools like SNS application iLike that can track pockets of fans in far-flung cities, a shrewd tour company/talent agent could gather a number of emerging artists who share similar fan bases or music genres, and piece together an Exposure tour. It is a great way for the artists to make some money, gain touring experience, and acquire new listeners who come to the concerts for other participating artists.
A message for music artists
Music Artists, you have to learn how to self-promote, be media savvy. For now, try to make as much money as possible by still selling music. Eventually though, you will be forced to give music away for free as an essential part of your marketing. But track where listenership grows, be active in the communities that emerge around your music, and perhaps sell higher-end ‘premium’ content like music videos or even online interview/chat sessions. Eventually, when the demand for your music is large enough, begin planning concerts and join festivals. If lucky and with the right numbers, you can have a professional talent management company represent you, help you promote and manage your media, build your brand presence and disseminate your music. Then focus and work hard on your music, but never forget that your revenue will likely come from a variety of different sources, so be open to trying new things!
The above Opportunities & Threats are related primarily to the North American and Popular Music markets. In Asia, musical taste maturity, musical diversification & sophistication still need time to develop. Media channels and the societal/cultural need to develop better national ””popular music”” still has strong and growing demand in Asia, and will therefore perpetuate the old model. Sound recording technologies, even if/when the prices come down, will still be too high for the purchasing power of Asian music artists. The large income disparity still being experienced in Asia will make self-recorded music lag behind North America, in quality and volume, still for some time. But, as Asians have proven that their ability to copy foreign innovation is uncanny, I hope that Asia can follow quickly in the steps North America is taking in the new music economy. I have a suspicion that, as a result of it’s numbers, Asia will be able to innovate new business models unreasonable or unsustainable in the North American market.