Mapping China: Music - Trends & Partners: Capital Investors

Festival organizers such as Modern Sky (Strawberry, Tuborg Greenfest), Evergrande, Tree Music (Moma) and A2Live (Budweiser Storm), but also venue owners such as Mao Livehouse, music streaming platforms such as KK Box and Xiami, and music-oriented video streaming platforms such as YY and LeTV have recently attracted substantial capital investments. These investments are earmarked for building up positions, usually in anticipation of a launch on the stock exchange. Building up positions in turn includes signing artists, signing licensing deals, setting up new digital platforms, and opening live houses. In other words, over the last five-odd years capital investments started affecting the whole chain of music production and consumption, which becomes even more obvious if we define international promotors such as Livenation and AEG as investors in the Chinese market.

In other words, the music industry finally became attractive to investors. Only a few years ago state-subsidized investment funds with the task of boosting the cultural and creative industries complained about the lack of fundable music-related companies, and in 2014 one of them invested 100 million in Modern Sky (“PRC Cultural Investment Funds”). On the rumor of a successful case (music festivals) and the promise of China’s economic growth, money flows into the music scene, part of which ends up with actual musicians.

However, cynical insiders argue that this trend is not sustainable. There’s even a danger that it disrupts the emergence of a healthy music market. Beefed-up newcomers force established music companies to join into an arms race for market share and shows of strength, which makes life harder for smaller companies and venues. These smaller companies are not interesting for investors, but may be more in touch with audiences and the music scene. Additionally, investors might lose interest as soon as other industries start picking up again.

On the other hand, all over the world there have been so many cases of the entertainment scene being funded by state subsidies and wealthy Maecenas (sometimes of questionable backgrounds) that it’s almost normal. In the end I’m cautiously hopeful. China’s overall top-down attitude of ‘build it and they will come’ has resulted in absurd situations—for instance scores of white elephants including underused stadiums, theaters and operas (see “Infrastructure Projects”), and a range of opportunistic but unrealistic music festivals such as the one-off Big Love 大爱Festival in 2012, and Ting Dong 听懂in Beijing’s over-sized Workers’ Stadium with the Far East Movement, Hardwell and Dash Berlin in 2013 and Sander van Doorn and Sky Blu (LMFAO) in 2014. The latter festival shows the absurd naiveté – two thirds empty stadium, predominantly foreign audience – and also the ambition and well-connectedness of the organizers – huge state-owned venue, top international DJs, the funding to go a second year (but not a third). Absurdity, but also opportunity.

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