The following MBW blog comes from Dave Pichilingi (pictured), CEO UK & North America of Beijing-born music company Modern Sky Entertainment. Founded by LiHui Shen in 1997, Modern Sky operates across records, publishing, live and video. It is one of the largest independent record labels in China, as well as being promoter of music festivals in the territory under the banner of Strawberry Festivals and MDSK. Here, Pichilingi tells us what coming out of COVID-19 lockdown has looked like for the music industry in China and the lessons that can be learnt from the company’s experiences there…
The first thing to realize is that China’s battle against COVID-19 is not over. The country is way ahead of the UK in its journey, having dealt with the pandemic efficiently with strict lockdown measures early. It means that vast swathes of its society are able to operate relatively normally once again.
But, while Modern Sky’s 2,000 capacity venue Modern Sky House in Shanghai is open for business, Beijing and all the businesses that call the capital home are still in complete lockdown. If China can tell us anything, it’s that ‘the new normal’ is going to be complicated for longer than any of us would wish.
In China, certain cities and regions have been given the power to define their own coronavirus policy according to their individual R-rate from one moment to the next. It’s an approach that the UK is likely to adopt, with test and trace already underway.
Having a partial lock in any country is obviously preferable than a full shutdown, but it still leaves a lot of uncertainty and potential jeopardy for many businesses.
The touring business, for example, will welcome the chance to plan and execute live shows once again. The sector has felt the full effects of the coronavirus pandemic, and being able to put music back on the stage will open the valve on arguably the modern music industry’s most vital revenue stream.
“But when big chunks of a territory can be closed off at short notice, a business that is based on fine-tuned logistics and slim margins cannot be relied upon as the bedrock for artists it once was.”
But when big chunks of a territory can be closed off at short notice, a business that is based on fine-tuned logistics and slim margins cannot be relied upon as the bedrock for artists it once was.
An effective vaccine will be the ultimate solution but, until that is realized, the Chinese music business has quickly found ways to innovate out of its current situation.
Modern Sky launched a streaming platform that enabled artists to perform and connect with fans – and for fans to support artists in return – early in the Chinese lockdown, in February.
Subsequently, Sound City and the Modern Sky UK office were able to react quickly in a similar way over here with Guest House, an online platform hosting a weekly broadcast of live performances and more, with artists earning a portion of subscription revenue and fan donations.
Since then, Modern Sky HQ has launched a new online festival called Strawberry Nebula, which enables fans to engage with artists and donate in real time during a performance.
Crucially, brands have embraced these new online efforts. Rather than hold on to ad spend in the hope that we will soon be back to business as usual, they are working with music partners wholeheartedly, asking how they can integrate with these new models in a way that benefits all parties.
Key to this are tech platforms such as Tencent’s messaging, social media and mobile payment app WeChat and the video sharing platform Bilibili, which Tencent invested almost $320 million in towards the end of 2018, and Alibaba took an 8% stake in last year. An open, cooperative way of working with music and brand partners and a willingness to adapt functionality to their needs in both cases means that the possibilities for artists, labels, promoters and sponsors are far more enticing and enriching than what we are typically able to tap into in the west.
While the likes of Facebook and Instagram are relatively rigid in their functionality, a company like Modern Sky and its commercial partners are encouraged to work closely with WeChat and Bilibili to integrate bespoke solutions that allow fans to support artists financially through seamless, real-time donations, with brands being able to contribute and integrate in creative ways.
“Whatever the model that is used to unlock new revenues, quality content is at the centre.”
As a result, companies like Modern Sky are no longer thinking about these tech-based models as ‘lockdown solutions’. While they may have been born as a response to the pandemic, Strawberry Nebula will be a recurring online festival in its own right for years to come and Sound City’s Guest House has already upped its broadcast frequency to multiple times a week with an increasingly diverse range of programming beyond live performance. These are new, permanent revenue drivers for artists.
Whatever the model that is used to unlock new revenues, quality content is at the centre. While ‘bedroom sessions’ were initially a novel way of enticing fans at the beginning of this crisis, as always, the best will set ever higher standards and fans will increasingly expect greater quality and more creativity. Whatever the future holds, as long as artists can deliver that, we have to find ways of bringing fans to them regardless of the obstacles.Music Business Worldwide