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How to Make a 100 Billion Industry? VFine's VP Chen Xin has some ideas.

admin 2019-11-19 Collect

On November 8th, the first stop of the “MCCT Music Copyright China Tour” national roadshow jointly organized by VFine Music and the Communication University of China was successfully held at the China International Exchange Center. Chen Xin, vice president of VFine Music, attended the summit and delivered a speech named “Improvement and Hope in the Digital Music Market.”

The following is the full text of Chen Xin’s speech:

Hello everyone, I am Chen Xin of VFine Music, responsible for the company’s business operations, and also a newbie in the music industry for only seven months.

Before joining the company last year, I found out some interesting facts. The digital music industry, the online gaming industry, and the online video industry all have a stable user base of 600-800 million. However, annual online gaming sales are about 220 billion; digital music sales are less than a fourth of that number.

The user base of digital music is so large, but why isn’t the industry profit accordingly? I came to the industry with a lot of questions. After research and experience, we formed some ideas about how to make the digital music industry into a 100 billion business. Today I’m going to share these ideas with all of you, and I hope it helps.
First, reduce cost and increase efficiency, which, applying to the digital music industry, means speeding up the marketing and monetization of music.
There are three areas where we can do that, pricing, communication, and trust. 95% of the music produced is “dead.” They lie silently in the musician’s computer, in the record label’s hard drive. They can’t circulate, spread, and monetize. Why is that?
First, people did not respect music copyrights until very recently. So they often used music without any licensing process. Second, less than 5% of the music copyright has a seller’s market, and more than 95% has a buyer’s market. However, these music producers in the buyer’s market don’t know how to price. They price according to buyer’s market rules, which led to inefficiency and circulation difficulties. The second inefficiency would be in communication. A lot of collaboration goes into making a song, lyrics writing, composing, recording, mixing, and mastering. In China, most of the people participating in the production of a song know each other very well. The industry needs to create platforms that help artists collaborate. Both “Wild Wolf Disco” and “Old Town Road” were written out of beats the artists bought on Beat Stars. The platform allowed beatmakers and rappers to collaborate without knowing each other. The third inefficiency is a lack of trust between the music industry and other industries.  I have a friend in the gaming industry who wanted wants to use Alan Walker’s song in his game. Alan Walker asked for half a million. VFine recommended a song of Martin Garrix to him, which only cost 50,000. Help building a sense of trust between music and other industry is also an essential task for commercialization fo music copyrights. 
Second, manage music copyright better using technology. For example, VFine uses AI tags to catalog music, Connect ID system, and voiceprint to detect the usage of the music and blockchain technology to make information inquiries more open and efficient. We can also speed up data transmission speed using technology. An institutional client once neede a massive selection of music, so we used cloud and APO technology to supply the client with half a million songs to choose. 
Third, we need more professionalism in every part of the music value chain. We need to do better at exploring different usage of a song. We typically make a song, upload it to a streaming platform, and let it sink or swim if the users don’t discover it, game over. When VFine decides to release a song, we put it on more than 100 streaming platforms all over the world. We also use VFine Music (China), Audiostock (Japan), Pond5 (US), and AudioJungle (Australia) to license and monetize it. If the song is rated high enough, VFine would promote it on Youtube, Bilibili, Spotify, NetEase, or in brand commercials and live performances. In the first ten months of this year, VFine licensed our copyrights 370,000 times, and 80% were commercial-use licenses for a fee. The most expensive ones are half a million yuan, and the least expensive ones are free in exchange for resources from the licensees. VFine provides commercial music SaaS services for m0re than 150 companies such as Tencent Advertisement and Uni-President Enterprises Corporation. We also offer distribution services for content creators like Visual China Group, New Studios Pictures, and TVCBOOK. At the same time, we make sure copyright owners are paid fairly and quickly. 
I believe only high quality and professional promotion can help a song succeed. There was a song called “Fallen Planet” that was more popular than “Wild Wold Disco” at the time. But “Wild Wolf Disco” became a much bigger hit later because once it had a small amount of popularity, the marketers found William Chan to feature it, and it spread on short video apps like wildfire. 
Professional management is also necessary. If you defend your copyrights in the wrong way, you can end up disappearing from social media like Li Zhi. Through efficient, professional business negotiations, we can make the infringers pay the damages. We recently negotiated on behalf of musician Wen Bo. And we quickly got the offender, a variety show production team, to apologize on Weibo. 
With the emergence of more music and the development of intellectual property rights, more business-facing services will emerge in the music industry. Reaching a 100 billion yuan means effective collaboration, marketing, promotion, copyright protection, technology, and monetization in the industry. A highly professional distribution system made gaming a 250 billion yuan industry. Our music industry can be much better than it is now. 
Everything I’ve said might be wrong, but my intentions are real. Let’s work towards a better future for China’s music industry together. Thank you.
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