(Writer: Iecy Li, English Editor:Lesley Zhang,Ting )On a warm November day in Guangzhou, staff at the Starsing headquarter were still wearing T-shirt and busy with the records that created the history of China music industry. With a strong Cantonese accent, Zhou Xiaochuan, the founder of Starsing Music started to tell his legendary story of the company. Zhou showed his wisdom as a Chaoshan businessman with a smart briefing. Instead of being indignant, rebellious or idealistic as freaks in music world, Zhou was as clam as a born-merchant to keep his enterprise thriving when the rest of its counterparts slowed down over the last 15 years.
Since its foundation in 1997, Starsing has enjoyed relatively stable marketing share. The year 2013 was a turning point to Starsing as its YYQ music platform became popular among fans and projects ran one after anothr. Its independent label Zen Music had promoted numbers of concerts in various city areas. So, how does its high-pitched supporting records business survive over the 17 years? Will record publishing fade out as time goes by?
One focus, one business
In the 1990s when recording industry was in the “golden era”, Zhou’s relative opened a CD manufacturing factory, giving Zhou the chance to get into the business. In 1988, Zhou established his own e-commerce retail platform of video and audio disks. A year later, he reached partnership with Joyo (acquired by Amazon China later). At early stages Joyo was not experienced in online audio and video retailing. However, Starsing had a group of talented young people who were specialised in building Internet platform and designing websites. In Joyo’s first business year, Starsing was the best-selling
record company for audio and visual business.
However, at that time, Zhou was only selling music products online without much understanding about the music industry. “I even didn’t realize that I had music gene, all I did was music retailing.” said, Zhou.
It was in the 2000 that Zhou met one of the most influential mentor in his life —- Wu Tianchi, a prominent Chinese recording producer. Wu put all his time and energy making two recording studios which produced a large number of folk music. He once told Zhou, “We must record those masterpiece, otherwise they will not be kept.”
Zhou majored in Chinese literature and was very sensitive to certain details and modes. “Mr. Wu’s words really moved me. It was not until then did I have my own understanding about music.” But 2000 was not a good year for the music industry and the following decade had seen the suffering of offline music business. At that time, the domestic music publishing had indicated its trend of turning downwards. The people remained in this business limited themselves in promoting live performance rather than recorded music, neither did they produce delicate Chinese music.
After analyzed the industry environment, Zhou listened to some ten thousand songs with nearly all the genres ranging from punk, classic, jazz to rock music which made him fall in love with music. “Now, I love all kinds of music although heavy metal is not my cup of tea. Only when I listened to them did I found the true beauty of music.” Since then, Zhou had his own taste for music and picked out 500 albums from his first cooperator—- BMG, one of the major labels in the world. That was how his business got started.
Zhou asked his team to not only translate the lyrics but also add background stories, all of which were printed and sold with the albums. It was these simple and trivial details that attracted customers, while other labels ignored it.
“It was a hard time to translate especially in relation to classical music that required professional knowledge. We did a lot to figure out the right translation of artists’ names.”
In four years (2000-2004), Starsing grew step by step to expend its collaboration with other music companies and introduced new original albums. The whole industry was shocked when it managed to sell nearly 15m albums after investing 30m RMB during this period. It was the first time for Zhou to be widely recognized in music industry. The published records covered classical, jazz, world music, new age music and country music with the exception of pop music.
The secret of success
While his e-commerce enjoyed great success, Zhou surprisingly turned back to traditional business. He found a unique way to survive in the deteriorating record market. Starsing was very careful with the strategic decisions and believed opportunities were for those prepared.
“First, we were going to enter a music area that no one had tried before; second, we were different because we had a powerful database; third, we would be the first company to sell records online in the Internet age.” Zhou explained.
(1) Non-mainstream music
Zhou was so novel as to choose non-mainstream music —- classic, rock, jazz, folk, which were hardly pirated and the threshold for authorization was comparably lower. At that time, labels used to grant license with guarantee model. Generally, pop music demanded 6 RMB royalty for 200,000 copies, while other genres only required 10,000 copies, which means low cost and risk.
(2) Contract, rule and big data
Zhou had his own financial management and supply chain system and understood accurate information about the supply chain and stock turnover. “Offline music industry lacked appropriate ERP system which lead to the imbalance between supply and demands. Businessmen made verbal agreement with payment terms and return rate.
The partnership with international labels only last for one year and sometimes law suit occurred. ” Starsing developed a system to manage its supplier and customers and allow labels and dealers to monitor its sales and products. It was among the few private companies who devote to database.
“In music industry, many companies made decision based on their instinct, using a push approach which I don’t think make sense. They sent the information about the albums to the customer and let them place the order without any strategic planning. ”
(3) New point of growth
In 2005, Starsing had 60% of market share in classic music. While there was not much room for further increasing, Zhou was considering publishing Chinese pop music. However, he failed to cooperate with agencies who were on the different road from labels.
In January, 2005, Starsing independently set up its promotion unit and became the first one in domestic traditional publishing companies. Kenji Wu was the first signed artist. From producing to promoting, Starsing made all those along and sold almost 120,000 albums in the first three months. They also promoted other artists like Cheer Chen, Nicky Lee and Wu Bai.
1. turn to indie musicians
“Large quantities of music websites emerged in 2005 and fans could share digital music on their platforms, which reduced our revenue of publishing.” Especially in 2007, record industry showed another big slump. Zhou noticed two trends: first, the sales volume of records decreased. Second, two groups were emering: indie musicians and fans. And Starsing chose to bridge the gap between the indie musicians and fans.
In October 2007, they released 30 albums from artists including Cheer Chen, Chet Lam, Jessica Jiang, Sodagreen, Jiannian Chen, kimbo Hu and Muma. This again shocked the industry. The indie label of Starsing Zen Music aims to discover good indie music.
2. live concert
With the recent thriving of China’s music festivals, Starsing is producing its own Starsing, Guangzhou International Music Festival.
“This New Year music festival would be held until next May and we have also prepared lots of concerts.I hope it can be of high quality because a good music festival reflects the life style and requires systematic organization.”
“The traditional part is our resources and new opportunities rise while we are sharing. If we are not able to absorb the resources, we will collaborate with other players in and beyond the music industry.”
“Many excellent musicians are emerging while music production is being enhanced and consumers are learning. I think the whole industry is promising.”
Zhou believes that music industry will be rewarding with good music and constant devotion. Starsing will act as the bridge between great music content and paid fans. This is a rational approach for Starsing’s future.
“The only question is who will lead the initiative and build a bigger platform.”
“The diversification in the industry is becoming increasingly important. Investors need to have deep industrial knowledge and back标签：exclusive interview, investor, Toutoushidao Capital 2017-12-18
Copyright © 2015 China Music Business News