I've been lucky to meet with Wang Xiao Mei, the chatty and forthcoming marketing manager of KKP, one of China's more successful labels. Proof that you can make money in probably the most difficult (but full-of-potential) music market in the world. Photos will follow, but read on:
Chinese labels operate on lean margins. But one big star is sometimes enough to keep a label going. Beijing-based Kirin Kid Productions (KKP) has done that with pop balladeer Han Hong, who joined KKP in 1997 before moving to rival label Jingwen for her third album. Jingwen lured Han by promising the Han-Tibetan mixed race singer a concert in Lhasa. “It didn’t happen,” says the label’s marketing manager Wang Xue Mei.
An open mind at KKP, where denim and tattoos seem de rigeur for staff, got Han a deal following years of refusals at more staid state-owned labels. Swarthy and short-haired, Han has been the exception to a Mandopop A-list dominated by skinny, smiling stars. “Noone wanted to sign her then,” explains Wang, a chain-smoking tatooed graduate of the Central Art Academy in Beijing. “There are expectations of what a star must look like.”
KKP boss Cheng Jin however was convinced enough to write and produce songs for Han. Today the company’s cash cows are Han Hong’s first and second albums to which it owns the copyright. Cheng Jin honed his production skills on acts in Taiwan and Hong Kong before setting up KKP in 1997.
An eye for quirky talent landed the label another success, Li Xiao Long, a rapper from Tianjin. “Cheng Jin heard him and taught him drums.” Li released two albums on KKP’s sub label Dragon Tongue from 1998 before leaving “on creative differences” to self-release his third album. Sales of Li Xiao Long’s second album I Am Not A Hip Hop MC DJ were good because the company timed release around Han Hong’s second album which shifted one million legal copies.
Another KKP earner is faded soft rock behemoth Black Panther: a fifth album by the early-90’s sensations titled Return of the Kings shifted 600,000 units since its 2006 release. The band’s sixth album is currently in production but slowed by “differences in opinion” between label and artist. “Music quality is very important to our boss, he doesn’t care how long the recording takes.”
Money doesn’t come out of CD sales, says Wang, who in a previous job handled the mainland China campaign of Korean pop pin-up Rain. His Method to Hide Against Sunshine album sold “a maximum” 60,000 copies here. “That’s regarded as a success in China.” The K-pop star sold five million albums in Japan and Korea.
“A CD is a business card to get into China. Artists here make money off concerts and sponsorship.” The business of record labels is changing in China. KKP has eight artists on its books but not all are producing CDs. The main money spinner at KPP is in booking concerts. “We represent them, and organize their concerts.”
KKP prefers to run a tight ship of eight signed artists, preferring quality over quantity. Yet its foreign A&R work seems eclectic at best. KKP wants to be the China representative for more foreign acts and has been looking at DJ Ja Ja and Hong Kong pop lightweight Kelly Chan, who’s rock album is “under discussion.” Pianist Marie Batchelder’s Beijing and Shanghai shows in 2006 were handled by KKP after it was approached by the pianist’s label, Big Help, at a meeting of independent British and Chinese labels hosted in Beijing. “We plan to distribute her CDs,” says Wang.
Chinese record companies are only getting a tiny taste of the potential earnings from digital. But some, like Wang are going after pirates as an unexploited source of revenue. “We sue them,” she says nonchalantly. For each CD released by the company there are nine pirate copies. The companies are reachable in court because “they’re legally registered companies.” KKP gets a sentence from the court and uses a national network of lawyers to lean on local government agencies to enforce it. Most cases are settled outside of court. “KKP is the best in China at this!”
Wang has also gone after firms overstaying their licensing deals – distributors who continue to press best-selling CDs. Labels typically outsource manufacturing and distribution to a single company which in turn has a government-issued ISBN or barcode allowing it to distribute. “By the third year will know how many CDs they should reproduce.”
The same goes for digital content providers licensed to sell label songs online: “In most cases they go over time… If the licensing deal goes to first January 2008 and I see you selling my records on January 2 I will sue.” Irked by its own calculation that Chinese labels earn only 0.5 percent of a potential 200 billion downloads to mobile phones, KKP wants to sell more of its content digitally but is still studying a “good marketing concept.”
Sound A&R work means KKP rarely gets stuck with a dud. “All our product is still in the stores because it’s still selling, it’s wanted.” The label records only original work. “It’s a very difficult path.”
Good distributors are hard to find: KKP demands “detailed marketing and distribution plans,” but rewards by allowing better per-CD margins to the right company. Online retailer Jindian Jiahui is emerging as a fast mover of CDs whereas massive state-owned book retailer Xinhua is “very complicated and it’s very hard to get money back.”
Retailers trying to emulate HMV or Tower Records in China have had a difficult time, says Wang, who points to retailer Hao Wang Jiao. “They’re going broke.” National reach is a compromise between counterfeiters and moving units in small-town China, where sales invariably happen through in tin shack shops selling CDs alongside VCDs and DVDs. “It’s very important not to turn down people who want to sell,” says Wang.