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Major players bid to awaken China’s “sleeping giant”

The past week has seen a flurry of activity in the fast-growing – but still largely untapped – Chinese live music business, with two global players launching of new ventures with the potential to shake up a market already predicted to grow by ~7% annually through 2021.

Ecommerce giant Alibaba Group, which turned over ¥158.3 billion (US$23.9bn) in the 2017 financial year, and claims to be the world’s biggest retailer, on 19 September announced the launch of a dedicated live entertainment division, to encompass ticketing, content creation and the live experience.

According to Yu Yongfu, president of Alibaba’s Digital Media and Entertainment Group, the new company, described only as the live entertainment business group (阿里文娱现场娱乐事业群), is a “key part” of Alibaba’s strategy to grow its presence in the entertainment market, where it already has interests in film distribution and production, artist booking and management, and streaming music and video.

Ticketing for the new venture will be handled by Damai.cn – China’s largest entertainment ticketing platform, acquired by Alibaba in March – with its subsidiaries MaiLive and Maizuo, hitherto largely involved in online movie ticketing, leveraging Alibaba’s data to produce live shows, reports TechNode.

Alibaba’s long-awaited move into live events – predicted by IQ as far back as May 2016 – comes as Australia’s TEG announces what it calls a “game-changing” partnership with major Chinese ticketer YongLe to launch a cloud-based ticketing platform in China. The platform, expected to be launched in 2018, will be branded YunTek, which translates as “cloud technology”.

“This is a game changer. We believe YunTek will disrupt the entire Chinese live entertainment market”

TEG, which owns leading Australian ticketer Ticketek, as well as promoters TEG Live, TEG Dainty (formed last July following the acquisition of Paul Dainty’s Dainty Group) and Life Like Touring, last month launched a new division, TEG Asia, focused on expanding its activities in the continent. TEG says YunTek, a self-service platform, will be “one of the most sophisticated end-to-end ticketing and live event management platforms that have ever been developed”.

“This is a game changer, as we believe YunTek will disrupt the entire Chinese live entertainment market,” says TEG CEO Geoff Jones. “Not only are we delivering a new and innovative ticketing solution to the Chinese market, we are upending the traditional live events value chain.”

Ren Wang, CEO of YongLe, adds that the JV represents a “combination of the largest ticketing and entertainment businesses in the region”. “We are pleased to be joining forces with TEG, one of the largest and most respected ticketing companies globally,” adds Wang. “We believe TEG’s experience in both ticketing and live entertainment will ensure the success of the YunTek platform.”

The movement in the live market follows huge growth for the Chinese recorded music industry; 20.3% in 2016, according to IFPI, driven by an increase of 30.6% in streaming. In terms of revenue, China has yet to break the global top ten, with piracy still a problem – although analysts believe rising incomes and a government crackdown on piracy is slowly changing that, with many pointing to China as a ‘sleeping giant’ music economy ready to explode.

According to PwC’s Global entertainment and media outlook 2017-2021, the Chinese live music industry was worth US$217 million in 2016, and is set to grow at a compound annual growth rate (CAGR) of 6.721%, reaching $301m in 2021.

“Australia currently has a greater music market on account of its superior live industry. Not for long: China’s music market is sprinting”

“For a nation with some 1.38bn residents (and further population growth on the horizon due to the relaxing of the one-child policy), the legitimate market has until now been tagged as a sleeping giant,” reads the report. “Australia, with a population of just 24m, currently has a greater music market in terms of total revenue on account of its superior live industry. Not for long: China’s music market is sprinting.”

Writing for MBW in July, Modern Sky founder LiHui Shen estimated there are around 365m people in China who “will happily buy into culture and entertainment – young people that have newly disposable income to spend on leisure. It may not be the entire 1.2bn population, but it’s still the equivalent of the entire USA buying into music. Imagine that.”

As for the live business, it is “flourishing,” said Shen, “with plenty of big festivals, venues and opportunities for touring. Modern Sky has seen success on that front as China’s largest promoter, presenting over 15 Strawberry Music Festivals every year in China – but many companies still aren’t equipped to make the most of the live world.”

He suggested the key to success in China is – just as TEG has done with YongLe – “working with partners who understand the territory and can make things happen”.


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