In its nearly 5 years of existence, trailblazing concert promotion agency China West Entertainment (CWE) has brought a who’s who of international pop acts to China – from Norah Jones to the Black Eyed Peas to last November’s ambitious offering of the two K’s (West and Minogue). So it was met with surprise from some and disappointment from many this month when China West went out not with a bang but with a whisper, suspending its operations due to an unprofitable bottom line.
The Radar sat down to lunch with erstwhile CWE CEO Steve Sybesma just weeks before the company shuttered its doors. Sybesma is one of those rare men, driven by a sense of purpose and belief, that invest personal capital (both time and money) in the face of considerable challenge and risk. For as long as we’ve known him, he has been composed, confident and upbeat about the music business here in China. In contrast, it was a sombre and reflective Sybesma who took his place across the table from us in December 2008. What follows is a summary of the discussion, and an apt barometer-reading of the prospects for live music in China as a whole, touching on the barriers, bright spots, and idiosyncracies of the China music market.
Probably the contributing factor in the “unprofitable bottom line” was China West’s involvement in Novembers Kanye West China tour. With this in mind, we started the conversation talking about the difficulty of predicting artist popularity in the China market. Sybesma in association with LiveNation Asia, had saved up Kanye and Kylie for a post Olympic November, and had expected both to do extremely well. Most foreigners in China’s live music game (including those in the industry) would have assumed that a megastar like Kanye would be a big draw here in China; hip hop is one of the most popular genres amongst the kids in first tier cities and Kanye West is arguably one of the most recognisable faces currently in the genre, alongside 50 Cent and Jay-Z (neither of whom are likely to get a performance visa here any time soon). As usual for this tier of shows, ticket prices were mostly steep, but there were the customary cheap seats on sale at RMB 180-280 (USD 25-40) range. Kanye didn’t approach the realm of selling out the 9,000-capacity Shanghai Grand Stage, and Sybesma points out that not even the cheap seats sold out. The conclusion he took from what was surely an expensive experiment was that, although popular, hip hop is still very much a niche genre in China and that the stars are actually little-known. Even Avril Lavigne — the second most played contemporary international artist on Chinese radio – didn’t manage to shift tickets on her Fall ’08 tour. Witness the 80,000-capacity Shanghai Stadium with a crowd for the Avril show that would have struggled to get into the 10,000’s.
If you want to see some of the Kanye show for yourselves, check out this video taken from the top tiers of Shanghai’s Grand Stage:
When it comes to sponsorship, Sybesma says that brands in China have little to no idea how to effectively leverage music. In this, we concur. Pre-economic crisis, sponsorship was the model heralded by many as the answer to the drop in income experiences as CD sales fell off a cliff. On both the brand and the promoter sides in China, expectations surrounding sponsorship are unrealistic to the extreme. The average brand manager might approach an outfit like China West with the idea to bring U2 and Coldplay to China on the same bill, with a budget of RMB 2 million/city (less than USD 300,000), a sum that might just cover production costs for these two behemoths. On a positive note, an interest in using music as part of a branding strategy is on the rise in China, which is no doubt a good thing for ongoing investment into the music industry here.
Another silver lining is the notable improvement in local production teams. Standards have risen meteorically here, and Chinese production houses can now more than compete with their international contemporaries. Shanghai’s Grand Stage now have their own production company, which can compete on a level with anyone else in the country. Of course, you are locked into using this production company if you want to use the Grand Stage, as well as giving the venue their usual allocation of tickets for “the government”.
So what is the future for the music industry in China? While prospects look hopeful in some respects, the promotion business is in decline globally. The big boys (Ticketmaster, Livenation, AEG) will survive from the top strata of artists for a while, but what happens when the stars bred and nurtured in the 60’s, 70’s and 80’s end their performing careers? There is a paucity of stadium artists coming through the ranks, and this scarcity will hurt these titans in the long run.
China’s future is most likely similar to the future elsewhere, which points to a trend of smaller, more regular shows. LiveNation’s purchase of the House of Blues has been their most successful outing of recent years, and is surely a sign of things to come. For Sybesma, his shows at Shanghai’s Yunfung Theatre were reminiscent of the 1,000 capacity shows he did in the US with the likes of REO Speedwagon and Joe Walsh in the ‘70s. Steve was interested in an investment in this sector himself, and had three locations under consideration at various points in the last 5 years. Sadly, all three were thwarted by a combination of local authorities and the “uneven” playing field that foreign promoters must reckon with.
Asked whether there were similarities between the America of the ‘70s (when he got his start as a promoter) and China of the noughties, Sybesma replied that the main difference was the lack of systemic difficulties arising from local authorities and the venues themselves in the US. In today’s China it’s difficult to adequately predict the outcome of licensing and permit negotiations and potential censorship fines, which make it difficult for shows to be profitable. On the flip, China has venues on offer that are far superior to the ones in America in the ‘70s. Shanghai’s Hongkou Stadium is a great venue both structurally and in terms of acoustics. The main problem is that in licensing it, a promoter is often only given authority for 1/2 – 2/3 of the capacity, which means that the floor will only be 2/3 full during a show.
As a wrap up, we asked about the difference between the 2003 Sybesma and the 2008 model.
“When I arrived in China 5 years ago, I believed I could help change things here. Now I realise that I, like everyone else, must work within the system.”
We hope that Steve will be back soon. He has a lot to offer to music in China and we will miss him in his absence.