Musicinfo heads downstream in China

The year 2000 was notable for many things: Sydney hosted the Olympics in Australia, mad cow disease was still rearing its head in Europe and the globe as a whole got off to a bumpy start, after the much-touted millennial meltdown failed to materialise.

Over in the music world, the industry was undergoing something of its own millennial shuffle. After providing a virtual free-for-all of online illegal musical exchange for several years, Napster was eventually taken to court by heavy metal icons Metallica.

Whilst the peer-to-peer file sharing service was eventually forced to shutter its freemium business model, what was evidently clear was that music fans sought a fresh approach, an easier way for them to access the tunes they love.

Tuning in to opportunity

Fast-forward 17 years and the current abundance of streaming services offers an embarrassment of riches for listeners. Nonetheless, amidst this ease of access, distribution itself remains music only to the ears of record company execs.

“Globally, music companies still dominate the music business,” explains Musicinfo CEO KariHalttunen. “One per cent dominates around 80 per cent of the industry.”

And this is just Western markets. There are even bigger hurdles to overcome if one wants to reach other listeners with their carefully crafted tunes. Take the Chinese market, for example. The largest audience in the world, China currently has 530 million music streamers. But there are strict limitations on how they can be accessed.

“China is complicated for international companies and services,” Halttunen continues. “Chinese law says that if you provide music there, you have to have a company in China and have to have all servers there.”

Thus, to facilitate such access, Musicinfo has partnered up with a Chinese company to create a distribution service for independent musicians and record labels. For a one-time fee of 99 euros, users can upload an unlimited amount of music, sit back and commence accruing royalties from China.

Simple as that.

One sticking point in the development of streaming services thus far has been how artists are seemingly short changed by record companies, with meagre returns on their blood, sweat and tears.

Musicinfo seeks to change this. And then some: a total of 85 per cent of revenues are passed on to the artists. Given the rapid growth of the Chinese market, this represents a significant slice of a potentially very significant pie.

“In 2015, Chinese digital music sales increased about 70 per cent,” Halttunen points out. “We are building a bridge between Asia and the Western countries.”

International popularity

Many are seizing the opportunity to expand their audible reach to the Far East. Since starting in November last year, hundreds of artists from over 10 countries have joined the service. This rapid growth is reflected in the expansion of company personnel.

“Currently we have 16 employees working in seven different countries,” Halttunen says. “We have an international team, with many native language speakers. That’s the reason why we have quickly acquired our clients from so many different countries.”

Looking ahead it’s not just the Chinese market that Musicinfo is hoping to tap. Halttunen has just returned from a trip to Pakistan, where its population of 200 million also enjoys its own streaming services. The neighbouring Indian market beckons also.

What unites these countries is that they have something that many music markets share.

“Some 80 per cent of each market is made up of local music that people want to listen to,” Halttunen states. “The other 20 per cent is international music. Young people want to listen to different music more and more.”

It seems that the volume of Musicinfo’s offering will soon be heard in greater numbers, indeed.