World Party: The A2IM trade mission to Shanghai, from left: Randy Chin (VP Records), Jean Hsiao Wernheim (Chief International Executive a-Peer Synergy), Bill Zang (CEO & GM Shanghai Synergy Culture & Entertainment Group), Sam Alpert (Eleven Seven Music), Rich Bengloff (A2IM), Lu Xiaohui, (Director of the Publicity Department of CPC Shanghai Xuhui District Committee ), Jochim Becker (ZOHO Music), Gu Qin (CEO Shanghai Synergy Culture & Entertainment), Lennox Ruiz (Empire State Development), Adriana Sein (Ultra Music), Robert Singerman (CMJ), Pat Rains (PRA Records), Ruby Marchand (The Recording Academy), Robert Williams (335 Records), Stephanie Alexa (ATO Records), Charles Book (Entertainment One), Cathy Bauer (Daptone Records), Jon Topper (Fatboy Records), Dawn Bruno (Commerce ITA) and Jack Kong (U.S. Commerce Shanghai). Not pictured: Seymour Stein of Blue Horizon, Alec Bemis of Brassland, Jurgen Kordeletsch of Lollipop/Radikal and Priya from Warp. (Photo by Joachim Becker)
The American Association of Independent Music, or A2IM, made an historic trade mission to Shanghai China Sept. 8-10 with fifteen music companies and their representatives,which included: A2IM president Rich Bengloff, ATO Records' Stephanie Alexa, Daptone's Cathy Bauer, Ultra Records' Adriana Sein, VP Records' Randy Chin, and Entertainment One's Charles Book (full list below). While the mission also included stops in Seoul, South Korea and Hong Kong, it was business group's stop in Shanghai that broke new ground: This mission was the first established US music industry body to ever meet with the Chinese music industry with the approval and participation of both governments' trade bodies.
The U.S. mission had a budget of about $200,000 of which A2IM member companies contributed $32,000. The balance was covered by the States of Tennessee's Department of Economic and Community Development's TnTrade program, the New York Empire State Development Corp. and the federal Small Business Administration. Consequently, all A2IM members participating had to be organizations paying taxes to either Tennessee or New York. A2IM's Bengloff explained that, "the Obama administration set something up that poured money (from a grant) back the states so this trip is a joint venture between the states and the Small Business Administration of the US." Bengloff adds "the mission had to be to emerging markets, with China being the main target."
From left: Dawn Bruno (Commerce ITA), Rich Bengloff (A2IM) and Lennox Ruiz (Empire State Development) at the China Music Industry Park in the Hong Kou District.
The trade mission's timing coincided with a new law in China enforcing the collection of public performance rights from radihttp://www.hypebot.com/hypebot/2012/10/as-buyout-rumors-grow-live-nations-michael-rapino-to-present-at-investor-confab.htmlo broadcasts. The law went into effect March 31 and marked a major leap forward for rights' collection which has long been a stumbling block in trade relations with China. The Legal Daily, the official newspaper of The Central Politics and Law Commission of the Communist Party of China, reported the revision enthusiastically, saying the Chinese music industry now sees 'the light at the end of tunnel'. Reporter Hu Jianhui commented that the industry 'can participate more fully in international standards now.' Bill Yanbin Zang, the Vice-President of a-Peer SSCEG, noted in the piece, "this law means that radio stations, TV stations, public buildings, airports and shopping malls are required to pay to record labels once they play the music."
The Chinese trade mission featured some of the domestic music industry's main players, which is primarily based around the live market, Chinese telecoms (which accrue digital charges for music purchases), public performance royalty collections and synch rights. Participating Chinese companies included: Chia Tai Music Group, the state-owned China National Publications Import & Corporation, China Record Corporation, China Unicom, Jazz Music Festival Shanghai, H+M Communications Co., Ltd, Modern Sky Records/ Strawberries Music Festivals, Pacific Audio & Video Corporation of China, Pilot Records, Shanghai Music Publishing House, a-Peer Shanghai Synergy Culture and Entertainment Group (a-Peer SSCEG), and Shanghai To-Wing Records.
A2IM has a long-standing relationship with Jean Hsiao Wernheim of a-Peer SSCEG. The company is a joint venture between Shanghai Synergy Culture & Entertainment Group (SSCEG) and a-Peer Holding Group (aPHG), a US music and media technology company. The joint venture was officially launched Sept. 2009. a-Peer Synergy Shanghai helps provide secure business environment for international labels entering the Chinese market and access to national sales and distribution channels.
Seymour Stein (left) of of Blue Horizon and Bill Zhang in front of China Music Industry Park Recording Studio. Zhang is Vice President of Shanghai Synergy Culture and Entertainment Group (SSCEG). (Photo: Rob Schwartz)
This quasi-state owned conglomerate oversaw the trade mission's trip to Shanghai. Wernheim was the point person and she explains, "Rich and I have been in conversation about this for about a year. He asked for my help doing this. Even embassies would have trouble arranging a mission like this. I have seen many other countries that were not successful." She notes, "My partners, staff and allied companies arranged it with great cooperation [from the Chinese industry]."
She adds that all sides were ready for this kind of mission. "Chinese companies feel it is time for them to open-up to the world too."
Bengloff emceed the proceedings open to the invited US and Chinese companies all held at the newly-constructed China Music Industry Park. He made sure everything from the morning presentations each participating company to the afternoon one-on-one meetings between US and Chinese concerns went smoothly. The presence of music legend Seymour Stein, representing Blue Horizon records (which he Richard Gotterer from the Orchard) gave the meetings gravitas. Chinese participants were eager to have one-and-one sit-downs with Stein to discuss working together and opening up the Chinese market. Overall, Bengloff was confident deals could be struck. "We're going to have 16 meetings here…if (companies) can find three or four decent partners [I think the mission is a success]." He added A2IM used a baseline of three years to measure whether a partnership had moved forward."
Love in an Elevator: Rich Bengloff (left) expressing the "joy" of being stuck in a Shanghai elevator with Robert Williams, Pat Rains, Robert Singerman, Randy Chin and Joachim Becker (Photo by Joachim Becker)
Robert Singerman, representing both CMJ and LyricFind, a legal lyrics licensing company notes: "I've been working on the China market for about 2 1/2 years and we're focused on mobile because that's really where the development market is, B to B, B to C, with China mobile, China Unicom and China Telecom…. It's been slow but I'm extremely bullish on the Chinese market. Now, China is legally less than 1% of the international music market; my feeling is if we could even come close to Japan [that would be good]. He adds, "If China can become a 10% international music market that is big revenue."
A2IM Asia Trade Mission Company Attendees:
335 Records (Robert Williams)
A2IM (Richard Bengloff)
ATO Records (Stephanie Alexa)
Blue Horizon Records (Seymour Stein)
Brassland (Alec Bemis)
CMJ (Robert Singerman)
Daptone Records (Cathy Bauer)
Eleven Seven Music Group (Sam Alpert)
Entertainment One (Charles Book)
Fatboy Records (Jon Topper)
Lollipop Records (Jurgen Kordeletsch)
PRA Records (Pat Rains)
The Recording Academy (Ruby Marchand)
Ultra Music (Adriana Sein)
VP Records (Randy Chin)
ZOHO Music (Joachim Becker)