Far East Movement Becomes First U.S. Act To Sign Multimillion-Dollar Deal With China's NetEase Cloud Music: Exclusive

do not reuse
Courtesy of Transparent Arts
James Roh (Prohgress), Kevin Nishimura (Kev Nish), Jason Zhang and Virman Coquia (DJ Virman) at a recording studio in Shanghai, China.

American hip-hop group Far East Movement has signed a multimillion-dollar marketing and distribution deal with Chinese music streaming service NetEase Cloud Music, Billboard has learned.

NetEase Cloud Music will provide non-exclusive promotional and licensing support for new singles and audiovisual content that Far East Movement will release once a month, each featuring a new collaboration with a Chinese artist. The first collaboration, “Bamboo,” features Chinese pop singer Jason Zhang and Asian-American singer Kina Grannis, and is now available on NetEase as well as on Spotify and Apple Music.

While Far East Movement declined to comment on financial terms of the deal, sources say the deal’s total value runs into seven figures. The group will retain full copyright ownership of all songs released as part of the deal.

NetEase Cloud Music previously pledged 200 million yuan (US$32 million at the time) to train and promote local Chinese independent artists, but today’s announcement marks the first time that the service is investing directly in developing new content with U.S. talent. The company last reported over 400 million monthly active users in Nov. 2017.

Far East Movement had previously been signed to former Interscope imprint Cherrytree Records, and now operate their own label and events company Transparent Agency. The group released their last full-length album Identity, featuring several Korean artists like Chanyeol, Jay Park and Hyolyn, in Oct. 2016.

“While working with Interscope and Universal in our early days was incredible, we learned that we could also do a lot of label services on our own, as long as we could get our own funding,” Far East Movement member Kev Nish tells Billboard. “When it came to thinking about our next project, we wanted a partner who would give us the creative freedom and flexibility to market our music however we wanted. Hopefully this deal will inspire new types of relationships and experiments between artists and platforms, and help reshape what a label could look like in this context.”

Despite now being independent, Far East Movement remains close to Cherrytree; the label's head Martin Kierszenbaum helped them bring "Bamboo" to life, and is also releasing their upcoming album Coolwater + Identity in Japan on Nov. 30.

The fact that an independent, Asian-American hip-hop chart-topper has decided to partner with a Chinese streaming service on a new release underscores changes in power and influence between major labels and tech platforms, especially as the music business continues to globalize. Spotify’s new direct licensing and distribution deals with select independent artists initially caught many industry execs by surprise, and NetEase’s latest moves put a more international spin on how tech companies want to have a deeper stake in artists’ growth, particularly in China and other emerging markets.

Nish tells Billboard that Far East Movement is actively looking for younger artists in mainland China for future collaborations, particularly those who are trending on NetEase. The group also hopes to use some of their financing from the deal to connect local artists with bigger U.S. names as well.

“We wanted to go month-by-month instead of releasing an album all at once, because we didn’t want to be stuck to a timeline, trying to take an artist or sound from a year ago and market it a year later,” says Nish. “We want it to feel real-time and current.”

In Jun. 2018, NetEase Cloud Music shared that over 30 percent of all activity on its platform, including streams, comments, favorites and playlist adds, now involves international music -- the highest proportion of any Chinese music service, according to the company. Other international artists such as Alan Walker, Steve Aoki and Galen Crew have taken advantage of NetEase’s Fan Connect social platform, which is currently beta-testing an English-language interface.

Chinese national copyright regulators banned unlicensed music streaming in 2015, compelling local music services -- especially those like NetEase Cloud Music that rely heavily on user-generated content -- to secure the proper licensing deals. As for international partners, Netease signed a strategic licensing, distribution and royalty-reporting deal with Kobalt Music in Dec. 2017, followed by a non-exclusive licensing deal with indie label trade body Merlin in Mar. 2018.

Local competitor Tencent Music holds exclusive licensing deals with Universal Music Group, Warner Music Group and Sony Music Entertainment -- which includes sub-licensing control, meaning Tencent has full control over where major-label content ends up China. Earlier this year, NetEase Cloud Music struck both a comprehensive cross-licensing deal with Tencent Music and a limited copyright-swap deal with Ali Music Group (owned by fellow Chinese tech conglomerate Alibaba).

While Far East Movement’s deal with NetEase will be focused on Chinese audiences with respect to marketing, the group also hopes they can give their Chinese artist-collaborators meaningful traction in the U.S. -- an ambitious goal with few victors in recent music history.

For example, Chinese singer Jane Zhang signed to Sony Music in 2014 and was dubbed “China’s first global pop star,” but has gained little traction in the U.S. ever since, and has returned to releasing Chinese-language music through local labels as of late 2017. More recently, Chinese singer and actor Kris Wu, who is fluent in English and spent much of his childhood in Vancouver, signed to Interscope in the U.S. and Island Records in the U.K. in Apr. 2018.

Marketing Chinese artists in the U.S. “will absolutely be a challenge,” says Nish. “Korean groups have succeeded in the U.S. because the companies behind them really invested in globalizing. We can try to strive for the best-sounding English-language songs with the best Chinese artists, but without a real wider industry focus on putting the marketing money behind that, with multiple, consistent releases, it’s going to be a slow build. At the end of the day, we hope to expose these Chinese artists to new audiences as well as bring China a new sound and voice. Whether mainland Chinese artists will gain more traction in the States points to a much bigger conversation about how much Chinese companies will want to globalize."


THE BILLBOARD BIZ
SUBSCRIBER EXPERIENCE

The Biz premium subscriber content has moved to Billboard.com/business.


To simplify subscriber access, we have temporarily disabled the password requirement.