China Crowd-Sourced

China’s music business has joined the crowd-sourcing trend. 

An online music portal called Xiami, owned by e-commerce company Alibaba Group, has been sponsoring concerts using crowd-sourced funding via Alibaba’s Taobao shopping platform.

The first event Xiami presented was a concert at a club in downtown Beijing featuring “Voice of China” star Li Daimo and pop singer Li Quan, according to the Wall Street Journal.

Xiami proposed the concert in November, charging promoters with raising at least 100,000 yuan ($16,520) through online ticket sales in a month’s time.

If the target was met within the deadline, it would go ahead with the show.

There were a variety of “tickets” available for the event, from 1 yuan to watch the concert live online to 280 yuan to attend in person.

If someone wanted to request a song, they could pay an extra 2,999 yuan. The event reached its goal in 15 days. WSJ reports that crowd-sourcing in China originated with a website called DemoHour in 2011, which funded creative projects.

Alibaba has changed the landscape considerably because it is so huge and taps a very large potential audience. It has so far pledged 1 million yuan for 110 online projects.

The head of Xiami said he started the project to help struggling musicians, who usually can’t cover the cost of touring with conventional business models.

However, some sources cited by the WSJ say that, due to lack of regulation, it may be difficult to distinguish legal and illegal fund-raising activities.

There are many pyramid schemes and underground banks in China, and loan-sharking on a small scale is “tacitly” permitted.

Xiami has also been instrumental in bringing Chinese indie artists, especially those who don’t find official approval from state cultural organization, to the masses.

According to Bloomberg Businessweek, Xiami regularly uploads songs by indie artists for streaming and subscriptions.

Thanks to changes in copyright law that now allow commercial entities to make exclusive deals with artists, more Internet companies are becoming interested in distributing music.