Digging Into China

With China’s economy and power climbing, more investors are finding their profits in the communist country – including the concert business.

North America’s two largest promoters continue to make inroads in China, which is also home to companies like China West Entertainment and Emma Ticketmaster.

That last company was the most available for discussing the eccentricities of China promotion. The company is only three years old, and was built by Jonathon Krane before TM invested in his Emma Entertainment earlier this year.

Krane, founder of Tabitha Software and a real estate manager who has the advantage of speaking Chinese, began developing his promotion company in 2004. Now it has about 130 people on the payroll, a call center, six offices, a music festival on its way next year and, of course, its own nationwide ticketing system.

He had to overcome the apprehension of a Western businessman on foreign soil, but it’s obviously paying off. Krane shared with Pollstar the difficulties of building a music company in China.

"It’s definitely an emerging market and the live entertainment industry really has just started in the last five to 10 years. The growth over that period is dramatic," Krane said. "It’s really opening up. You have this fast-growing entertainment scene and they know about all the international artists through the Internet and the usual magazines and CDs. The fan base is growing with lots of different artists that have never been here."

Emma began as a ticketing company and promotion company, using the Ticketmaster model.

"We focused on the venues. No one was offering ticketing to venues; everyone was focused on the promoter, the one-off show."

Since then, Emma has brought in The Rolling Stones, Christina Aguilera, Eric Clapton, Beyoncé, Whitney Houston, Backstreet Boys and Avril Lavigne.

"We promote shows in the normal fashion," he said. "We do print. A lot of Internet exposure – that’s important. There’s outdoor advertising, there’s radio – that’s also important – and we also do a lot of grassroots promotion, figuring out all the demographics of certain artists and promoting directly to those demographics."

However, in China, there’s "soft advertising." Artists may find themselves doing pressers about their personal lives as much as about their careers because the Chinese are "very curious" about the incoming artists.

The Chinese have a habit of buying tickets day-of-show. It is customary for patrons to reserve a ticket, then make the purchase at walkup. It’s an uncomfortable model, but the Chinese are getting conditioned to the new paradigm.

"Usually what happens is there’s a spike the first day, then an increase as you move toward the show and the last two weeks are very important. When you sell out, you often sell out the week of the show. It does take time but people are buying earlier. They’re getting conditioned that there won’t be tickets at the end."

The latest visitor, Linkin Park, sold out 10,000 tickets when the show was announced – a first in Krane’s experience. Because of the increased infrastructure of his company, Krane expects to be able to tour artists next year. Emma Ticketmaster is also developing a festival in Shanghai that should draw 30,000 to 40,000 people, Krane said.

"China is still a communist country. The government controls everything and that includes media and entertainment," he said. "You definitely need strong relations to bring in an international artist and execute the event. That’s step one in China.

"Then you develop credibility domestically with the government and also internationally with the artist. Your relationships get stronger every time."

Also key was hiring locally.

"You can bring international business concepts and strategies to China but without Chinese support and staff, you can’t do anything," he said.

And this is a dream come true for a promoter: little overhead. Communism means the government provides the event security, opens the venues and turns the lights on.

"We have the PSB – the Public Security Bureau – meaning the police. They play a very important roll in all live events," Krane said. "They have a lot of control at the event itself and obviously they’re focused on safety. We also bring in our own private security for extra security and for the artist."

Shanghai is special in that people there tend to go to venues for entertainment, which suits Krane fine.

"That sounds like something basic but, in China, this concept is just starting and people are just getting into the habit of going to venues now," he said. " Every year it spikes."

Another opportunity for Emma is the secondary markets – another statement that would normally not sound accurate.

"These cities aren’t small," Krane said. "In secondary market cities, you’re looking at 2 million to 5 million people. There’s a huge potential in hundreds of cities across China."

The developing infrastructure means not only can Beyoncé tour China, but also Asian artists like Jacky Cheung and Andy Lau who are beginning to see 30-date outings.

Broadway is also getting into the act, and Nederlander has established the Nederlander New Century Broadway China Network to bring more Western performances to China.