Why the Fan Economy Won't Save China's Music Industry

To ensure high-quality releases, record companies must focus on selling songs, not people.

By Chen Xianjiang

My heart skipped a beat recently when I read an article published on the WeChat account of Sinovation Ventures, a venture capital firm. The piece discussed Sinovation’s founder, Kai-Fu Lee, and his investments in Shanghai Star48 Culture & Media Co. Ltd. Star48 is the company behind SNH48 , a wildly popular girl band who are part of Shanghai’s yangchengxi scene, where fans play an active role in “nurturing” amateur singers, voting on key decisions regarding their music, image, and performances.

The Sinovation article argued that SNH48 represents the fan economy, a vaguely defined concept that involves sustaining a business model — usually in the media industry — by providing the products and services most likely to be consumed by fans. “Because it transcends individual successes and failures,” the article read, “the fan economy can push out an endless stream of products. Like an NBA league, it is stable, passionate, and long-lasting, as well as simultaneously national and global.” The fan economy thus has the potential to transform the music industry for the better, the article concluded.

I see the logic in this argument. In recent years, Star48 has given throngs of fangirls a chance to step into the limelight. SNH48 has even spawned two offshoots, BEJ48 and GNZ48, based in Beijing and Guangzhou, respectively. I have no doubt that even more such groups will join the fray further down the line.

The fangirl model is unbridled capitalism at its most rapacious: quick to replicate, quick to grow, and quick to profit. This isn’t an issue, since investment is all about making money. Fangirls are such reliable business prospects precisely because they come with new fans, concerts, branded products, modeling, and even real estate, as each group usually performs in its own arena.

But this is not music — not at all. The rationale behind the fan economy is not the same as the rationale behind the music industry.

Put simply, the fan economy is the business of selling people. It builds up a person’s popularity, then leverages it for profit: singing, performing, acting, advertising, and so on. And I’ve got no problem with that. What I do have a problem with is the idea that the fan economy should be allowed to influence the music industry on a deeper level.

Those who work in the music industry should be clear about one fundamental concept: The basic sales units of the music industry are songs, not people. At the height of the traditional record industry, songs were first sold in the album format, either as EPs or LPs. For decades, the song was the music industry’s most basic commodity. This also applied to China, where music collectors, from the start of the economic reforms in the late 1970s, hoarded first cassette tapes and later CDs.

This changed sometime around the turn of the millennium with the advent of digitization. In China as elsewhere, popular music underwent a rapid shift, and now the core product of digital music is streaming. However, this is only a change of medium. In essence, the music business is still about buying and selling recorded works.

I don’t deny that people and personalities play persuasive roles in the way music is bought and sold, but at the same time, I believe that no discussion on the future of the industry should stray far from the fact that we are in the business of selling music, not people. This is why the fan economy is not the future of music — it doesn’t offer a sustainable model for selling the product at the heart of the industry.

The fan economy is not built to produce quality content because amid all the buying and selling, the music itself becomes secondary to the personality behind it. Even at its best, the fan economy fails to drive the music industry toward the consistent production and dissemination of high-quality recorded works.

British singer Adele’s most recent album, “25,” sold in record quantities following its release in November 2015. More recently, Ed Sheeran’s “Divide” and Kendrick Lamar’s “DAMN.” topped the charts, and Drake’s “More Life” broke streaming records. These are all excellent recorded works, and their outstanding commercial successes naturally encourage the music industry’s major players to continue creating quality content.

I’m not looking to pick a fight with Sinovation Ventures, Kai-Fu Lee, or SNH48. My motivation for writing these words is to ensure that China’s music industry does not repeat the same mistakes as its film industry, where the blind pursuit of capital has turned moviemakers’ attention away from innovating and toward putting out big-selling but poorly executed movies accompanied by lavish marketing campaigns.

Nowadays, everyone is talking up the fan economy, clamoring for copyrights, while at the same time complaining about the dearth of good music. But if nobody is willing to invest their time, money, or other resources into fostering and encouraging quality content, then how can we expect there to be quality work in the first place?

I’m not opposed to fandom playing a role in boosting music sales. However, it is crucial that the music industry does not come to rely on fan culture as a primary means of generating income. Instead, we should seek to educate those truly passionate about creating music and foster original compositions through strong copyright laws. Without a constant pool of talent to draw on, China’s music industry will wither and die, cut off from the source it needs to thrive.

Translator: Katherine Tse; editors: Yang Xiaozhou and Matthew Walsh.

(Header image: Members of Chinese girl group SNH48 interact with their fans after a performance in Shanghai, April 7, 2017. Chen Zhongqiu for Sixth Tone)

Author Bio:

Chen Xianjiang is the founder of ReChord, an online publication with a focus on the music industry.

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