Restart life

Chapter 244 0241 [The Standard Configuration of Major Internet Companies]

"Mr. Chen, this is Mr. Huang Xinyuan, the SP business manager of Bestune."

"Hello."

"Hello, Mr. Chen."

The person Xu Yuteng brought over was probably in his forties. He was slightly overweight and wore glasses.

As for EMI Records, it is a subsidiary of EMI Records in mainland China. In mainland China, it is usually not referred to by its official name, but simply as EMI Records.

Chen Guiliang asked his secretary to make coffee, and after a few pleasantries, he asked, "EMI Records also produces its own SPs?"

Huang Xinyuan was both amused and exasperated: "They originally planned to set up an SP department, poached me, and then suddenly decided against it. They left me hanging there for several months."

"What happened?" Chen Guiliang asked, very curious.

Huang Xinyuan said, "There are many SP service providers in China who bought the ringback tone operation rights of a large number of songs from EMI and made a fortune. The former president of EMI Busheng was envious and did not want to earn only a small share, so he planned to use the song copyrights in his hands to personally enter the SP business. I have been operating the ringback tone of Hu Yanbing's songs. Because I made a lot of money, EMI poached me."

Chen Guiliang's eyes lit up: "You orchestrated Hu Yanbing's ringback tone?"

Huang Xinyuan said, "I am the person in charge of the implementation. I used to work at TOM Online."

TOM Online was incredibly successful in creating ringback tones at that time, and its vice president, Xie Guoming, was a figure who directly influenced the landscape of the Chinese music industry.

In a few years, Xie Guoming will become the vice president of Sina and the head of Sina Music.

Following this, Xie Guoming resigned and founded Ocean Music, intending to spend a huge sum of money to buy a massive amount of song copyrights. However, his idea was too radical, and at the time, no one was willing to invest.

So, he tricked a real estate developer who knew absolutely nothing about music into investing and acquiring 100% of Ocean Music's equity. To circumvent the unlimited liability of a sole proprietorship, the developer had Xie Guoming hold 37.5% of the shares on his behalf. These shares held on behalf of others also included options.

The real estate developer was completely misled. Faced with huge losses, he was so scared that he quickly sold his shares and made a profit of 7000 million yuan in a year – through financing appreciation.

When the real estate developer withdrew, Xie Guoming concealed four important agreements.

In fact, real estate developers can earn 7 million!

Of course, making 7 million is extremely difficult because you can't cash out and exit; you have to continue holding the shares.

Xie Guoming used the funds obtained through continuous financing to buy the electronic copyrights of 50% of the songs from all record companies in China at the time, before the government intervened to regulate music copyrights.

Then, he was recruited by Tencent and became the co-vice president of Tencent Music.

Following the news of Tencent Music's planned IPO in the US, real estate developers immediately filed a lawsuit against Xie Guoming for commercial fraud. To expedite the listing, Tencent Music quickly fired Xie Guoming and paid to liquidate his shares. They also compensated the real estate developers to settle the matter.

This is how QQ Music captured the market.

Xie Guoming's practice of buying electronic copyrights at bargain prices in advance is exactly what Chen Guiliang plans to do later. Even if he resells them directly afterward, he can still make a substantial profit, which could be calculated in the billions of yuan.

Chen Guiliang asked curiously, "How did EMI Records get into such a mess? They poached you to work as a SP (Special Service Provider), and now they're not doing that business anymore."

Huang Xinyuan explained in detail: "Previously, China did not allow foreign companies to independently produce audio-visual products. Therefore, if EMI Records wanted to establish itself in mainland China, it had to form a joint venture with a Chinese company. At that time, EMI Records approached Yifeng Music, which in turn had a partnership with Shanghai Media Group. Didn't China join the WTO?"

"Have the policy restrictions been relaxed?" Chen Guiliang asked.

Huang Xinyuan nodded: "After joining the WTO, restrictions on foreign investment will be gradually lifted. Although foreign investors are still not allowed to publish audio-visual products in mainland China, they can now have audio-visual distribution rights."

Therefore, EMI Records headquarters invested heavily to turn EMI Step into a wholly-owned subsidiary. The publisher remained Shanghai Media Group, but EMI Step acquired the distribution rights from Shanghai Media Group.

It's like EMI Records only gives Shanghai Media Group a cut, but they can decide everything else themselves.

Over the past year, Zheng Donghan, president of EMI Asia, has been restructuring and purging the management team. Most of the middle and senior-level personnel being purged came from the former Yifeng Music, and some Taiwanese employees were also let go.

The SP (Service Provider) business that the former CEO decided to pursue has been indefinitely postponed and can no longer proceed.

"You didn't sign a long-term contract with EMI, did you?" Chen Guiliang asked.

Huang Xinyuan laughed and said, "How could that be? I'm not a musician. I didn't even sign a non-compete agreement. But I left TOM Online, so it'll be hard to go back. Other SP service providers don't need someone like me. I heard that President Chen also wanted to do SP, so I came here to join him."

Chen Guiliang said, "I would like to ask you for the secrets to making SPs (Special Permits).

"There's no secret to it, it all comes down to relationships with China Mobile and China Unicom," Huang Xinyuan said. "You have to win them dinners and get to know their business managers. Then you have to give them a hidden cut to get things done. If they have any particular fetishes, you have to take them to certain places to spend money. Of course, for songs that are already super popular, you can do it without all that."

Chen Guiliang laughed and said, "This industry is shady enough."

Huang Xinyuan said, "This industry seems very profitable, but after deducting various kickbacks and the share for songwriters, composers, and singers, SP service providers only get 15%-20% of the ringback tone revenue. By the time they get 20%, the song is already very popular. Also, advertising on TV costs money, which is paid by the SP service provider." Damn, I was careless; it doesn't seem like they earn that much.

"It is indeed a bit too little," Chen Guiliang said.

Huang Xinyuan said, "If it were just that, it would be considered good. The most troublesome thing is piracy and infringement. Take 'Auspicious Three Treasures' for example. There is only one company with the right to operate the ringtone, but there are hundreds of companies making pirated ringtones. These infringers even include Sohu and Huayou Century!"

Sohu needs no further explanation.

Huayou Century has gone public after making ringback tones.

These giants are also blatantly infringing on intellectual property rights.

It can only be said that "The Auspicious Three Treasures" is so popular that it has attracted the envy of countless companies.

"The Wind Rises" is already very lucky that it was only infringed on by Fenbei.com.

Like "The Auspicious Three Treasures," which has been infringed upon by more than a hundred companies, even the lawyers representing the company have a headache.

Huang Xinyuan then revealed many secrets of the ringback tone industry, simply to showcase his connections and abilities. This business is all about connections; the same song, if you offend a provincial leader at China Mobile, they can directly tell you not to use it!
Huang Xinyuan cautioned, "Some time ago, General Manager Chen threatened to sue the China Mobile branch, forcing them to hand over download data to sue Fenbei.com. We can't do that again. If we offend China Mobile, our SP (Service Provider) business will be impossible to conduct."

"In that case, I am indeed quite an amateur." Chen Guiliang humbly accepted the advice.

No wonder China Mobile and China Unicom are accomplices in infringement, yet no company dares to sue them. Only Chen Guiliang, an amateur, is foolish enough to insist on filing a lawsuit.

Fortunately, they have reached a settlement.

Chen Guiliang also shared his plans: to collaborate with Xiami Music to hold an original song competition through Renren.com and HaiNei.com.

Huang Xinyuan commented: "This is a good method. If you can discover good songs, you can save a lot of copyright fees. Buying ringtone operation rights from record companies is too expensive. Of course, if you want to be an SP service provider, you can't avoid buying copyrights from record companies. I know people from China Mobile and China Unicom, and I also know a lot of people from record companies."

Many songs that sell like hotcakes are sold by record companies to SP (Service Provider) companies, who then partner with mobile and Unicom operators. Examples include songs by Dao Lang and Phoenix Legend.

After talking for more than an hour, Chen Guiliang decided to formally establish the SP service department and asked Huang Xinyuan to serve as the head of the SP service department.

ByteDance previously had an SP project team, but it only worked on mobile Weibo and had only three members. Moreover, they weren't very professional and were learning on the job.

Now, Huang Xinyuan, an expert, has arrived and will take over the previous three-person SP team. While managing the ringback tones, he will also teach the three how to develop mobile Weibo.

This SP (Service Provider) business unit is now a standard feature of large internet companies.

Sina, Baidu, NetEase, Sohu, Tencent... they're all doing ringback tone services, so Chen Guiliang's entry into the market was relatively late.

Chen Guiliang instructed, "I have only two requirements. First, there must be no infringement; second, there must be no traps or consumer traps."

Huang Xinyuan laughed heartily: "President Chen is truly an honest man. He has shut out the two major profit-making methods of the SP industry in one fell swoop."

Chen Guiliang said seriously, "I'm serious. I can earn less money, but I have to have a bottom line as a person."

Huang Xinyuan also stopped smiling: "There aren't many people like President Chen these days."

"Maybe it's because I'm still young. Young people have backbone!" Chen Guiliang said.

Xu Yuteng, who had been listening in the background, exclaimed, "President Chen is truly a conscientious businessman with a strong sense of morality and responsibility!"

Chen Guiliang asked, "Do you want to sign a long-term contract and hand over all the songs you write in the future to ByteDance to make into ringtones? I know you want to sell physical records, just like online novel authors who would rather not make money than not publish physical books. But to put it bluntly, with your looks and temperament, you probably won't be able to sell physical records."

Xu Yuteng really wanted to say that Dao Lang is uglier than him, but his physical records still sold like hotcakes.

But after thinking about it, he still couldn't bring himself to say it; he knew his song couldn't compare.

After careful consideration, Xu Yuteng said, "How about I go to Xiami Music? I just heard Mr. Chen mention Xiami Music, and I have a good impression of Wang Hao. If I go there, I can help review and evaluate uploaded songs, and write song requests and create ringtones when I have time."

Chen Guiliang nodded: "Okay, I'll say hello to Wang Hao."

Chen Guiliang said he wouldn't interfere with Xiami Music's daily management for the next ten years. Sending a music producer over is fine, but Xu Yuteng isn't going to be a manager.

The matter was settled, and the three shook hands.

The SP service team was recruited by Xu Yuteng in conjunction with HR.

ByteDance finally has the standard equipment that major internet companies use.

(End of this chapter)