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Chapter 534 0522 [The Correct Use of Precognitive Abilities]

In early June 2012, Byte Music Co., Ltd. was quietly established.

They immediately sent people everywhere to buy copyrights.

The first company they contacted was Linfair Records, which represents artists such as Angela Chang, Christine Fan, and Harlem Yu.

Although some singers have terminated their contracts, the copyrights of some of their songs are still held by Linfair Records, such as Su Rui, Tai Zhengxiao, Wang Leehom, Winnie Hsin, Mavis Fan, Na Ying, and so on.

With so many songs, guess how much the exclusive online distribution rights cost in mainland China?
A guaranteed minimum payment of 500 million yuan per year, plus a share of subsequent income!

The contract term is a "3+2 model", meaning that after the three-year term, the annual guaranteed minimum amount will increase by 20% and the contract will be automatically renewed for two more years.

Linfair Records only wanted to offer priority renewal rights, but ultimately lacked the confidence to change "priority renewal" to "automatic renewal".

It's impossible to buy out a record deal permanently, and it's not even possible to sign a five-year contract at once. Record companies usually only offer two- or three-year contracts.

Why is the price so low?
Because of the sluggish ringback tone business and rampant piracy of online music, record companies simply cannot sell legitimate copies on the internet.

Even though Tencent's QQ Music and ByteDance's Xiami Music have been trying to promote legitimate music, they only sign popular songs by currently popular singers.

Want to sell it all at once? No way!
Byte Music has now signed a deal for all the song copyrights from Linfair Records, including the rights to operate, sell, and litigate these songs on the Chinese mainland internet.

Furthermore, when purchasing in a package, if the agency rights that have already been sold are involved, they will be automatically transferred to Byte Music after the third-party contract expires.

For example, QQ Music bought the agency rights to some of Angela Chang's songs, and the rights were automatically transferred to ByteDance Music after the contract expired.

Xiami Music CEO Wang Hao was so shocked that he immediately flew to Beijing: "What's going on? Boss, you've taken over the distribution rights for Linfair Records?"

Chen Guiliang nodded and said, "Yes, the next one is Seed Music (which has singers like Guang Liang and Wu Kequn). Then it's Rock Records, Huayi Brothers, Emperor Entertainment, Gold Typhoon, and so on. Then we'll sign with Korean record companies. Finally, we'll sign with the three giants: Universal, Sony, and Warner."

Wang Hao was stunned.

He paused for a while before asking, "What is the relationship between the newly established Byte Music and our Xiami Music?"

Chen Guiliang said, "Currently, we are sister companies. Songs distributed by Byte Music can be preferentially distributed to Xiami Music. I respect your wishes. If you agree someday, Xiami Music can be directly merged into Byte Music. If you don't agree, I will buy Kuwo or Kugou. Having more platforms is necessary to distribute these songs."

Wang Hao hesitated, unsure of what to say.

Due to multiple investments from ByteDance, ByteDance now holds 85% of Xiami Music's shares, while Wang Hao and other founders hold the remaining 15%.

Wang Hao's team is in charge of daily management and operations, but when it comes to related businesses with other ByteDance platforms, they definitely follow the lead of the parent company.

For example, accounts under ByteDance are linked to Xiami Music, allowing users to log in with the same account across multiple platforms. Xiami Music also collaborates with its sister platforms on promotional activities.

Currently, Xiami Music and QQ Music have similar business models.

All the songs are in standard quality and can be listened to or downloaded for free online. However, there are also advertisements.

You need a membership to listen to or download high-quality songs online, and there are no ads.

What makes Xiami Music better than QQ Music is that it allows users to pay for in-depth customization of their own playlists, and also provides free customized playlists periodically.

Especially some niche, high-quality playlists, which are simply a tool for the petit bourgeoisie to show off.

There are genuine and pirated versions.

Whether it's a legitimate copy or a pirated copy depends on whether the record company is willing to cooperate and whether they are willing to charge a low price—if the price is too high, there's no profit to be made.

After thinking for a long time, Wang Hao finally asked, "Is the policy for online music about to change drastically?"

Chen Guiliang shook his head: "If things really are about to change, Tencent will definitely get wind of it too."

“You’ll lose money hoarding copyrights like this, and you’ll lose a lot of money!” Wang Hao couldn’t understand this.

Chen Guiliang laughed and said, "I'm taking a gamble. Last year, the third revision of the Copyright Law was launched. If the revision is completed, it may strengthen the supervision of online music copyright."

Wang Hao said, "The way you gamble is no different from playing dice in a casino. They've been saying they'd strengthen regulations for five or six years, but there's still no concrete information."

Chen Guiliang said, "I'm betting that copyright regulation in China will inevitably become more standardized."

Wang Hao said, "But you can only sign an agency contract for two or three years. If the policy doesn't change within two or three years, all your money will be wasted."

Chen Guiliang said, "The 3+2 model: three years of exclusive agency, followed by two years of automatic renewal with increased pricing. I won't buy the copyrights from those who refuse this model!"

Ocean Music in another time and space, when it was frantically hoarding song copyrights, did not sign the 3+2 model, but only the standard three-year contract.

As a result, when regulatory policies tightened, the first batch of contracts just expired, and QQ Music seized the opportunity to snatch them up at a high price!
Wang Hao asked, "If Xiami Music merges into Byte Music, how will the equity of our founding team be calculated?" "We'll offer cash compensation based on the valuation," Chen Guiliang said. "You can also stay and continue to hold management positions at Byte Music. In addition, I'll give you stock options as incentives."

"I need to go back and discuss it with them." Wang Hao was still very grateful to Chen Guiliang. ByteDance held 85% of Xiami's shares, but it really did not interfere with the daily management as agreed.

Such verbal promises can be broken at any time, but Chen Guiliang always kept his word.

Chen Guiliang laughed and said, "You guys can think about it slowly. I'll just say one thing: Byte Music's stock options will be very valuable."

Chen Guiliang added, "By the way, ACFun and Tudou are negotiating the online video rights for 'The Voice of China' on Blueberry TV. Xiami Music can acquire the online audio rights. Believe me, this show will be a huge hit."

Wang Hao said, "I know that. Blueberry TV even contacted me, asking me to recommend some promising talents to participate in the competition. I also know the music director of 'The Voice of China,' and we've had dinner together a few times. The main problem is the lack of copyright supervision; I haven't thought about buying the official version."

"As long as the price isn't too outrageous, we should buy it. Try to sign a long-term contract," Chen Guiliang said.

Wang Hao laughed and said, "They only focus on video copyrights; they can't sell audio copyrights at all. If I offer a little more money, they'd be willing to sell them out permanently."

“If it can be a permanent buyout, then we must sign it,” Chen Guiliang said.

“Okay,” Wang Hao said.

Wang Hao has always been involved in the music scene in Hangzhou, and the music team of "The Voice of China" also belongs to the Hangzhou music circle. They are very familiar with each other.

Wang Hao was so familiar with the singers who participated in the first episode that he recommended several of them!
This is purely out of kindness, because the first season of the show was relatively unknown, and there were very few promising talents willing to volunteer. To improve the quality of the participating singers, it was necessary to rely on people within the industry to help find them.

After sending Wang Hao away, Chen Guiliang suddenly remembered "A Bite of China".

Since they're going to acquire the rights to "The Voice of China," there's no way they'd give up on this documentary series.

Chen Guiliang immediately took out his phone and called Wang Xiaoya. They had met twice before while recording a program and exchanged phone numbers.

"President Chen?" Wang Xiaoya was pleasantly surprised to receive the call.

Chen Guiliang asked, "I heard that CCTV is filming a food documentary called 'A Bite of China'? Is there such a documentary?"

Wang Xiaoya was completely confused: "I don't know either. Should I hang up and ask my other colleagues?"

"This is troublesome," Chen Guiliang said.

Wang Xiaoya smiled and said, "No trouble at all."

Chen Guiliang reciprocated: "Could Ms. Wang be the host for this year's ByteDance Night?"

"No problem!" Wang Xiaoya quickly agreed.

With the hosting fee and the opportunity to expand her influence, Wang Xiaoya was naturally willing to come.

CCTV hosts are generally not allowed to take on private jobs, but it depends on the specific circumstances.

Activities that are considered too low-class are unlikely to be approved, and participation without prior notification will result in penalties. Examples include: corporate annual meetings, real estate openings, weddings, birthday banquets, etc.

For large-scale events like ByteDance Night, as long as you don't attend them frequently, there are generally no problems after reporting them.

More than an hour later, Wang Xiaoya called Chen Guiliang back: "There is a documentary called 'A Bite of China,' which was planned ten years ago but was shelved due to funding issues. It was officially approved last year and filming started two and a half months ago."

"Have the online video copyrights been sold?" Chen Guiliang asked.

Wang Xiaoya said, "We contacted them before filming started, but no website was willing to buy it. I asked my colleagues in the sales department, and they said that if we couldn't find a buyer, we would have to treat Zhang Chaoyang to dinner and sell it to Sohu Video through personal connections."

This woman is amazing. Chen Guiliang only said he would ask around, and she found out all the details.

Currently, the online rights to TV dramas sell for 200 million yuan per episode, while documentaries simply cannot be sold.

If no one else buys it, Sohu Video will definitely be the one to buy it, because Zhang Chaoyang has a good relationship with CCTV leaders. In order to maintain the relationship, Zhang Chaoyang has to give face and pay money.

After expressing his gratitude, Chen Guiliang called the CEO of AcFun: "Send someone to CCTV to buy 'A Bite of China.' A documentary... nobody watches documentaries? I'll buy it if you tell me to. Try to get the copyright term as long as possible. If CCTV is willing to sell it permanently, we'll pay any price!"

Why not let Tudou.com buy it?
You can tell from the fact that even the CEO of AcFun (A-site) is reluctant that nobody buys documentary copyrights these days. Normally, the online streaming rights for documentaries are included when buying film and television copyrights.

Chen Guiliang owns 100% of AcFun, so he can naturally issue orders forcefully. As for Tudou.com, he doesn't have a controlling stake, so he can try to persuade them, but he's too lazy to waste his breath.

Once "A Bite of China" becomes a hit, Tudou.com executives will naturally approach them, hoping to acquire the broadcasting rights from AcFun through distribution.

What if Tencent Video, Sohu Video, and iQiyi join forces to buy movies?
Chen Guiliang seemed to have foreseen the future, directly bidding high prices to snatch up good films.

Targeted film purchasing – every film you buy becomes a hit!
(End of this chapter)