Huayu: A master director who debuted as a singer

Chapter 98 Recording Contract

March 29th, Guangzhou.

Zheng Hui was watching TV at the company to pass the time. TVB shows are available in Guangzhou, and he was watching "The Chinese Feast" when his phone on the table vibrated.

Zheng Hui glanced at the caller ID; it was a Hong Kong long-distance number. He pressed the answer button, and Zheng Donghan's laughter immediately came from the other end of the line.

"Hui-zai, what have you been up to in Guangzhou lately? Have you read today's newspaper?"

Zheng Hui replied, "Nothing much, I'm just watching TVB. What's up, is there any big news from Hong Kong?"

Zheng Donghan said, "This is big news for you! This morning, the nominees for the 9th Golden Melody Awards in Taiwan were officially announced!"

Zheng Hui raised an eyebrow, calculating the time; it was indeed time for the Golden Melody Awards nominations to be announced.

"How were your grades?" Zheng Hui asked.

Zheng Donghan started rattling off a list of nominations on the other end of the phone: "You got five major nominations in total!"

"Best Lyricist Award, nominated work: Red Rose".

"Best Composer Award, nominated work: 'King of Karaoke'".

"Song of the Year Award, nominated for 'Ten Years'."

"The nominee for Best Pop Vocal Album, the biggest award, is 'Floating Life'!"

At this point, Zheng Donghan deliberately paused, waiting for Zheng Hui's reaction.

"Four now." Zheng Hui nodded slightly. The quality of the album "Floating Life" speaks for itself; these nominations were well-deserved. "And one more?"

"The last one, and also the most prestigious one! Best Mandarin Male Singer Award! Also known as the King of Singers!"

"Not bad, those seven days of seclusion weren't a waste." Zheng Hui smiled. "But Mr. Zheng, why didn't you nominate me for the Best Newcomer Award? This is a once-in-a-lifetime opportunity to be a newcomer."

Upon hearing this question, Zheng Donghan on the other end of the phone sighed helplessly.

"You think I don't want to? It's infuriating just thinking about it. Those old fogies at the Golden Melody Awards have such nitpicky, fixed rules!"

Zheng Donghan explained: "The Golden Melody Awards clearly stipulate that nominees for Best New Artist must be singers whose first album is their own."

Your first album was "Stubborn", but it was first released in mainland China and later released in Hong Kong and Taiwan through PolyGram.

The Golden Melody Awards have another strict rule: only albums that are first released in Taiwan or simultaneously released globally are eligible for nomination!

"Therefore, because 'Stubborn' was first published in mainland China, it didn't even qualify for the application."

While "Floating Life" was released simultaneously in Hong Kong and Taiwan, thus meeting the eligibility requirements, it is nominally your second album, and therefore ineligible to compete for the Best Newcomer Award.

Zheng Hui understood the intricacies of the situation and didn't feel any regret. Even the best newcomer award couldn't compare to the prestige of the Best Male Singer and Best Album awards.

"What about the dialect award?" Zheng Hui casually joked, "Aren't the Cantonese songs on my album, like 'Next Year Today' and 'Unromantic Crime,' qualified for a dialect award?"

Cheng Tung-han was even angrier about this: "The Golden Melody Awards' dialect awards only recognize Hokkien, Hakka, and indigenous languages."

In their evaluation system, Cantonese is directly categorized as a foreign language! They don't even have a separate category for Cantonese, so how can they submit your application?

"There are so many rules." Zheng Hui shook his head.

"No matter how many rules there are, they can't stop your current momentum. Five nominations, all for the most prestigious awards! Hui, you're definitely the favorite at this year's Golden Melody Awards!"

"I'm calling you today for two things. First, you absolutely must make time to attend the Golden Melody Awards ceremony at the Sun Yat-sen Memorial Hall in Taipei on April 30th! If you're there, the award is practically guaranteed."

"The second thing is that Universal's acquisition of PolyGram is basically complete."

"I plan to hold a press conference on May 1st, the day after the Golden Melody Awards ceremony, to officially announce the signing of Zheng Hui by Universal Music, taking advantage of your award!"

"Given the quality of 'Floating Life' and your current influence, you should be able to win at least two awards at this year's Golden Melody Awards."

The night before, you've just been crowned king or won Best Album at the Golden Melody Awards, and the next morning, the entertainment headlines are all about you.

At this moment of greatest anticipation, we announce that you have signed a record-breaking contract with Universal!

"This is a way to maximize the benefits and publicity of your fame and Universal's brand. What do you think?"

This is indeed a perfect business loop. With awards as endorsement and capital as a driving force, Zheng Hui's status can be firmly established at the superstar level overnight.

"I have no objection." Zheng Hui agreed, and he was also looking forward to seeing what kind of sky-high price Zheng Donghan was talking about.

"Okay! Since you have no objections, then you should take some time to come to Hong Kong soon."

"We're holding a press conference on May 1st, so we need to finalize the contract privately beforehand. Come over here, let's sit down and discuss your upcoming contract."

"Okay, I'll go tomorrow."

After hanging up the phone, Zheng Hui glanced at the calendar on the table. He was only going to register for the joint entrance exam on April 10th. All the accounts that needed to be settled in Guangzhou had been sorted out, so he had plenty of time.

He walked out of the office, gave a few instructions to Chen Jianguo who was doing accounts outside, and then called Lin Dashan over.

"Brother Dashan, stop fussing around and go buy two train tickets to Hong Kong the fastest."

The next day at noon, at the Red Railway Station.

As Zheng Hui and Lin Dashan stepped out of the gate, they saw Manager Chen waiting outside. Unlike before, a Mercedes-Benz sedan was parked next to Manager Chen, with the driver standing respectfully by the car door.

"Mr. Zheng! You must be tired from your journey!"

When Manager Chen saw Zheng Hui, he almost ran to greet him, his face full of enthusiastic smiles, and personally opened the back door for him.

"Mr. Zheng is already waiting for you at the company. He specifically instructed me to drive this car to pick you up."

Zheng Hui could sense that his treatment was completely different from when he last came to Hong Kong.

He was not surprised by Zheng Donghan's enthusiasm; 1.3 million copies of "Floating Life" were sold.

In today's Chinese music scene, those who can sell this many records are all established superstars. And Zheng Hui, he's only nineteen!

What does nineteen years old mean for a singer-songwriter? It means his creative life has just begun, and he's at his peak of productivity. Judging from the quality of his first two albums, the possibility of him faltering later on is extremely low.

This means that signing Zheng Hui is equivalent to signing a superstar who will continuously generate wealth for the next ten years.

Wouldn't giants like Warner and Sony be envious of someone like that?

They're all secretly plotting to poach him. Zheng Donghan absolutely has to treat Zheng Hui like royalty and be incredibly enthusiastic.

The car stopped downstairs at PolyGram Company. Manager Chen led Zheng Hui in the private elevator, which took them directly to the president's office on the top floor.

Zheng Donghan was already waiting at the door.

"Hui-zai! You must be tired from the journey!"

He laughed and stepped forward, giving Zheng Hui a tight hug.

"Mr. Zheng, you're too kind."

"We're all family, no need for formalities!" Zheng Donghan patted his arm and led him into the office.

The secretary served tea, then quietly withdrew and closed the door.

Without wasting words, Zheng Donghan picked up the top document on the table and pushed it in front of Zheng Hui.

"Hui, this is the first and highest-level artist contract drafted in Greater China after PolyGram was merged into Universal and restructured. Take a look at the terms first."

Zheng Hui picked up the contract and turned to the first page.

His gaze fell directly on the most crucial clauses.

First, the contract term is five albums.

Second, royalty sharing, 22%.

This is a very generous figure. Even for singers at the level of the Four Heavenly Kings, the royalty share usually fluctuates between 20% and 25%.

For a newcomer who has only released two albums, giving him 22% is almost an exceptional treatment.

Zheng Hui continued reading.

Third, a prepayment of HK$50 million for signing the contract.

Upon seeing this number, Zheng Hui's eyelids twitched.

Fifty million!

He knew Zheng Donghan would be very generous, but he didn't expect him to be this generous.

At this point in 1999, Hong Kong had just experienced the Asian financial crisis, the property market had plummeted, and negative equity was everywhere.

HK$50 million in cash is enough to buy a slightly out-of-the-way luxury house on Victoria Peak, a famous area in Hong Kong.

After regaining his senses, Zheng Hui immediately remembered another incident: in 1998, Leon Lai was poached from PolyGram by Sony Music with a record signing fee of 40 million.

That poaching incident left a deep scar on PolyGram, causing them to lose face within the industry.

Now that Universal is restructuring PolyGram, it's time to establish its authority. The fact that the other party is willing to spend a staggering 50 million this time is likely largely a response to what happened back then.

Zheng Hui looked up: "Mr. Zheng, that's quite a generous offer. A signing fee of fifty million, you probably can't find another company like that in Hong Kong today."

Jung Dong-han confidently stated, "I, Jung Dong-han, have never misjudged people. Your first two albums have already proven your worth. This 50 million is to buy your talent for the next five years."

"The offer is indeed very tempting." Zheng Hui continued flipping through the pages.

He knew very well that capitalists never do business at a loss. With such high royalties and exorbitant signing fees, there must be some benefits he would have to relinquish in the subsequent terms.

Sure enough, when he turned to the page about copyright ownership, Zheng Hui frowned slightly.

This is exactly what he cares about most.

The terms clearly state that the album recording copyright (mastering rights) will be permanently shared by both parties.

Profit Distribution Details: During the contract period and the following five years (a total of ten years), Universal Music will receive 80% of the revenue generated from the copyright of the audio tapes, and Zheng Hui will receive 20%.

Ten years later, the proportions reversed. Zheng Hui held 80%, while Universal Music held 20%.

An additional special note is added: the above copyright terms for the recordings are limited to Hong Kong, Macau, Taiwan, and overseas regions. All copyright revenue generated in mainland China remains the personal property of Zheng Hui.

Giving all the mainland copyrights to Zheng Hui may seem like a huge concession, but it's not actually the case.

According to the internal assessment of Zheng Donghan and the senior management of Universal Music, piracy is rampant in the mainland market, and the cost of protecting the rights of genuine audio-visual products is extremely high with minimal results.

In their view, the mainland market has a very poor awareness of copyright, and even in ten years, there is no hope of making any significant progress in copyright fees.

Since it's a piece of fatty meat that can't be eaten anytime soon, why not be generous and give it to Zheng Hui? It'll do him a favor and win his favor in return.

As for the recording copyrights in Hong Kong, Macau, Taiwan, and overseas, those are the true core assets of record companies.

The company accounted for the majority of the profits in the first ten years, but Zheng Hui accounted for the majority after that.

The most profitable commercial lifespan of a pop song or album is only the first three to five years after its release.

Once the cassette tapes and CDs are sold out, and the money from radio charts and KTV licensing fees has been collected, the commercial value of the song has been essentially squeezed dry.

Ten years later, the song became an old song. Except for the occasional compilation album that could make some money, the master tapes were basically left to gather dust in the company's archives.

Therefore, Zheng Donghan is willing to relinquish 80% of the profits to Zheng Hui ten years from now. Because in his eyes, 80% ten years from now might not even be worth 1% now.

However, Zheng Donghan did not know the future, but Zheng Hui did.

As a reborn individual, Zheng Hui was acutely aware of what recording copyrights meant for the future!

After the turn of the millennium, the era of ringtones suddenly emerged, where the revenue from downloading a popular song as a ringtone could reach tens of millions of yuan per month!

Later, with the widespread adoption of smartphones, streaming music platforms (such as QQ Music and NetEase Cloud Music) emerged.

The arrival of the digital copyright era has given classic old songs an even more terrifying money-making ability than before.

Major platforms are spending tens or even hundreds of millions of yuan on copyright fees to compete for exclusive rights. A classic hit song can bring the owner of the master tape millions of yuan in net profit every year just from the platform's revenue sharing and licensing fees.

This isn't some dusty old song; it's a spring gushing forth with endless gold!

Even if it's only 20%, it's still an astronomical figure.

"Mr. Zheng," Zheng Hui put down the contract and looked up at Zheng Donghan, "I feel the sincerity in this contract. I have no objection to any of the terms, except for one small request."

"you say."

"Regarding the recording copyright," Zheng Hui's gaze fell on the page of the contract, "I understand that the company needs to maintain control during the peak revenue period. However, I personally don't like the perpetual ownership model."

He carefully chose his words, speaking sincerely, "These songs are like my children. I hope that one day I can buy back their full copyrights."

"So, could I add a supplementary clause to the contract, stipulating a price so that after ten years I can choose to buy back all the recording rights to these five albums?"

Upon hearing this, Zheng Donghan leaned back on the sofa and gave Zheng Hui a deep look.

He was somewhat surprised.

He has seen countless artists argue fiercely over contracts for money, fame, and higher royalties.

But Zheng Hui is the first person to look ten years ahead and be willing to give up some immediate benefits for a vague and uncertain complete copyright.

Zheng Donghan remained silent for a moment, quickly weighing the pros and cons.

ten years.

Ten years is enough time for Universal to recoup its profits from these five albums, and even far exceed expectations.

Ten years later, the remaining value of these recording copyrights was not much. Rather than holding onto them and collecting only a few meager profits each year, it would be better to do a favor and sell them to Zheng Hui to maintain a good relationship with this future superstar.

Having figured this out, Zheng Donghan's smile returned.

"Hui, I admire your passion for music."

He nodded: "No problem, I agree to add this clause."

"To show my sincerity and to ensure a long-term and pleasant cooperation between us, I'll offer you the most reasonable price."

He picked up a pen and wrote a line in the blank space of the contract.

"Ten years from now, you can buy back the recording rights to these five albums for HK$500,000 each in one go."

The total is two and a half million.

Five hundred thousand per piece.

This price is so low it's almost symbolic.

Zheng Hui knew that Zheng Donghan was trying to curry favor with him and pave the way for a longer-term cooperation in the future.

"Thank you, Mr. Zheng."

Zheng Hui stood up and solemnly extended his hand.