Streams and Schemes

Deep within the Form F-1 that Shenzhen-based Tencent Music Entertainment Group prepared a prospectus for the SEC back in 2018, there is an interesting section titled “Fragmented music content providers and popularity of long-tail content.”

Know that TME, which is the leading music streaming service in China, operates music apps including QQ Music Kugou Music, Kuwo Music, and WeSing. The company’s platform includes online music, online audio, online karaoke, music-centric live streaming and online concert services. Although it is a fraction of the size of Spotify, given that there are about 1-billion internet users in China (in the U.S. for example, the number is along the lines of 312-million, less than half of the number of users in India, at 834-million), there is something to say for the upside opportunities of TME, which reported last month that it has 76.2-million paying users, a 36% year-over-year increase, which is some serious traction.

The fragmented music section includes:

• “China has a more fragmented music content creation and copyright ownership landscape as compared to developed economies. In contrast to the U.S. market where the top music labels have strong market positions, China provides a more conducive environment for online music platforms. According to iResearch, in terms of the volume of tracks streamed, the top five labels in China had a combined market share of less than 30% in 2017, while the top five labels globally had a combined market share of approximately 85%.”
• “China also has a fast growing market for long-tail, niche music content, including those that belong to niche genres, driven by an increasing demand for diversified and personalized online entertainment experiences.”
• “The younger generation in China, represented by Generation Z (born between 1990 and 2009), is also a key driving force of the market for long-tail entertainment content. They are generally technology savvy, creative, expressive, and willing to pay for quality content. They are also actively involved in content creation through interactive online platforms, driving both the supply and demand for long-tail music content.”

While there are undoubtedly changes between 2018 and 2022 and so this focus on niche music may be somewhat attenuated, in its Form 6-K filing with the SEC for March 2022 there is the following:
“As of the end of the fourth quarter, the number of indie musicians on our Tencent Musician Platform reached 300,000.”

And more intriguing, it points out that its original content production capabilities led to “notable hits such as ‘Lonely City,’ which shot to the No. 1 spot in the charts within the Chinese Ancient Style category upon release and inspired nearly 1 billion streams in the fourth quarter.”

So what we have here is a system that is working to attract musicians who might otherwise have zero audio visibility (yes, an odd term) and that in some instances that has led to some noticeable success.
“Chinese Ancient Style category”? One-billion streams.

It is one thing for an Ed Sheeran cut to have three-billion cumulative streams, but one billion in a quarter, one billion in the “Ancient Style” category?

What is the Western analog to that? Sting’s Songs from the Labyrinth, which pretty much proved that outside of those who attend Renaissance Faires lute music doesn’t resonate well.

Apparently Spotify (which, oddly enough, owns 9% of Tencent Music while Tencent Music’s parent company owns 7.5% of Spotify) isn’t as interested in maintaining access to the long-tail music because if that tail isn’t of a sufficient Y-axis height on a monthly basis, hitting 10,000 streams, that given song is going to find itself in a labyrinth without a thread.


Labyrinths bring to mind the Minotaur, and while thinking of mythical beasts, it goes to the Kraken, which leads to Ginni Thomas, wife of Supreme Court Associate Justice Clarence Thomas, (Ms. Thomas texted to then-Trump chief of staff Mark Meadows ““Release the Kraken and save us from the left taking America down”), which leads us to Prince.

Yes, that Prince. No, he doesn’t necessarily have anything to do with imaginative creatures, nor with the results of the 2020 election, as he left this veil a few months before the 2016 presidential.

Lynn Goldsmith is, among other vocational endeavors, a photographer whose work has been used on album covers for musicians including the B-52’s, Bob Marley, Daniel Lanois, Dr. Dre, Ted Nugent, Grand Funk Railroad, Kiss, INXS, Marshall Crenshaw, Miles Davis, Todd Rundgren, and The Waterboys, to name just some names.

In 1981 Goldsmith got an assignment from Newsweek to photograph Prince. In 1984, on commission from Vanity Fair (that year marked the start of the Tina Brown era at the publication), Andy Warhol created what became the “Prince Series,” a series of silkscreens based on one of Goldsmith’s photographs. Goldsmith had licensed the photo to Vanity Fair for use as an “artist’s reference” with the result being used twice in the magazine with credit back to her.

In 2016, Conde Nast, the publisher of Vanity Fair, put out a Prince tribute publication. Goldsmith claimed that it was only then that she became aware of Warhol’s use, which, clearly, was a bit more extensive than she, apparently, had anticipated. He, incidentally, had died in 1987 and responsibility for his work went to The Andy Warhol Foundation for the Visual Arts.

So lawsuits commenced. In July 2019 the Southern District of New York found for the Warhol Foundation, maintain that there was fair use of the photograph (i.e., the subsequent work was sufficiently different from the original to be its own thing, as it were). In March 2021 the Second U.S. Circuit Court of Appeals reversed that decision.

And last week the U.S. Supreme Court announced that it would review the contentious copyright case.

No word at this time whether Gini Thomas is going to start a “Stop the Appropriation!” campaign or whether Clarence Thomas will recuse himself from the case.

Leave a Reply

Your email address will not be published. Required fields are marked *