Joint Venture Taps Vast Chinese Catalog

China's admission into the World Trade Organization in 2001 caused the state-controlled China Record Corp. to seek profit-driven international trade. Now, a joint venture between CRC and Los Angeles-based holding company Aim Group is poised to exploit worldwide the publishing and mechanical rights to the mainland's vast music catalog.

Equally significant, the new company, CRC Jianian Cultural Development, is charged with managing the use of Western copyrights in mainland China.

CRC executive VP Li Xiaoping says the company has made it a priority to reach out to the West through CRC Jianian. "We have a broad-based desire to serve as a pipeline for Western product into China as well as a mandate to promote and market Chinese product to the West."

Entertainment attorney Frank Mayor, a partner on the Aim Group side of CRC Jianian with publishing veteran Peter Jansson, says, "The revenue streams from mainland China for representation of catalog are limitless. We're talking billions of dollars. To this point no one has been able to effectively collect [royalties] for Western product in mainland China. And it's a remarkable opportunity for their music worldwide, because this material has never been collected upon anywhere in the world."

4,000-YEAR-OLD CATALOG

Jansson says the CRC catalog holds some 65,000 albums and 757,000 individual compositions and is "growing by the day." It includes, for example, the music to the Academy Award-nominated 2000 film "Crouching Tiger, Hidden Dragon," royalties for which have never been collected in any territory.

"The catalog spans 4,000 years of Chinese musical history, encompassing everything from traditional Chinese opera and folk songs to national orchestras to current-day rock and pop material—and everything in between," Jansson says. "It's the largest single catalog of copyrights in the world. Look at Warner/Chappell and EMI and they have more, total, but they're made up of many individual catalogs."

CRC's holdings, Mayor says, have never been made available outside the mainland, "so there's enormous interest, not only from film and TV but major universities like Harvard, UCLA, Oxford and the Sorbonne, for their Asian studies programs. There's a huge market of libraries and educational institutions that never had access to this material for their complete historical point of view."

Jansson says that as the only publisher member of the Chinese performing and mechanical rights society, Music Copyright Society of China, "we have the opportunity to get in on the ground floor in mainland China and shape the landscape of its music industry from the ground up—as we in the West want to see it."

The CRC Jianian (the Chinese word connotes "good" and "fortunate," according to Mayor) joint venture was signed in July 2004.

"We concluded an agreement with BMI in September for representation of the entire catalog with BMI, which is the first time any of these songs have been registered with any performing rights society in the world," Jansson says. He credits former BMI president/CEO Frances Preston's understanding of the historical and cultural "ramifications" of the catalog, resulting from her extensive travel to China.

"We're extremely pleased that BMI was chosen to represent the performing rights in the copyrights of the [CRC] in the United States," Preston's successor, Del Bryant, says. "The explosion of interest in Chinese music and culture in our country is self-evident and presents enormous possibilities for dynamic growth in the exploitation of works by Chinese composers here in the U.S.

"At the same time," Bryant continues, "our collaboration presents the opportunity to highlight our experience in copyright administration and our standards for protection of the works of composers and copyright owners. We hope that this will also foster an understanding that the rights of American composers should be appropriately protected in China, [and we] look forward to working with our new partners to fully develop these new business traditions."

The CRC Jianian principals are now heading to MIDEM, along with their representative, Marc Jacobson of law firm Greenberg Traurig.

"We're looking to partner with another musical organization—probably a combination publisher/record company, because we represent the masters as well as the publishing," says Jansson, who expects initial U.S. product releases by the end of spring.

Meanwhile, the Los Angeles-based company has opened an office in Beijing, where special emphasis will be placed on ringtones. "Right now there are 350 million cell phone users in China, and that's projected to double in the next two years," Mayor says. He notes that considerable potential is also seen in film and TV income from the 2008 Olympic Games in Beijing.

"We are also working closely with the Beijing Olympic Committee to bring a worldwide feel to cultural and musical offerings presented during the games," Li adds. "The joint venture will be our vehicle for moving forward on many avenues in the years to come."