Rap of China Brings About Marriage Between Culture and Capital

The average seasonal production cost for a network variety show in China is between 20 and 60 million yuan under the current market conditions. By investing 200 million yuan into a music talent show, iQiyi is taking quite a gamble. Why exactly did iQiyi set its eyes on such a non-mainstream reality show?

A guitar and a stool, these are all a folk singer’s got with him singing about his harsh life on stage. Rappers on the other hand, wear big gold chains around their necks and rap about the need to have a Farrari or Fan Bingbing (a popular Chinese actress)! This is the true core of hip-hop music; the naked truth behind the whole hip-hop culture—materialistic needs.

This summer, the network variety show, Rap of China, successfully became mainstream with a 200-million-yuan investment. Rappers and producers are shining brightly under the media spotlight. And with waves of hip-hop music, celebrity endorsements, and commercial performances coming one after another, this popular TV show brought about a new round of marriage between culture and capital.

Becoming Mainstream

The director of Rap of China, Che Che said, “We walked into Gong Yu’s (CEO of iQiyi) office and made a 5-minute presentation. After which, he had only two questions for me: Is this what young folks are into nowadays? And would we break even during our second year of broadcast?”

For starters, the 5 million views that Rap of China has accumulated today already answers the first question. Furthermore, the show was sponsored by Nongfu Spring (a Chinese bottled water company) with over 120 million yuan, as well as other businesses such as Xiaomi and McDonald’s. Cost-wise, it wasn’t much of a problem for Rap of China to break even during the first year of airing the show.

Admittedly, Rap of China imitated the Korean variety show SMTM. Che did not expect the program to be all the rage. “Program innovation is a great risk in itself. The reason why many Chinese TV programs do not want to innovate is because imitation of successful programs can greatly reduce risks.” The deputy director of Guizhou Satellite TV and professor at China University of Communications, Lang Jinsong, tells Tencent financial.

Che says that when he was producing the electronic music-based Zhejiang TV summer variety show—Heroes of Remix, he spent a year conducting market research in Shanghai. However, he conducted no research whatsoever when he produced Rap of China, this relatively new music show.

The average seasonal production cost for a network variety show in China is between 20 and 60 million yuan under the current market conditions. By investing 200 million yuan into a music talent show, iQiyi is taking quite a gamble. Why exactly did iQiyi set its eyes on such a non-mainstream reality show?

The hip-hop culture was brought to China during the 80s through the film breakin’ and others, and brought about the first wave of hip-hop boom.

It wasn’t until 2000 when Chinese hip-hop began to be in line with the world. Hip-hop music gradually became localized. Many hip-hop groups Longjing (Dragonwell), XJK and other hip-hop groups emerged and quickly became popular.

“Mainstream music should not be limited to Hong Kong and Taiwanese pop songs only. Many great artists have long been integrating hip-hop elements into their music. Thus, this is now the mainstream music of the future.” A representative at Leshi TV, Xiao Laohu (Tiger) says.

According to the statistics published by Small Antlers Think Tank of Music Business of China (a music news website), there are over 40 hip-hop brands domestically in China during 2016. This figure is second to the popular, experimental noise and other genres of music.

As early as last year in June, the founder of the Chinese record label Modern Sky Shen Lihui said, “The spread of hip-hop culture was obvious and inevitable: Everything from Britpop to folk; rock to electronic; art exhibitions to music festivals, etc.” Earlier this year, Modern Sky signed Edison Chen, Safflower, TT and other well-known rappers in China, and established a brand new hip-hop brand. The series of developments that the music market went through is seen as a turn in the music industry. Shen Yue, vice president of the record label told Tencent Finance, “The program coordinators at iQiyi told us that it gives them great confidence in producing Rap of China, with Modern Sky’s establishment of the hip-hop brand.”

The music market experienced a change. 2017 is considered as the one year anniversary of hip-hop music business development in China. Chen Wei, the head producer said as well, “The hip-hop era has arrived.”

TV Shows Economy Chain

In 2004, Hunan Satellite Television hosted the singing show Super Girl; everyone loved it. 10 years after that, Zhejiang Television produced the popular show—The Voice of China; the show boomed and spread like wildfire. And now, we have the network variety show Rap of China, which brought a whole bunch of hip hop artists onto the stage under the spotlight.

Even though the styles and platforms of reality shows, which are a part of the whole “Eyeball economy”, have changed, the music industry under the “TV shows economy” is still continuing.

Cao Haitao, an experienced investor of the film and television industry said, “At present, the music industry wants to convert assets into cash, and the best way for them to approach this is to cooperate with film and television platforms. It’s very difficult for live houses and CDs to achieve this. This is why the most popular domestic reality shows are all music programs.”

The most common way for reality shows to convert assets into cash is through advertisements, followed by the music and commercial performances of followers.

Super Girl had a yoghurt advertisement with Mengniu Dairy. The Voice of China is inseparable from advertising with JDB (a Chinese manufacturer of nonalcoholic beverages). Cao also said, “Programs often buy out satellite TV broadcasting time just to play commercials during the gaps. And that’s how Canxing Productions is able to make a profit—just through the money difference here.”

The Internet is going through an even more in-depth stage of development. Young users have clustered towards video sites now. Entertainment shows and network drama are being streamed on iQiyi, Tencent, Youku and other video platforms. iQiyi’s 200-million-yuan investment forged Rap of China. Nongfu Spring’s 120 million contributed heavily too. And once again, this is yet another one of entertainment industry’s challenge to traditional TV.

In addition to advertising, Rap of China’s follow-up advertisements, commercial performances, advertising endorsements, new albums, the raising of super stars have all been considered as a new round of capital use in the “Eyeball economy”.

Now that the program’s extremely popular, its effects can be seen directly reflected on the net worth of contestants and producers being on the rise constantly. Hip-hop singer Sun Xu answered the questions from Tencent Finance with just this: beyond your imagination.

According to Shen, “A rapper’s appearance on the show costs about 10,000 yuan originally. But now, it may be around 20 million!” It is reported that a performance from reality show singer VaVa costs about 20 million yuan, and about 250,000 from a rapper like PG ONE.

McDonald’s, who went 10 years without any celebrity branding, chose Kris Wu this summer, as their celebrity spokesman. McDonald’s China CEO Zhang Jia Yin said, “Being a post-90s kid himself, Kris no only enjoys expressing himself, he’s also a great hip-hop artist. This is very consistent with our brand. And that’s why we chose him.”

Being a handsome young lad, Wu’s got quite a high net worth. Rumors are that ad campaigns starring Wu costs more than 700 million yuan per two years. In addition to McDonald’s, Wu’s even been asked by Lei Jun—the CEO of Xiaomi—to become the sales celebrity brand image. Baidu’s statistics have shown that since June, the search rate for Kris Wu online skyrocketed. Advertisement prices are in fact based on the search traffic brought about by individual artists. Through Rap of China, Wu’s ad campaign costs and the number of ads he’s doing are on the rise as we speak.

And it’s not just Wu. Other popular artists—MC Jin, TT, GAI—have all began cooperating with businesses and products like Alipay, New balance, King of Glory and others that young folks are into nowadays.

Vice president at Modern Sky, Shen Yue, told Tencent Finance, “Trends determine which paths to take. This new wave of hip-hop music paved the way for us to develop our artists.” Before the hip-hop TV programs became this hot, Modern Sky seemed to have already expected its immense popularity and signed with several hip-hop musicians. And the company has promoted these hip-hop musicians via four different approaches: Strawberry Music Festival, hip-hop music copyright, fashion and commercial packaging.

Business Prospects

Hip-hop music is a mainstream musical genre on the American music market. BuzzAngle’s recent “2017 US Mid-Year Music Consumption Market Report” has indicated that hip-hop music has become the American favourite when back in 2016, the genre was still only ranked second.

The American market of hip-hop music is certainly not small, but what’s more impressive is the whole American hip-hop industry. Data have shown that in the United States, consumption behavior related to the hip-hop industry accounts for about a quarter.

A well-known Taiwanese cultural critic Nan Fangshuo said, “Through the process of capitalist commercialization, the hip-hop style has been ‘occupied’ and ‘optimized’ in a sense, and has gradually become a new fashion.”

Hip-hop culture originated from the streets of America. But it gradually gained momentum and made its way to high quality living and fashion, also raising the prices upwards drastically.

The famous American black rap band, Run-D.M.C. and their song “My Adidas”, is regarded as a classic business example of hip-hop culture. Kanye has also worked with NIKE and Adidas and produced the coconut line of footwear, a pair of which costs millions as well.

“Hip-hop has already become an industry and an ideology, where the drawback is becoming a money printer”, says the American cultural critics on the other side of the Atlantic. But for China, hip-hop culture has just begun its journey. It’s hard to say how it’ll develop.

Capitalism has ventured into the market of hip-hop before Rap of China even became popular. Earlier this year, NBA Hupu invested millions of Hong Kong dollars into CLOT, a company founded by Edison Chen; Wang Sicong’s Prometheus Capital joined in on PD House’s Series A financing; Popular singer Hu Haiquan invested in the hip-hop-centred Pop Culture Group.

“There are obvious advantages for celebrities to star in popular brands.” Famous Chinese MC, Li Chen, told Tencent Finance that before Wilber Pan joined the Rap of China casting crew, he’s already began his own capital investment in popular brands. In 2009, Pan and Li invested one million respectively in Shanghai and set up a popular brand—NPC. Now, tons of celebrities—Edison Chen, Jay Chou, Leo Ku, MC Hotdog—are joining in on the investment as well. Near the end of 2016, Edison Chen disclosed in his documentary that the annual income from these investments has reached an unbelievable amount of over 10 million US dollars.

Cao Haitao believes that, “The development of hip-hop cultural industry in China isn’t exactly dictated by a momentary trend from a show. The key is to look at whether or not China has the necessary soil for it to grow. Although Chinese culture has its own subtle characteristics too.”

As for just how much potential the hip-hop industry has for growth, well, the ball has already begun to roll. Thus, one might as well sit back and see how far it can go.

This article originally appeared in Tencent Finance and was translated by Pandaily.

Click here to read the original Chinese article.