Japan-based Entertainment Management Firm Partners with Chinese Platform NetEase Cloud Music to Deliver Copyright-protected Japanese Music to Chinese Audiences

HANGZHOU, China, Feb. 28, 2017 /PRNewswire/ -- Japan's biggest music entertainment firm, Avex Group Holdings Inc., and leading Chinese digital music platform, NetEase Cloud Music, on February 27th jointly announced the signing of an agreement forming a strategic partnership that grants the Chinese platform an exclusive license to Japanese music copyrights in mainland China. Both parties have said that they are committed to the introduction and promotion of a legal framework for the protection of the copyright of Japanese music in the mainland China market.

With the signing of the agreement, Avex has granted NetEase Cloud Music the exclusive license in mainland China to the copyright of the entire inventory of songs of artists that have signed with Avex, placing NetEase Cloud Music in the position of being the platform with the largest collection of Japanese music with proper copyright protection in mainland China. At the same time, the Chinese platform will become the exclusive management agent for the copyrights of these songs in mainland China, in terms of promotion, sales and distribution of the music as well as administration of the copyright, in a move to help Avex expand in the market.

Moreover, the strategic partnership is a milestone in that it is the first cooperation formed between a major Japanese entertainment firm and a digital music platform in mainland China as well as the first sizable entry of copyright-protected Japanese digital music into the mainland China market. Before this agreement was signed, there had been no precedent for a mainland China music platform importing Japanese digital music on such a scale.

Avex Forms a Strategic Partnership with NetEase Cloud Music in a Move to Expand into the Mainland China Music Market

Avex Group Holdings Inc. was established in 1988 with headquarters located in Tokyo, Japan. Avex is by far Japan's biggest entertainment firm and one of the largest independent record companies worldwide. The firm has dominated the market for years in terms of record sales in Japan.

As the leader in Japanese popular music, also known as J-Pop, Avex discovered and now manages many of the country's most popular acts including Ayumi Hamasaki, Every Little Thing, Koda Kumi, Ai Otsuka, AAA and the Wagakki Band. With the strategic agreement between Avex and NetEase Cloud Music in place, the entire collection of Japanese songs from these well-known groups as well as many others becomes available on the NetEase Cloud Music platform. New songs from any of these signed artists or any new acts that are signed up by Avex will be quickly added to the NetEase Cloud Music platform and, at the same time, promoted to Chinese music fans. With a further deepening of the cooperation expected in due course, Avex's stable of artists can look forward to face-to-face meetings with Chinese music fans through diverse offline events hosted by NetEase Cloud Music.

Avex first set up an office in Taiwan office as early as 1998, when it planned its first formal entry into the Chinese market. The Taiwan office was supposed to act as a bridge into the mainland market, however, the Japanese firm shortly abandoned the effort, due to the lack of any form of legal protection for copyright in mainland China at the time. Signing the agreement with NetEase Cloud Music, as its strategy for entering the mainland Chinese Market, signals renewed expectations in terms of the market and the firm's long term plan of promoting Japanese music to China.

The change in terms of expectations is directly related to efforts over the past two years on the part of the Chinese regulator, the State Copyright Administration of China, working in concert with the major music platforms to bring order to the market, with the welcomed result that an environment where Chinese audiophiles now expect to pay for digital streams and downloads has been created. The change in the environment over the two years since the regulator stepped in can be termed "night and day", compared to the chaotic situation that existed earlier. With these changes in place, the timing couldn't have been better for Avex to enter the music market with the greatest potential in the world.

The Deal Assures NetEase Cloud Music's Access to Avex's Japanese Music Database, Making the NetEase Platform the Biggest Database of Japanese Music in China.

After making the decision to expand into mainland China, Avex, who was very circumspect in choosing its partner, eventually settled on NetEase Cloud Music as the best-positioned entity to partner with.

NetEase Cloud Music, the on-demand music streaming service of Chinese internet technology giant NetEase, Inc, was launched in 2013 and quickly took a meaningful share of the intensively competitive market while building a sizeable and loyal fan base. By July 2016, the number of NetEase Cloud Music users had broken 200 million mark, assuring NetEase Music's place among the top online music platforms in China.

Avex chose NetEase Cloud Music as the exclusive music platform for its vast Japanese music library, not only because of NetEase Cloud Music's excellent reputation, its professional management team and promising growth prospects, but also due to the large number of Japanese music lovers that had been identified as being users of the NetEase Cloud Music platform.

Among all the Chinese platforms, even before the signing, NetEase was the one that already had the most number of Japanese songs and had already attracted a large base of J-Pop lovers. The new deal brings in such a large treasure trove of Japanese music that the overall experience for these fans is sure to be vastly enhanced.

NetEase Cloud Music CEO Zhu Yiwen, in his presentation accompanying the announcement, explained that the Chinese market has developed an active interest in and is witnessing a rapidly increasing demand for Japanese music and this is what pushed the platform, in a move to satisfy that demand, to seek out a Japanese partner that could assure access to a database of Japanese music with proper copyright protections. According to usage data from the music platform, there has been, what he termed, an explosive increase in the number of times a Japanese song has been listening to, especially songs associated with Japanese animation, comics and games (ACG), with the number of music streams from Japan increasing 80% over the previous year, while ACG-related music saw its streams soar a whopping 280%. Among these users, it is mainly the youth segment that dominates, especially fans born after 1990, signaling a major shift in the making in terms of China's music culture.

Zhu Yiwen added, in the future NetEase Cloud Music plans to diversify and deepen its collaborations with Japanese entertainment firms including Avex, as part of a long term plan to introduce more quality Japanese music to China and to Chinese music fans.

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