Behind the Stage - Entrepreneurship of the Live Music Industry in China - Literature review Example

LITERATURE REVIEW

The elements of success in live music industry

Nevertheless, lies with proper logistics planning; the live music business is only successful when the parties concerned are engaging in proper logistical planning. Marshall (2013) concurs that logistical planning is one of the vital or important skills of any live music entrepreneurship. However, for the business to prosper, it is best if the entrepreneurship considers or values sourcing for a logistic expert for helping with the planning of all activities including production, venue points, and travel Manners et al. (2015). As such, the live music business cannot be successful without a proper client base, and one of the important initiatives is fostering or cementing proper relationships with the different bands, especially managers of the bands. For this case, Lebler and Weston (2015) suggest that being focused on relationship building or networks as one of the crucial skills of a live music entrepreneur; in the music industry, it is always about knowing the right person or having proper networks for getting a broad client base.

On the other hand, a live music entrepreneur must always be persistent when looking for or sourcing for clients, because he or she has to be committed towards hunting clients, say music bands and artists, and this calls for a lot of commitment, even going as far as listening to the bands or the artists (Marshall, 2013). Conversely, the research about the respective artists or bands can be enquired through colleagues but with the current technological advancement, the internet provides a fast hand source of information about different bands, artists and how they are rated in terms of performance. More so, Tschmuck (2012) recommends that in the live music industry, the entrepreneurship team, always talk to the artists and the repertoire department of respective companies as a way of learning about the new bands that are at the peak of their careers or making breakthroughs. Therefore, from the literature evidence, it is clear that the basis of the success of any live music business is the commitment to identifying and learning about the client base and going the extra mile to form good or proper relationships for initiating and fostering good business deals.

More so, the success of a live music business requires entrepreneurs with vast knowledge in financial management. Manners et al. (2015) suggest that considering or focusing on the financial management aspect of the business is one of the ways through which a live music entrepreneur respects or values the interests of the stakeholders in the business, who are the clients (bands and artists). Focusing on proper financial management or avoiding financial problems in the live music business is necessary as it sets the centre stage for avoiding inherent problems or challenges losing because this is not only bad for the artists or the bands but may also compromise the credibility or the image of the live music company. Chang and Rieple (2013) refers to some of the financial management considerations with the management of live music bands in China and Finland whereby artists, from metal bands, accept breakeven especially when the payment from the concern is covering other expense, accommodation and foods. Therefore, to a live music entrepreneur, an important consideration is how the stated budget from the planned live music covers for expenses of the artists but still being able to fulfil the financial or business objectives of the company.

Characteristics traits of live music entrepreneurs

According to Kattan and Fox (2014), the music industry is different in that one must have passion and the will to commit to towards achieving the entrepreneurship goals and objectives. For this case, Bennett (2016) is of the opinion that passion is what drives all live music entrepreneurs implying that music should not only be a business opportunity but also a passion as this will help them to dedicate time and efforts towards achieving the entrepreneurship goals. In addition, Radbill (2013) agrees that having passion as the main driver for live music entrepreneurs ensures that the individuals are well versed with the knowledge for identifying the best and most relevant music that would be appealing to the masses. In this regard, the success of live music venture will depend on the energy and enthusiasm that an individual has towards music, as a passion; the same passion that musicians have towards their music, especially in during live shows (). In addition, the enthusiasm should fit with the personality, as this will offer the drive and the commitment towards live music business (Radbill, 2013).

Just like any other business management scenario or venture, the success in the live business industry requires entrepreneurs who can overcome the many challenges and remain successful entrepreneurs. Frith (2013) recommends that a music entrepreneur requires a strong and never-die attitude towards the venture because at times, the business can be quite challenge, given the difficulty of attracting shows, getting the much-needed audience or popularity. On the other hand, Kattan and Fox (2014) offer an example of many musicians whose record labels had been rejected many times before getting recognition but through persistence and tenacity, they became successful as a suggestion that such is the attitude that any live music entrepreneur should emulate if at all he or she wants to be successful. Therefore, the existing literature evidence tries to insinuate that the basis of success in the music industry is having or portraying characteristic traits that make one resilient and particularly, taking challenges like rejection as positive to build and learn from mistakes.

Nevertheless, existing studies have suggest that live music industry requires proper collaboration because at times, the entrepreneurs will be compelled to collaborate or strike deals with some of other players in the industry (Kattan and Fox, 2014). On the other hand, collaboration does not only mean being able to strike deals with other players in the industry but also concerns the way the business or the entrepreneur organises the team. Radbill (2013) suggests that a music entrepreneur requires a team that he or she can depend on, particularly, building a team of people whose opinions count much and are of important value to the business. Notably, Frith (2013) refers to how bands work, especially musicians who have thrived as groups and defied all odds in the industry to become successful. When building a team for managing the business, the success will depend on how the collaboration leads to mutual trust, as this is necessary to take off the pressure from the business owner whereby delegation and organisation of duties becomes much easier (Bennett, 2016). The ability or the power to collaborate with the team members ensures that the team as part of the management takes the ideas from the leader serious and cases of conflicts are limited (Corser, 2015). Therefore, a live music entrepreneur should show the ability to collaborate with the team members, more so, showing the ability or the possibility of forming or cementing relationships within the team members.

Studies also exist on some of the elements and characteristics of successful entrepreneurs in the music industry, especially Bennett (2016) citing personality as an important character trait for making successful live music entrepreneurs. Accordingly, Corser (2015) suggests that any entrepreneur should portray a greater degree or extent of personality, whereby the individual shows passion for the live music business and not just doing it for the sake of profit. In this regard, being a music entrepreneur goes beyond the usual focus on the monetary gains or setting up of the business goals to be achieved but rather requires or compels individuals to show proper personality and character towards music (Manners et al., 2014). In this regard, personality and character requires that any entrepreneur in the music industry should be in harmony with the surrounding and this should be depicted by how he or she behaves, as well as the social progress towards embracing music as not only a business interest but also part of life.

Finally, an important, and perhaps the most vital aspect of engaging in live music business is the ability to take risks. Lapidaki (2016) concurs that a live music entrepreneur must always strive at all costs to take risks, thereby challenging one’s self to going beyond capabilities and business range to venture in different options. However, the risks should be taken and considered carefully as an implication that the one does not only make decisions blindly but also consider the implications of such actions on the business venture (Manners et al., 2015). On the other hand, Nytch (2012) agrees that a shift in the business focus is necessary as it concerns the consideration that the entrepreneur makes concerning how best the venture option will bring about the most benefits in comparison to other alternatives in the industry. However, Bennett (2016) advises that for any business opportunity or possibility, risks must be calculated whereby the entrepreneur considers the options with the least risks that will not have profound negative effects or impacts on the business.

The current state of live music entrepreneurship in China

China Live Music Report confirmed the growth level of the live music industry in the country, with the report indicating that the industry is currently worth 3.9 billion yuan, with an audience base of around 13.7 million people (ChinaDaily, 2015). Accordingly,ChinaDaily reported on the status of live music performance, including concerts, live house shows, musical festivals in the mainland China with the conclusion that by 2015, the music industry had grown by 6.4%. Besides, the report suggested that at outdoor live music is the most prolific business venture, projected to be at the growth of 20%. In addition, China has also recorded a major growth in the overall number of the performance venues with over 1706 stadiums and halls capable of containing large-scale music performances (ChinaDaily, 2015). Therefore, the evidence shows how live music has grown in China and as such, posed to record greater growth; this presents excellent opportunity for live music entrepreneurs.

Management and leadership styles in live music

Fober et al. (2012) state that management of live music business is the same as contemporary business management whereby success is defined by elements like effective team building. Gamble and Gilmore (2013) recommend that in live music, it is equally important for the management to develop, as well as build a team to run the business. On the other hand, the team is necessary to guide and steer the artists towards fulfilling the aims, goals, and objectives of the business. Besides, Stowell and McLean (2013) suggest that live music business requires a collaborative approach towards management because in no time, it will be possible to carry out the activities independently. On the other hand, Anderton et al. (2012) confirm that collaboration is necessary during the management of the live music business because the manager will need to coordinate the many parties involved. More so, proper management requires that the executive business management team should always strive at all costs to bring the right people into the management board because such is necessary for steering the business into enormous success (Wrigley and Emmerson, 2013). In addition, proper management of live business requires the considering of the most effective framework for developing a goal-oriented team, knows the basics of live music management and at the very least, upholding professionalism when dealing with the different stakeholders in the business (Stowell and McLean, 2013).

Given the many stakeholders or the different stakes in the live music industry, it is always imperative for the management or the entrepreneurs to consider or use the most appropriate and effective management approaches (Stowell and McLean, 2013). Just to mention, there is a myriad of options or opportunities for the live music businesses when it comes to managing the enterprise and this concerns how to deal with the agents, artists, and all vested stakes in the business. For the success of live music entrepreneurship, Martin et al. (2013) propose a directive approach towards leadership and management. The implication is that a directive approach to leadership and management focuses on ordering the team, setting standards and as such, taking actions for those who have not met the benchmarked criterion. The directive leadership emphasize the importance of behaving and acting according to the values and standards of the business and such is necessary for the success of live music business. However, Lorinkova et al. (2013) challenge a directive leadership and management approach to any business context because in most cases, the team will be focused on doing everything to avoid the consequences of not abiding by the standards or worse still, being afraid of the punitive measures from the leaders. Besides, the authors agree that a directive leadership and management approach is never appropriate in a business context because the followers will be more concerned about the frustrations of having to abide by the directive approach from the leader.

Alternatively, live music entrepreneurs can borrow a lot from the best and suitable leadership and management approaches like participative or democratic approach of organizing and directing a team. Lam et al. (2015) confirm that a participative leadership approach is the most effective since it concerns asking followers or the team about what it would like to do, considering their options when making decisions as well as being committed to offering support towards their personal endeavours. Moreover, Miao et al. (2013) agrees that a participative leadership approach is good for the team spirit because in most cases, the followers or the employers will feel better and motivated when consulted about important issues. In this regard, live music entrepreneurs can borrow a lot from the participative leadership and management approach.

Chinese culture and effective on the leadership and management of live music

Although the leadership and management styles are proposed for every business context, the effectiveness of a leader will depend or rely on the prevailing culture within the business management context (Peretz and Fried, 2012). According to Hofstede, the effectiveness of leadership depends on the cultural dimension to which the leadership is practised. As such, China is a classic example of how culture influence power influence, especially how people are managed, directed and organised. Accordingly, Matusitz and Musambira (2013) confirmed that China records a high score when it comes to power distance, as an implication that there are frequent hierarchical powers experienced in all families and workplaces. Therefore, the live music entrepreneurs should make such considerations when managing live music in China, because the success of the business management practices depends on the extent to which they are aligned with the prevailing culture. On the other hand, Hosftede’s cultural dimensions would describe the Chinese culture as being collective whereby the interests of a team or a group always prevail at the expense of the individual consideration (Stefenel, 2014). As such, the success of a live music entrepreneurship will depend on how an organizational culture is created, that respects the collectivism aspect of the Chinese culture. Conversely, when managing business in the Chinese cultural context, it is always imperative to consider power distance because JAUPAJ (2012) confirms that there exists high distance when it comes to masculinity; traditionally, the culture is masculine. Therefore, when managing a live music business or company in China, it will be imperative to consider that the people or the culture values goal or success-oriented individuals, going as far as far as sacrificing personal life to achieve work and employment goal.

Nonetheless, Hofstede’s cultural dimensions describe what management approach that business leaders and entrepreneurs should focus on when carrying out their operations within Chinese culture. For instance, Louie (2014) confirms that the Chinese culture is unique in that the individuals dedicate and commit themselves to work such that they would consider everything possible to achieve their career goals, even if it concerns putting more efforts on doing extra work; all that matters is that one transcends personal interests to achieve the organisational goals. As such, a live music entrepreneur should take advantage of this aspect of the Chinese culture to achieve the set business goals. On the other hand, being a masculine and authoritative culture, a manager would be considered as incompetent when he or she loses authority among workers by showing too much softness when administering executive orders (Kang and Huang, 2013). In addition, the China culture can or will influence a live music business from the manner in which issues are resolved or decisions are made. For sure, the culture does perceive that things are seen from the viewpoint of the profiles of the executive team or management as an implication that nothing is ever true, false, right or wrong but all depends on the profile of the individual (Fowler et al., 2015). In addition, an important aspect of cultural dimension to consider in the Chinese business environment is the influence of government regulations and authority. The implication is that businesses in China tend to copy most of the government plans and policies and as such, do not bother creating their own plans (Barbale and Qi, 2013). Therefore, the success of the live music entrepreneurship in China will depend on the extent to which the organisation or the management adheres to the necessary power and authority considerations when leading and directing teams or employees to be precise.

Challenges facing live music industry

Prior to venturing into a business opportunity, an entrepreneur should carry out a market research to outline or identify some of the challenges confronting the industry. The music industry has been studied overtime and one of the emphasis has been to outline some of the challenges confronting live music business. For one, Klimczuk (2014) conducted a qualitative study focused on identifying some of the challenges within the industry and reported that the number one challenge is making profits. Through interviews, the researcher reported that 39% of the responded voted profit as the primary challenge, and this was considered a major obstacle regardless of the show or the number of the live music festivals held. On the same note, , Klimczuk (2014) confirmed that any entrepreneur in the live music business will always struggle to make profits as an implication that profit is a major challenge or issue with in the industry. Furthermore, Martin (2011) reported that for the live music held at night, the promoters and event organisers decried low profit and as such, 68% confirmed the low profit margins as a major obstacle for any new or aspiring venture into the business.

However, Klimczuk (2014) provides some of the important tips on how live music entrepreneur can avoid the problems with low profit margins. One of the recommended strategies or approaches to handling the low profit problems is using unorthodox pricing tiers whereby the quantity-based tiering is used to reduce discounts while at the same time maintaining the exact level of buzz around the live music festival (Elke et al., 2014). The approach can help in boosting sales while at the time maintaining loyalty among the customers. On the other hand, it is imperative to provide enticing premium packages, especially providing benefits like discounted drinks, exclusive areas, VIP tickets and benefits, backstage passes (Magazine, 2015). In fact, simple bonuses can increase or improve the appeal of the live music, for instance, festival T-shirts.

Another important challenge identified to be one of the barriers to live music business or entrepreneurship is the difficulty in retaining sponsors for the music events. Accordingly, Klimczuk (2014) conducted a survey whose results revealed that 36% of the respondents confirmed that it is always a challenge convincing sponsors that the events are sound and necessary. On the other hand, the survey indicated that 60% of the respondents believed that it is always quite a challenge winning sponsorship thus compromising the ability of the business to make profits. However, many options are available for the live music entrepreneurs to convince or attract sponsorship. Yngvar and Anne (2014) recommend that a live music entrepreneur should show proper understanding of the audience and in turn, prove to the sponsorship how he or she understands the audience. For instance, convincing the sponsorship will involve laying out the reasons as to why the brand should invest in the fans, describing the fan base in details including gender, age, income, geography, as well as the psychographic data like lifestyle, habits, and the preferences towards the live music festival (Martin, 2011). In addition, surveys can help in understanding the audience, especially with the modern and digital tools like Survey Monkey that can be used to learn more about the client base. Another important way through which the business can overcome the sponsorship problem or issue is by focusing on offering or suggesting creative options for the sponsorship (Klimczuk, 2014). For instance, with the modern technology, the live music event can be customised into a mobile app.

Finally, a major challenge with the live music business is that in most cases, market saturation and competition can undermine the ability of new business ventures to penetrate the market. Accordingly, Klimczuk (2014) carried out a survey whose findings indicated that around 30% of the respondents believed that the ever-growing number of shows and festivals is a major challenge for new business ventures in the live music industry. Besides, Frith (2015) cites the imminent competition in the music industry and concludes that such is a negative implication for any new business. Nonetheless, Hracs et al. (2013) concurs that market saturation is a major barrier or presenting a strong entry barrier for the new businesses in the live music industry because the industry is already full with many enterprises providing the live show services and as such, a major drawback for new ventures or aspiring entrepreneurs.

However, market saturation as a major industry challenge can be confronted through different approaches and one of the recommended and the most effective method is through creative marketing (Klimczuk, 2014). In this regard, Kattan and Fox (2014) confirm that creative marketing is one of the best ways or methods of standing out among the competitors. In addition, Kruger and Saayman (2015) advise the live music entrepreneurs to differentiate their products and as such, focus on reaching out the new audiences; this calls for proper allocation or expenditure of the marketing capital or money. Besides, Ashley and Tuten, (2015) cite the examples of organisations using social media and how it has stood out as one of the most effective methods or approaches to marketing for competitive advantage. For this case, Jaring et al. (2015) conducted a survey or interview-based research whose findings suggested that most of the live music events are advertised on Twitter. Through marketing on social media, leads are generated for the festival turned into market purchases thus creative marketing is not only used to get the client base but also an important venue for gaining a large sales volume or capacity.

Hudson et al. (2015) explored some of the ways of making the live music popular and reported that only 19% of the top discussed events were using branded hashtags. As such, the best way to perform creative social media marketing is by engaging the audience with as more posts as possible, making it easy for them to relate the events thus overcoming the challenge of market saturation.

Challenges or barriers of live music industry in China

One of the major challenges for any live music entrepreneur operating within the Chinese business environment, as it concerns music, is the much censorship that the government has targeted towards music (Chen, 2014). Therefore, when managing live music events, such are the legal issues or obligations that one has to adhere to as a way of avoiding legal issues or problems with the government. Nonetheless, Lucy and Jason (2008) posit that the Chinese government has a special laws focusing on promoting Chinese music and this is being done to promote the country’s music for specific national gains, especially economic reasons or considerations. On the other hand, the Chinese music arena has been challenged with a shift to re-defining popular music, as Chen (2014) confirm that there has been a major transition or change from Hong Kong’s Canto pop to the Beijing’s Putonghua pop. The difference in these types of music shows how politics is a major player in the music industry because the Canto pop originated from Hong Kong while the Putonghua originated or is associated with Beijing, Guangzhou, and Shanghai (Chen, 2014). In this regard, the focus on redefining music in the country indicates how policy shifts is set to influence live music business, especially defining the lines through which the very policy operates (Hudson et al., 2015). Moreover, a major challenge confronting live music entrepreneurs in China is that the music industry is currently experiencing the effects of digitalisation whereby with technology, music consumption has changed as people enjoy music through ringtones and live-streaming services (Aurobinda and Atul, 2012). On the other hand, sales of music has also changed to the online platform with Chen (2014) reporting that 70% are currently using the online streaming services.

Most important, China’s music industry faces the challenge of lacking a complete industry chain, as Chen (2014) confirms that unlike the film industry, the music chain has not opened that much and this may undermine the live shows concept. In fact, live shows are not well-established in China as Anthony (2007) suggest that the Chinese music industry can only open when many people will begin to value the live shows concept. Aurobinda and Atul (2012) compare the music industry situation to the western countries whereby even small music bands or DJs have specialised managers and companies. However, in China, a common problem is that one company can manage all the other bands and there is the lack of professional managers. In this regard, the music industry faces the challenge of the lack of strong management teams (Chen, 2014). The situation in China is a negative implication for venturing into trade shows, as this will bring troubles or problems when organising and striking deals with the artists for performance.

The future of the live music industry

Savage reported that China has a promising music industry with an impressive listening habit given that 72% of the population is listening to music on a weekly basis (Savage, 2016). Besides, the current trend suggests that the country has a healthy live music scene, with 57% of the fans, from median income population, attending the live concerts. The expenditure on music also shows the current trend of Chinese live music market, with reports indicating that the affluent population spends 914 yuan on music annually, comparison to the 118 yuan spent by the poor Chinese (Savage, 2016). Besides, the current projections indicate that the expenditure is set to rise or increase in the next decade, with around $56 trillion to come from the younger population (Savage, 2016). Therefore, from the expenditure and listening habits, the live music industry has a great future thus a major opportunity for live music entrepreneurs.

In summary, the literature review reveals much about the current trends as well as the future of live music industry in China. For one, policy and regulations still affect the industry with too much government censorship. On the other hand, the internet is another challenge owing to the possibility of livestreaming music, even the live concerts thus a major drawback towards attendance of live music. Conversely, the live music industry is not that much established in China but there are prospects for future growth and development. More so, with proper strategies and traits for live music business, entrepreneurs in this sector have greater future because through creative marketing, they can underscore and overcome the challenges. In addition, proper leadership and management approach that considers the cultural context of the China business environment can help the live music entrepreneurs to become successful. Therefore, apart from the challenges, existing literature recommends proper traits, management and leadership approaches as well as sound business strategies for overcoming challenges from competition to the policy regulations confronting the Chinese live music industry.