He didn't think the big companies had cracked the music business either, so he started crowdfunding for music | 100 People With Ideas

"The big platforms will always go after the top acts first, so we'll take the bottom."

Ma Ke, a lifelong music fan, has lately been busy publishing a set of books.

The series, Ultimate Music Guide, comes from Uncut, the veteran British rock magazine. Each issue takes a single act — Queen, Radiohead, U2 — and lays out the life, the story behind each album, and excerpts from the musicians' own interviews. In Europe and the United States, fans love it. On the Steve Hoffman music forum, a Dutch user named Yovra wrote: "In these years when I've grown less and less interested in music magazines, one exciting thing has happened — Uncut put out this Ultimate Music Guide series."

Ma Ke thinks much the same. To him it is the world's "most complete, most professional, most in-depth" writing about musicians, and for Chinese fans it reads more like a textbook. In 2011 he wrote to the publisher, Paul Cheal, asking to bring out a Chinese edition. He also asked a friend, Li Hongjie, another organizer with a modest name in the music scene, to go to Britain and make the case to Cheal in person. Cheal turned him down.

Ma Ke had spent a stretch as deputy director of entertainment marketing at Gold Typhoon, and his collection of 15,000 vinyl records and CDs had earned him some renown. But by the account of his friend and later business partner Guo Xiaohan, he was not yet part of the music industry. He had no contacts in publishing either. That he failed to bring the series into China five years ago is no surprise.

He is relieved about it now: "Because if I'd done it back then, it really could have been a mess."

In July 2015 Ma Ke picked the plan back up and wrote to Paul Cheal again. This time he had something more carefully worked out: once he had the rights, he would run a crowdfunding campaign on a platform called MusiKid, looking for people who knew both music and English to translate the books and to design the merchandise around them.

MusiKid is the business Ma Ke has built over the past few years.

Five years ago, after selling the advertising company he had founded, he finally started doing something almost purely out of personal interest. Today MusiKid is a crowdfunding site with a modest following, devoted to music. Independent musicians run campaigns there to pay for albums or music videos; some promoters list their shows on MusiKid's pages and sell tickets. By now, more than 300 projects launch on MusiKid every year. The company raised an angel round in May 2014 and a Series A last August; the publicly disclosed figure for the latter was 20 million yuan.

"None of the rounds went smoothly either — we went through a lot of torment to get the money," Ma Ke said.

But by founding MusiKid, Ma Ke became part of the music industry. Now he was ready to bring Ultimate Music Guide back to China.

In China, music has never been an easy business. That was especially true in 2011, the year Ma Ke sold his advertising company and started over.

That year, piracy and MP3s finally finished off the record industry. Even Jay Chou's album that year, Exclamation Mark《惊叹号》, sold only 400,000 copies, far below the 1 million of the previous year's The Era《超时代》. The music-festival business, so crowded now, was only starting; the Strawberry Music Festival was nowhere near the scale it has today, when it draws hundreds of thousands of people a year.

"Back then, the moment you told an investor you were doing music, they'd lose interest in talking to you," Ma Ke recalled.

Ma Ke is a fan first. Born in 1970, he grew into music on "dakou" discs — Western CDs dumped cheap on the Chinese market as scrap, each with a notch cut into the edge. He has since collected more than 15,000 records, and his friends call him China's foremost record collector. "Music is what I love most, and I thought the domestic music market had already hit bottom — there was nowhere to go but up." So when he started over, he chose music.

In February 2012 his first product, Oxygen Music Radio, went live: a streaming station much like Douban FM but more niche, built mostly around the jazz he loved. In those days Ma Ke posted links from Oxygen Music Radio on Douban and Weibo nearly every day.

He soon gave up on it. In the year Oxygen Music Radio closed, two other things happened in the music business: Alibaba bought Xiami Music, and Kugou Music bought Kuwo Music. Streaming consolidated fast, because licensing and bandwidth costs kept climbing while users had still not learned to pay. Streaming services could not survive.

The reason they could not survive, Ma Ke believed, was that "this model doesn't help the music industry — it puts itself in opposition to musicians. Playing music for free pleases users, but it produces no shared value in return. It damages the music industry."

By then Ma Ke already had a model in mind. In August 2011 the independent musician Li Tieqiao came to him: he wanted to bring the German jazz musician Peter Brötzmann to China to play, but was short of money. As a jazz fan, Ma Ke knew exactly what that name meant, and he paid for the show out of his own pocket. With his money, the concert went ahead as planned at Yugong Yishan in Beijing on September 9.

Shows like that could not run on patronage forever, Ma Ke knew, and around the same time crowdfunding was catching on in China. In a neat coincidence, Perry Chen, who founded Kickstarter, the original crowdfunding site, had arrived at the idea through a jazz show too.

In 2002 Chen had to cancel a concert he was planning at the New Orleans Jazz Festival because he could not raise the money. The failure stayed with him, and he began thinking about a website for raising funds. As he later put it: "We often get good ideas out of nowhere and want to see them have a chance to happen, but unless you have a rich dad, you don't really get the chance to do it." Seven years later, Kickstarter launched.

MusiKid arrived looking like a copy of Kickstarter, except that Ma Ke's own taste narrowed it to one field: music. It launched in July 2012.

The early days were hard. A report from June 2013 said the site drew only a few thousand page views a day. By Ma Ke's own account, only about half of all projects reached their funding goal — a low success rate that made musicians hard to attract.

The most extreme case came from a collaboration with Tan Weiwei. In September 2013 her new album The Tortoise's Achilles《乌龟的阿基里斯》 went up on MusiKid. The project had been in the works a long time; in the end a single person put in a symbolic 1 yuan. Ma Ke later explained that many MusiKid projects use a pre-sale model — even if a project misses its target, the money still comes through and backers still get something in return — so it cannot really be called a failure, and most musicians pick this apparently safer route.

The explanation only goes so far, and the bigger problem was a shortage of projects. In mid-2013, Ma Ke said: "My goal is twenty to thirty projects a month, but right now we only get about ten."

Guo Xiaohan's arrival solved that. The two met at an event held by Guangxi Normal University Press to promote the Chinese edition of the folk musician Patti Smith's memoir Just Kids. Ma Ke and MusiKid had put up a pre-sale project for the book and organized a show around it. Guo Xiaohan hosted the event: "The organizer told me Ma Ke was a serious listener with tens of thousands of records at home. I love rock too, and even though I don't collect records, I could tell this was someone who really loved and cared about music — so I figured, let's be friends."

Guo Xiaohan had been a lead culture writer at Beijing Youth Weekly, and was then working in VICE's marketing department. In the music scene she also went by the nickname "the yeast of folk music," and had managed musicians including Zhou Yunpeng, the duo Zhang Weiwei and Guo Long, and the band Top Floor Circus.

As early as 2009, Guo Xiaohan helped stage Li Zhi's solo concert Dandao Fuhui. Li Zhi was not as popular then as he is now, and had no full professional team around him covering everything from players to stage design to finance and legal. It was Guo Xiaohan who found the venue, sourced the gear and handled promotion.

The musicians were changing shape; Guo Xiaohan's own career was at a low point. Her VICE job was not going well. At the same time, the folk musicians she used to manage were being signed away one after another by Modern Sky. Then one day Ma Ke asked her to join MusiKid.

"He must have already had me in mind as someone who could do this work with him," she said. "Ma Ke also wanted to make the site more professional. He wasn't really part of the scene — he didn't know many musicians. I was on both the media side and the folk-management side, so I had more to draw on."

Those contacts paid off at once. Guo Xiaohan joined in December 2013. A month later she had brought Li Zhi onto the platform with two projects: a pre-sale of guitar tablature, and a crowdfunding campaign for the album Gou San Da Si《勾三搭四》.

That campaign set the whole music industry talking. People praised the independent musician's nerve — Li Zhi announced that backers would get no physical reward at all, only a download link. And everyone kept naming the same platform: MusiKid.

Li Zhi seemed satisfied with the service too. He never commented on MusiKid directly, but he worked with the company again on a 2015 tour. At the time he told QDaily: "The internet is just a means, just a tool. Choosing a car or a train — we only look at the result and the efficiency. Because I can't tolerate unreliable people or organizations."

Guo Xiaohan thinks the project became a standard case study in the industry, the one that showed musicians what a crowdfunding platform was worth. Over the whole of 2014, MusiKid hosted 400 projects.

But it also had more headaches to deal with.

Plenty of independent musicians had no idea how to use the internet to sell themselves. "Expecting musicians to dream up clever rewards on their own — the odds aren't good," Guo Xiaohan said.

So MusiKid had to strip out every obstacle. Launching a campaign through the site works like a very patient beginner's tutorial. Musicians fill in the fields in order: target amount, project name, genre, timeline, bank or Alipay account. At the two points most likely to trip people up — the project description and the rewards — MusiKid spells everything out. In the description box, for instance, it leaves a long prompt written like a school essay assignment — Who am I… What am I going to do… How am I going to do it — with a customer-service phone number beside it.

Live shows can be turned into standard products the same way: tour dates, cities, ticket revenue, merchandise and record sales all become separate options on a menu.

That gave Ma Ke a new position for the company. He no longer calls MusiKid a "crowdfunding platform" but an "online agency platform." The business can extend into ticketing, promoting shows, planning tours and marketing, while also handling "integrated marketing" and merchandise for musicians.

The word "agency" suggests competing with record companies and labels for artists. That is exactly what MusiKid is worst at — one reason Guo Xiaohan joined in the first place was that the folk musicians she used to manage had all been signed by Modern Sky. And on services, MusiKid is up against Tencent, Alibaba, LeEco and NetEase, all of which have thrown themselves into music with great noise.

Ma Ke is clear about where he stands. "The big platforms will always go after the top acts first, so we'll take the bottom," he explained. Next to Modern Sky's Song Dongye, Ma Di and Yao Shisan, MusiKid's artists are neither as famous nor as influential.

Still, this company built to serve the musicians at the bottom has no intention of conceding. "Everyone is still feeling around for what service actually serves musicians best," Ma Ke added — as though nobody had really worked it out yet.

Nobody has. Since the record industry collapsed, no one has found a business model with a future. Streaming has never gone well: Xiami's place inside Alibaba Music grows more marginal, and Ocean Music, which holds the second and third largest market shares through Kugou and Kuwo, could not escape being absorbed by Tencent either. None of these companies says how much it spends on licensing, but Xiami Music founder Wang Hao told QDaily in an earlier interview that licensing prices had risen several hundredfold in a few years. Abroad, Spotify, the largest streaming service, spent 80 percent of its 2015 revenue on licensing.

Tencent's answer for music has been the digital album. From December 2014 to July this year, the company says it sold 20 million of them, taking in more than 100 million yuan and turning a profit — numbers still nowhere near the record industry's golden age.

LeEco has gone into livestreaming concerts and may move into running them next, but in LeEco's hands a Li Yuchun concert has also become a way to bundle LeSports memberships and Yidao Yongche ride cards.

Alibaba Music launched an app called Ali Planet with great ambition, cramming every music-related business inside. Since it appeared, the most common verdict on it has been a single word: chaotic. Nobody can tell what Alibaba Music is trying to do.

Like the big platforms, MusiKid can't be called a success either. Ma Ke won't say how much the site takes in each year, but he says it has more than 600,000 users, each spending about 150 yuan a year there. As a crowdfunding platform, MusiKid earns most of its money from a service fee on every transaction. At the industry-standard 10 percent, crowdfunding would bring in roughly 9 million yuan, with more from concert marketing, merchandise and other lines. For a team of more than 50 people, that is not much money.

Ma Ke has recently started two new things: Le Space and Ultimate Music Guide.

Le Space is a physical room, used mainly as a livehouse for shows. Livehouses are not an easy business — Maque Washe and MAO Livehouse near Beijing's Gulou have both closed and moved elsewhere — but MusiKid has its own view of running one. At a salon last September, while livehouse operators complained about soaring costs, MusiKid argued that they should look at themselves: they don't know how to run a livehouse as a business, they don't build chains and they don't develop merchandise.

Ma Ke has never run a livehouse as a business either. As he imagines it, the room should carry more than concerts at night: album launches and cultural salons too, and ideally retail as well, selling records and merchandise.

For Ma Ke, a serious fan who came up in advertising, and Guo Xiaohan, who came up in media, the greater satisfaction may be that Ultimate Music Guide has put them back in touch with content. "That experience is in your bones — just talking about making content gets us excited," Guo Xiaohan said.

After the print edition, Ma Ke also plans to turn the books into an app. Guo Xiaohan sees that as another way to keep users coming back.

But Ultimate Music Guide is not content MusiKid produced. This collectible fan's series looks more like music merchandise — and merchandise matters more and more to the business, even though it carries more risk. In an earlier musical-portrait project with the folk singer Xiao He, MusiKid made two products, postcards and an art book, and drew 62 buyers, less than a third of what it expected, while more than 500 people backed the record itself.

The new business has brought Ma Ke worse trouble than that. The Ultimate Music Guide campaign opened on MusiKid on April 15 with a target of 200,000 yuan. In early July the company cut the target to 100,000 yuan and declared the campaign over. The first standalone volume, on Led Zeppelin, had been due on May 31 and was pushed back twice.

On July 30, MusiKid finally texted everyone who had backed the campaign: the Led Zeppelin volume had shipped.

Two months late, and fans had plainly stopped waiting. On the campaign page, backers had already left comments: "It's July 1 and I still haven't got the Led Zeppelin book. What is going on?"

Like Ma Ke five years ago, they will probably find their patience again for the next volume, on Radiohead or some other big name. But that patience may not be saved for a small company that set out to serve the musicians at the bottom.