Reborn since 1993

Chapter 1325 This Glory Will Not Be Enjoyed Alone
Any emerging industry will always face skepticism and doubt; this is the norm in any industry.

Despite the internet's seemingly booming global presence, its influence is primarily concentrated in the investment and stock markets, with its impact on other sectors remaining far from significant.

Even in many people's minds, the internet is still viewed as a scam industry, a business that deceives people. And yes, it seems that many internet companies are indeed like that for now, relying on deceiving ordinary people...

But as Roger Ames looked at Tang Jun, who was speaking eloquently and confidently, his impression of the internet industry did change for a moment.

Hearing Tang Jun talk about reshaping the global music market and saving the record industry, Roger Ames felt a glimmer of hope for Tang Jun's proposal.

"Does Himalaya Music really believe that internet music can save the record industry?" Roger Ames couldn't help but ask.

Regardless of whether he could actually do it, Tang Jun was full of confidence at this moment, displaying the demeanor of America's best professional manager.

"Since the rise of the Internet, more and more industries will change."

The music and film industries are certainly not the first, nor will they be the last; they are simply among the most significantly affected sectors.

"President Li believes that in the future, the way people in America and countless other parts of the world eat, wear, live, and travel will undergo new changes with the development of the Internet!"

Tang Jun quoted Li Dashanren's words, telling Roger Ames that the record industry was by no means the first unlucky one, and that countless industries would follow suit.

Roger Ames remained silent for a moment. He neither dismissed nor agreed with Li Dongling's prediction.

However, Li's status as a philanthropist is undeniable, and the Zhixing Foundation, a venture capital firm that is quite well-known in Silicon Valley, is under his control.

Rumors suggest that the Zhi Xing Foundation's investments in Silicon Valley internet companies have exceeded $10 billion, making it one of the most astute and highest-returning foundations in the Silicon Valley venture capital industry, having successfully bet on a host of well-known internet companies such as Yahoo, Feiyan Technology, Souxin, and ASK.

Even those who are most dismissive of the internet dare not underestimate an internet company that can bet billions of dollars.

"The traditional record model has reached its end!"

Roger Ames did not refute Tang Jun's words at all, which clearly showed that traditional record companies such as Warner Music were terrified by the pirate record groups led by Napster.

At this point, Roger Ames and other traditional record company executives genuinely believed that Napster had a real chance to drive out the good and completely wipe out the record companies.

"Embracing the internet and transforming into digital music is the future of the record industry."

"This year, Feiyan MP3's global user base will exceed eight million, or even nine million, all of whom are potential users of legal music on the internet."

Globally, the MP3 industry is booming. Within the next three years, the number of MP3 users could exceed 30 million, or even 50 million. These are all potential users of legitimate online music, and there's a chance they could be converted into paying subscribers!

Tang Jun revealed the grand plan he had previously discussed with Li Dongling, offering it to Roger Ames. The collaboration with the record company wasn't about making them money immediately, but about giving them hope.

"Himalaya Music will adopt a model of paying for new songs plus membership. This will protect newly released songs, while the membership model will also bring more songs to users!"

"Membership model?"

When Tang Jun mentioned the new feature that Himalaya Music would be launching, which would allow users to listen to all the music on the entire music website except for new releases for just $10.99 a month, Roger Ames immediately frowned.

"Tang, this is so unfair to the record company!"

"Yeah, if everyone becomes a member, then all those songs, singers, and producers will only get $10.99 a month?"

“Singers, producers, and even our Warner Music Group board of directors would not agree to such an agreement!”

The Warner Music executives following Roger Ames also chimed in, all expressing their opposition.

Himalaya Music's proposal is simply too sensational. If Warner Music were to partner with Himalaya, users would only need to pay ten dollars a month to listen to Warner Music's entire copyright library, which is unacceptable to Warner Music.

Even a Warner Music executive sarcastically remarked to Tang Jun, "If this model is followed, how much better will Himalaya be than Napster?"

Is it different? Is it using Warner Music's profits to appease users?
Hearing the chorus of objections, Tang Jun shook his head. He felt that Roger Ames and his group were short-sighted, no wonder they were utterly defeated by Napster, a pirate music website.

"In the internet age, we must have an internet mindset and not view the internet industry with outdated perspectives!"

Tang Jun once again quoted Li Dashan, the philanthropist, saying that it was expected that record company executives like Roger Ames would have objections to the music membership model; otherwise, it would be suspicious. "In the past, how many global users did the traditional record industry have? Twenty million, thirty million, or fifty million?"

Tang Jun asked, not expecting an answer, but instead said directly, "But in the Internet age, the global Internet music users that Himalaya Music Store faces are in the hundreds of millions. Wherever there is Internet, there are potential users for Himalaya Music!"

“In the music membership model, the membership fee for a single user is not high, but if the scale of music memberships can reach 20 million, 50 million, or even more than 100 million, how much would that membership fee be per month and per year?”

Tang Jun's words caused Roger Ames and Warner Music executives to gasp in shock.

If what Tang Jun said is true, then Himalaya Music Store's annual music membership revenue could be as high as several billion US dollars.

It can't compare to the peak of the traditional record industry, which generates $280 billion in revenue annually, but it's still quite astonishing. At least it showed Roger Ames that there are profitable opportunities in internet music.

"But how can Himalaya Music be sure that so many users will be willing to subscribe to music memberships?" Roger Ames asked the crucial question.

"It's impossible to guarantee."

Tang Jun frankly admitted that Himalaya Music couldn't force users to buy Himalaya memberships at gunpoint.

"Then Himalaya Music, together with Warner Music and many other record companies and singers, needs to wage war against those who disrupt the order of the record industry."

Only by defeating the disruptors will Himalaya Music's paid subscriptions and memberships be accepted by users!

Tang Jun put it bluntly: only by eliminating pirated music websites like Napster will Himalaya Music have a chance.

"In the future, Himalaya Music will expand its music platform to mobile phones, in-car music platforms, and other platforms, allowing more users to accept Himalaya Music."

Himalaya Music will also develop a music store, offering users concert tickets, merchandise, and artist merchandise. The revenue from these sales will be shared with record labels.

Himalaya Music also plans to collaborate with credit card companies, telecommunications operators, and other partners to promote Himalaya Music memberships.

In the future, Himalaya Music memberships will become one of the "necessities" in people's daily lives, just like water, electricity, natural gas, and telephone monthly fees.

The music membership model will allow record companies to fully utilize their copyright libraries, ensuring that no songs are forgotten.

The record industry may experience a downturn in the short term, but in the long run, as the global internet user base expands further and Himalaya Music's user base continues to grow, the revenue generated by internet music might even surpass that of traditional record sales!

Both were seasoned veterans; Roger Ames could easily tell that Tang Jun was just making empty promises.

But the key question is, besides Himalaya Music, what other options are there for Warner Music right now?
Choosing Himalaya Music might make you money in the future, but not choosing it could mean being wiped out by Napster!

"Seventy percent!"

Roger Ames thought for a moment, then looked up, gritted his teeth, and said, "Warner Music wants 70% of the revenue from paid music, memberships, and the music store!"

"make a deal!"

"However, Himalaya Music requires Warner Music to sign a ten-year contract with Himalaya Music, and to renegotiate the revenue distribution after another five years."

Tang Jun said, "It's fine to let the record companies take a little more now, but we can't let them take 70% forever. Otherwise, wouldn't Himalaya Music be working for them for free?"
Of course, while record companies take the lion's share of revenue from paid music, membership fees, concert tickets sold in the music store, and merchandise, Himalaya Music has never said it would share its most important revenue—advertising revenue—with record companies.

This is tantamount to bullying laymen, and there will definitely be disputes in the future, but that's a matter for the future. At least for the next few years, the advertising revenue of Himalaya Music will belong exclusively to Feiyan Technology.

After the agreement was drafted, Roger Ames returned to Time Warner headquarters to report the results of the negotiations. Only after Time Warner headquarters approved the agreement could it take effect.

Without keeping Himalaya Music waiting long, Warner Music, which was already on the verge of collapse, officially announced a strategic partnership with Himalaya Music the very next day, becoming the first of the five major record labels to open its copyright library to Himalaya Music.

The news sent shockwaves through the global record market. Even those who are not particularly sensitive to such news could sense that the record industry seemed to be about to change!

"For the global music industry, perhaps an era has come to an end, and a new era is about to begin!"

Rolling Stone magazine commented on the deal in its headline.

(End of this chapter)