China streams its way to stardom in recording industry
The global recording market for music grew by 5.9 percent in 2016, the highest since 1997, according to the latest report of the International Federation of the Phonographic Industry.
By the end of last year, there were 112 million users for paid musicstreaming sites driving year-on-year streaming revenue growth to 60.4 percent.
Digital income accounted for half of the global music recording industry’s annual revenue for the first time in 2016.
“The industry’s growth follows years of investment and innovation percent percent by music companies in an effort to drive a robust and dynamic digital music market,” Frances Moore, chief executive, IFPI, says.
Streaming is helping drive growth in developing music markets, especially in China, he adds.
Recorded music revenue grew 20.3 percent in the country last year, driven by a 30.6 percent rise in streaming. And, thanks to a confluence of deals, technology, government policy and cultural shifts, China is being seen as the next big global opportunity, with the potential to rank alongside the biggest music markets in the world.
In a chapter, titled Focus on China: China’s Phenomenal Potential Unlocked by Streaming, the report says, “Historically hampered by rampant piracy, it was the sleeping giant that many in the industry believed would never be woken up … Major and independent labels from all over the world, fired up by a new sense of possibility and positivity, are playing their part in building a new industry, founded on streaming and subscription.”
One of the leading players in the streaming market in China is Tencent Music Entertainment Group.
The number of monthly active Tencent users accessing music in China is more than 600 million, Andy Ng, the company’s vice-president, says.
“We see huge potential for growth as long as the market situation keeps improving and the piracy issue is contained,” he says.
Both Warner Music and Sony Music have in recent years signed and extended licensing deals with Tencent, which then sub-licenses the catalogues to other streaming services in China.
Ng says the Chinese government’s increasing resolve to tackle piracy, plus a change in people’s attitude toward paid, high-value content, are helping to make the industry more professional here.
“We are all educating people to accept that content has a value and we are making progress. Young peo- ple in particular are more willing to pay for a music service, they are happy to spend a few dollars supporting the artists they truly admire,” Ng says.
Andy Ma, Warner Music’s CCO for Greater China, says the combination of low-cost and high quality within the subscription model is making it easier for consumers to decide to pay for music.
He says companies are increasingly trying to improve user experience, with value-added services such as artist showcases, which music fans seem to appreciate.
“If a small fraction of this population (in China) pays for streaming services, it will be the biggest music market in the world,” Ma adds.
rise in revenue in China from recorded music last year rise in streaming music