Mar­ket marches to new beat

A few years ago there was no on­line mu­sic in­dus­try and piracy was ram­pant. But all that has changed. QQMu­sic— a mu­sic ser­vice run by Ten­cent— now has 400 mil­lion ac­tive users a month. Chen Nan re­ports.

China Daily (USA) - - LIFE - Con­tact the writer at chen­nan@chi­nadaily.com.cn

The Chi­nese mu­sic mar­ket, once seen as chaotic, is now viewed as hav­ing enor­mous un­tapped po­ten­tial, thanks to the coun­try’s on­line user base of 650 mil­lion peo­ple and a grow­ing num­ber of li­censed dig­i­tal ser­vices.

Dur­ing the re­cent Mu­sic Mat­ters 2016 event, which was held from Sept 12 to 15 in Sin­ga­pore, the Chi­nese mu­sic mar­ket was in fo­cus at the QQ Mu­sic China Fo­rum: The World Turns to China.

Now in its 11th year, Mu­sic Mat­ters, with live per­for­mances and fo­rums, is a global plat­form for the mu­sic in­dus­try in the Asia-Pa­cific and a gate­way for budding artists.

Speak­ing at the event, Andy Ng, gen­eral man­ager of QQ Mu­sic — run by China’s in­ter­net giant, Ten­cent — said that there were about 700 mil­lion mu­sic lovers in China now, and forQQMu­sic, the num­ber of monthly ac­tive users was about 400 mil­lion, which com­prises nearly 90 per­cent of the coun­try’s on­line mu­sic mar­ket.

How­ever, while he was op­ti­mistic about the fu­ture, he could not help re­call­ing the pes­simism of a decade ago.

Re­call­ing those years, Ng, who has been with Ten­cent for five years, said: “There wasn’t much hope then when we were see­ing ev­ery­thing pi­rated. There was no busi­ness model at that time.

“So, it is hard to be­lieve that we have over 10 mil­lion pay­ing users now. And, I guess, there is still room for growth.”

The mar­ket took a turn for the bet­ter in 2011, when QQ Mu­sic worked out a part­ner­ship with a lot of mu­sic la­bels, in­clud­ing ma­jor com­pa­nies — Warner Mu­sic, Sony Mu­sic and Uni­ver­sal Mu­sic — as well as in­de­pen­dent la­bels.

The move al­lowed QQ Mu­sic to be­come these la­bels’ sole dis­trib­u­tor in the Chi­nese mar­ket and helped them fight piracy.

Also, by build­ing a sys­tem which en­abled the in­ter­net com­pany to mon­i­tor piracy sites, Ten­cent, ac­cord­ing to Ng, man­aged to per­suade the govern­ment to change the rules.

Mean­while, the paid ser­vices be­gan to take off only after China’s Na­tional Copy­right Ad­min­is­tra­tion is­sued a no­tice in 2015 that on­line mu­sic-de­liv­ery plat­forms had to re­move all unau­tho­rized songs.

“If you think about the past 15 or 20 years, few were will­ing to ac­cept that mu­sic and con­tent had value,” Ng says. “But we are still work­ing with mu­sic la­bels, help­ing them fight piracy and cre­ate busi­ness mod­els for the la­bels and us tomake money.”

Speak­ing of his ex­pe­ri­ence in Asia, Rob Schwartz, the Asia bureau chief of Bill­board mag­a­zine and host of the QQ Mu­sic China Fo­rum, said: “I have been to China many times dur­ing the past 20 years, and I have no­ticed that Chi­nese con­sumers are ea­ger for mu­sic.

“In two years, much of the world mu­sic in­dus­try will be fo­cused on China.

“I’m very ex­cited about this. And their will­ing­ness to pay is im­por­tant.

“I think it’s a good strat­egy to keep the sub­scrip­tion fee as low as pos­si­ble.”

QQ Mu­sic has three pop­u­lar pay­ment tiers — rang­ing from 8 ($1.2) to 15 yuan per month.

The Chi­nese mar­ket is also an im­por­tant part of Bill­board’s glob­al­ex­pan­sion plans.

Ac­cord­ing to Jonathan Serbin, head of Asia for Bill­board and head of Bill­board China, Bill­board has just an­nounced a part­ner­ship with Chi­nese me­dia com­pany Vi­sion Mu­sic to bring a range of Bill­board prod­ucts and ser­vices to China, in­clud­ing web­sites in Chi­nese and mu­sic charts.

“I be­lieve the Chi­nese mu­sic mar­ket has evolved quite a bit over the past fewyears. And there has been a sig­nif­i­cant ex­pan­sion in the num­ber of le­git­i­mate plat­forms for fans to dis­cover and lis­ten to great mu­sic from China and around the world,” Serbin says.

“Also, the mu­sic mar­ket in China is be­com­ing in­creas­ingly di­verse. I think there is room for all gen­res — from jazz and rock to pop and be­yond.”

Sep­a­rately, Ng says that with the Chi­nese mu­sic mar­ket head­ing in a healthy di­rec­tion there was room for in­ter­na­tional artists to de­velop, es­pe­cially newartists.

“At QQ Mu­sic, we have about 15 mil­lion autho­rized and le­git­i­mate tracks. But the Chi­nese cat­a­logue rep­re­sents only 4 per­cent. Eighty per­cent of our users lis­ten only to the Chi­nese cat­a­logue, which means there is a lot of room for for­eign cat­a­logues, like English and Korean.”

Ng adds that when the South Korean boy group Big Bang had a new re­lease, the com­pany sold over 5 mil­lion copies of the dig­i­tal al­bum.

“And, with a lot of pop­u­lar Chi­nese singers who have newre­leases, their sales of dig­i­tal al­bums can eas­ily cross 1 mil­lion copies,” he says, giv­ing an ex­am­ple of Sin­ga­porean singer JJ Lin, who re­leased a sin­gle on QQMu­sic.

Within a week, more than 600,000 peo­ple had paid 2 yuan each to down­load the song, he says.

As for the fu­ture of the in­dus­try in China, Si­mon Robin­son, the pres­i­dent of Warner Mu­sic Asia, said: “When it comes to mu­sic, it (China) was out­side the top 20 a few years ago, but it is just out of the top 10 now. I think it has the po­ten­tial to be in the top 3.”

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Above: Andy Ng (sec­ond from left), gen­eral man­ager of QQ Mu­sic, speaks at the re­cent fo­rum. Top: (From left to right) Chi­nese rocker Cui Jian, Bri­tish singer Rita Ora and Chi­nese singer Dou Jing­tong in per­for­mances or­ga­nized by QQ Mu­sic.

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