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.
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.”
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.