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CMU@TGE Top Questions: Which streaming services dominate in China?

By Chris Cooke | Published on Wednesday 18 April 2018

With The Great Escape now just a month away, over the next fortnight we’ll be considering ten questions that will be answered during the three CMU Insights conferences that are set to take place there this year: The Education Conference (16 May), The AI Conference (17 May) and The China Conference (18 May). Today: Which streaming services dominate in China?

The shift to streaming has made China a market with huge potential for the global record industry. Which is why Western music companies have all been busy doing deals to access that market in recent years, and one of the reasons why we have decided to stage a full-day China Conference at The Great Escape next month.

To put all this into context, the International Federation Of The Phonographic Industry noted in its ‘Global Music Report’ last year that: “With over 1.36 billion people, China is, in terms of population, the biggest country in the world. In terms of recorded music revenue, however, it has never broken into the top ten markets. Historically hampered by rampant piracy, it was the sleeping giant that many in the industry believed would never be woken up”.

However, the IFPI added, “thanks to a confluence of deals, technology, new government policy and cultural shifts, it is being talked of as the next great global opportunity, with the potential to rank alongside the biggest music markets in the world. Recorded music revenue grew 20.3% in China [in 2016], driven by an 30.6% rise in streaming”.

So, while the streaming boom is pushing the global record industry back into growth, it is also helping transform what were once impossible markets for the recorded music business. Which is very exciting. And also very interesting. Mainly because the streaming boom in China is dominated by local services, rather than the global players like Spotify, Apple, Amazon and YouTube.

In China it is the music platforms from local web giants like Tencent, NetEase and Alibaba that are leading the way. There are many similarities between these services and the global streaming platforms, both in terms of consumer experience and their deals with the music industry. Although there are also some key differences, which is what we’ll be exploring during the streaming section of our China Conference next month.

There’s also the interesting quirk that the majors and big distributors entered into single deals with one of the Chinese web giants, which not only made their catalogues available to that company’s streaming platform, but also made said company the Western firm’s distributor in the market. Which created the slightly odd situation where streaming services had to get licensing deals from their competitors in order to access big chunks of catalogue, especially from international record companies.

Domestic repertoire tends to account for the majority of the music streamed in China, but – with the deals now in place, quirks or no quirks – there are definite opportunities for Western artists too, and some acts are already capitalising on that. Luck does still often play a role, but if – for whatever reason – an artist suddenly starts gaining traction on the Chinese platforms, there are things they and their labels can do to capitalise on that momentum. And that will also be a topic for conversation at The China Conference.

Which makes these sessions vital for artists, managers, labels and distributors. Because – to requote the IFPI – with China now having the “potential to rank alongside the biggest music markets”, it’s increasingly important to understand how streaming works in the country.

The China Conference takes place on Friday 18 May – more info here. See more questions we’ll answer at The Great Escape here.