China’s recorded music market grew by more than 33% in 2020 according to the IFPI. While we won’t have official stats for 2021 until its Global Music Report comes out this spring, Music Ally has been talking to our sources in China to get a sense of the market’s development last year, for our latest country profile.
2020 had been a key tipping point: subscription audio streaming revenues overtook ad-supported audio streaming revenues in China. This trend has been driven by the policies of the biggest streaming services and rightsholders.
“There is a repertoire on both NetEase and Tencent that requires a subscription – international and domestic artists. And I am not talking about new releases but content that was previously available without a subscription,” said Tinko Georgiev, VP of international business for Kanjian Music. “And it is paying off because, today, to listen to music in China is just easier to pay for a subscription than to even consider other means.”
Labels are keen for the growth to continue, with Dennis Kooker, president, global digital business and US sales for Sony Music, saying that there are still “less than 100 million paid accounts in a market of roughly 1.4bn people: So, whilst there is a very significant number of people paying for a premium music streaming service, there is still huge opportunity for growth, especially when you compare China to more mature markets, where you see upwards of 70% of households with a music subscription.”
How big can this grow? Kanjian Music’s senior manager of international creative Yutong Situ predicted that there will eventually be more than 300 million paid streaming subscribers in China, matching the penetration rate of the US. Meanwhile, the way rightsholders are paid for this growth is also evolving for the better, driven by the Chinese authorities’ moves to bar exclusive licensing deals between labels and DSPs.
“I’d say we’re finally beginning to see the first solid signs of a possible future where the Chinese recorded music market delivers on a revenue share basis, rather than just on advances for exclusivity,” said Alex Taggart, head of international at Outdustry. Read the full country profile here [subscribers only] for more analysis and views from these and other sources.