In China out of the 600m Chinese who listen to music online, only 20m have a paid subscription that typically costs between 8 and 12 yuan (between $1.2 and $1.8) a month.
Rest of the listeners don’t pay anything for streaming music online, however, do so on legit, ad supported services meaning the Chinese equivalents of the free option on Spotify.
Chinese consumers are leaning towards legal listening due to a combination of reasons like the increased use of smartphones that make it easy to subscribe to streaming services, rising usage of apps like Alipay and WeChat Pay that are popular amongst the younger Chinese population for making small purchases digitally. Also, China’s big internet platforms have started efforts to put an end to piracy.
However, there have been some challenges for making the Chinese subscribe to paid music streaming services. Tencent which is the dominant player in China for streaming has its market share in excess of 70%. Tencent’s two leading streaming brands, QQ Music and KuGou claim to have hundreds of millions of users. Tencent is has acquired exclusive right to stream music from Warner Music Group, Sony Music and Universal Music Group in China which means Tencent calls the shots on the songs that rivals are allowed to play.
There are many services built on pirated music before they started licensing it. Unlicensed “indie” music is pervasive and it impacts independent labels and artists. Read More