text | Music predecessor, author | 233
" Jay Chou 's songs can only be listened to by members!"
On March 26, the Weibo "Jay Chou Chinese website JayCn" released information, Jay Chou reached an agreement with QQ Music, some of Jay Chou's songs began to be listened to by VIP, and other songs were gradually charged. Up to now, all Jay Chou’s songs have been listened to by members.
's move has also been criticized by many netizens. For example, if you search for the keyword "Jay Chou" on Weibo, the topic "Jay Chou's songs cannot be listened to" will appear by default. The speeches under this topic are mostly complaining that the APP does not have the copyright of Jay Chou's songs or that you need to pay to listen to them. In Jay Chou’s Weibo comments on Chinese website, the vast majority of Jay Chou’s fans expressed support for the need to pay for listening.
Coincidentally, in late March, Xiami Music quietly launched albums by Jay Chou, Jolin Tsai and other singers through third-party links. The third parties in include Migu Music, Kugou Music, etc., which can be listened to for free, but clicking to download the prompt to download the third-party APP will pop up. However, Xiami Music has broken all third parties.
, which is believed to account for 15% of the daily active users, has begun to listen for a fee, which may be considered an important node in the outbreak of Chinese music payment.
Real Reality of Domestic Music Payment
According to the "China Mobile Internet Online Music Report" released by Questmoboile, the active penetration rate of online music in 2017 was 61.5%. In 2018, online music grew rapidly, with a penetration rate of 70.6% - 7 out of every 10 netizens use online music, second only to online videos.
At the same time, iResearch Consulting released the "2019 China Digital Music Industry Research Report" pointed out that the scale of China's digital music market in 2018 was 7.63 billion yuan, which overall maintained a high growth trend. It is expected to reach a scale of 10.38 billion yuan in 2019 and a scale of 42.57 billion yuan in 2023, more than four times that in 2019.
In fact, looking at the digital music market from 2013 to the present, the growth rate of 113.2% in 2015 was because the National Copyright Administration of issued the "Notice on Ordering Online Music Service Providers to Stop the Dissemination of Unauthorized Music Works", which is known in history as the "strictest copyright order", which is also the beginning of the active authentication of the digital music market.
According to iMedia Consulting "2019 China Online Music Market Monitoring Report": As of the fourth quarter of 2018, the number of users of China's music client has reached 542 million. But compared with the huge user base, paid data is actually not optimistic. According to iResearch data, the payment penetration rate of digital music in 2018 was only 5.3%, and there were 38.77 million paid music users in China. This shows that paid music in China is still in its infancy.
From the perspective of the overall revenue composition of China's digital music platform, its revenue mainly comes from three aspects: user payment, advertising revenue and copyright operation.
can be seen that before the genuine reform, the platform's revenue mainly relied on advertising, but because the digital music platform itself has weak advertising monetization capabilities, the revenue scale is actually limited. After the policy was implemented, most of the advertising positions in the open screen, banner, push push and comment areas are still left to music-related content, such as song promotion, concert ticket purchase, etc., so the proportion of advertising revenue in the overall revenue has gradually decreased. At the same time, the digital music platform has transferred the copyright of music to third-party institutions, and copyright operation revenue occupies a place. In addition, music platforms actively promote the payment system, and the proportion of user paid income has continued to increase, accounting for nearly 60% in 2018.
According to Questmobile's research, my country's online music users have a high willingness to pay, and the overall willingness to pay is close to 60%. Especially for those under 35 years old, the willingness to pay is as high as more than 60%.
Overall, with the general strengthening of music copyright awareness and the transformation of consumption concepts of the younger generation, the payment awareness and willingness of all users have laid the foundation for the next step in music payment.
A Brief History of Chinese Music Paid
The history of Chinese paid music is not a smooth road, but is paved by the failures of several companies.
mentioned the paid start of Chinese digital music, which can be traced back to 2000 - a music website called "Netfrog".
In addition to basic digital music paid downloads, the website also covers the sale of music peripheral products (including music books and instruments sales) and the purchase of concert tickets. At the same time, Netfrog was also the most comprehensive music information media platform at that time, and also helped musicians promote and monetize. Its founder Feng Chujun once said, "Web frogs are made too early and too advanced!" Now, this statement is not unreasonable.
In 2005, the ringtone market exploded, and the ringtones of "Two Butterflies" sold more than 100 million yuan in revenue. Jujing Music Network and Patriot Music Network began to try paid downloads.
In 2006, media reported that Patriot Digital Music Network reached a cooperation with four major international record companies, but in 2009, the website stopped its services. On the other hand, Jujing Music Network obtained Yao Ming's investment and reached cooperation with major record companies to start trying paid download business. However, later, the website also transformed from paid downloads to free trials. The most important reason is not difficult to imagine: other websites provide free downloads and auditions, so Jujing Music Network has few paid users and its income is difficult to cover the high copyright fees.
In addition, Xiami Music also tried a new paid model in the early days, which encouraged users to upload music independently while implementing a paid download model, and used the income from paid downloads to compensate the record company. However, the move was not recognized by the record label. On the other hand, the news that an independent musician sued Xiami Music for infringement also caused a lot of controversy... Later, Xiami Music, once the favorite of literary and artistic youth, failed to withstand the attack of the copyright era and eventually had to "sell" to Alibaba.
With the gradual promotion of record companies and music platforms, a copyright policy has finally brought good news to the new era. On the other hand, in the copyright war between Alibaba, Tencent and , NetEase, , music copyright prices have also risen. The current situation of "income but not enough" has also made music platforms unable to find ways to promote music payment and scale, and the entire industrial chain has gradually entered a virtuous cycle.
According to the report of iMedia Consulting, in addition to subscribing to monthly services, Chinese online music paid users will also purchase digital albums in 2018. Of these, 43.1% of them will buy 3-5 digital albums. With the help of many fan-type and strength-type artists, the willingness to pay for music has also been effectively activated. Although the exclusive competition for copyright is broken under the coordination of the National Copyright Administration, the differentiated operation of the 1% music library between platforms is still an important competitive bargaining chip. At this point, it is not difficult to understand why QQ Music has begun to implement VIP strategies to listen to Jay Chou’s songs.
At present, domestic mainstream music platforms have launched paid subscription systems mainly based on music packages and VIPs to distinguish ordinary users. Among them, the difference between the 8 yuan music package and the 15 yuan (12 yuan) super VIP users is mainly concentrated in the value-added services related to music. In addition to subscription payment, the platform has also launched a single download system for some users who do not want to book monthly, which is generally 2 yuan per title. In addition, paid digital album download is also a cooperative model. Generally speaking, most digital albums also have purchase time agreements, ranging from 1 month to 1 year. Users can listen to them for free after they expire.
There are also many cooperation models between the copyright owner and the platform. Music pioneer learned from an industry insider engaged in copyright work that "the distribution method of is mostly determined by the musician/copyright party and the platform. Free, membership package and paid digital albums have their own advantages and disadvantages. At the same time, for artists to independently propose paid listing, the album also needs to be evaluated in an overall manner, including tracks, artist popularity, promotion needs, and market average prices, and also consider the pre-production and post-promotion needs." How far is the explosion of
music payment?
Compared with the mature US market, the Chinese music-related market is still in its infancy.Data shows that the revenue of recording music in the United States is expected to reach US$900 million in 2018, while China's revenue of recording music in the same year was only US$120 million. But from the perspective of growth, China's music industry is in a stage of continuous growth.
According to a report released by the American Recording Industry Association in 2019, in 2018, digital music in the United States accounted for 86% of the entire music industry market (11% of digital downloads + 75% of streaming).
At the same time, the number of paid subscribers in the United States has exceeded 50 million.
As of the end of 2018, the user payment rate of Spotify has reached 46.3%. But this may be attributed to the service gap between Spotify members and non-members. Spotify's non-members are required to listen to ads for more than ten seconds, and are strictly restricted in the number of songs on demand and use locations.
But China still has a huge population advantage. With the low payment rate, there are still about 38.77 million paid users, which has exceeded the number of paid subscribers in the United States in 2017. This is also one of the reasons why China's online music market is widely favored.
We once mentioned that the music industry is re-taking the path of the video industry. For example, the payment dilemma once also appeared in online video platforms, but with the rapid rise of homemade content, it has driven the growth rate of paid members. Guojin Securities Research Report said that is expected to have iQiyi and Tencent Video in 2019 for H1 payment penetration rate exceeding 18%, and its members may exceed 100 million, thus entering the post-era of "over 100 million members".
As early as 2016, Nelson reported that China's online video market has already led the world. Compared with the music industry, its rights and interests such as preview, advertising-free, and exclusive content are more attractive, and there are huge differences between members and non-members. This results in the ARPU value of video users exceeding 5 times that of music users.
In terms of the payment amount of paid users, the quarterly payment amount of online music APP users in 2018 was concentrated at 5-20 yuan, a proportion of more than 63%.
However, overall, the transformation of the music industry from the traditional record industry to the digital music industry has begun to show results. According to the IFPI 2019 Global Music Report, the global recording music industry revenue increased by 9.7% in 2018 to US$19.1 billion, of which digital revenue increased by 21.1% to US$11.2 billion, exceeding the US$10 billion mark for the first time in history, and currently accounts for 58.9% of the total recorded music revenue. It is worth noting that digital music now accounts for more than half of the total music revenue in 38 markets around the world.
At the same time, the report also shows that as of the end of 2018, the number of paid subscriptions for music streaming worldwide reached 255 million. The figure means that more than 4% of the world's population will subscribe to paid music services this year. According to IFPI's "2019 Global Music Report", China has entered the top ten music markets in the world, ranking seventh.
Although China's digital music market is still in its infancy, the revenue growth rate is restricted by policies and business models and fluctuates greatly. However, with the cross-border exploration of online music platforms and the mature application of 5G, VR/AR technologies in the field of online music, the consumption content of music will be greatly enriched. This also means that online music services may refer to online video services to give paid users more differentiated rights.
can be foreseen that it is not just Jay Chou, but more high-quality content will be transformed into payment in the future, and the explosive period of music payment is coming.
References:
1, "QuestMobile China Mobile Internet Online Music Industry Report", http://www.questmobile.com.cn/research/report-new/40;
2, "QuestMobile Pan-Entertainment Paid User Insight Report", http://www.questmobile.com.cn/research/report-new/4/;
3, "Inventory of User Paid Development of China's Digital Music Industry in 2018", https://mp.weixin.qq.com/s/GYFGjsRF4FMuvbrCF-lBGw;
4, "The Paid Sadness of China's Digital Music", https://mp.weixin.qq.com/s/nm0v62Ir256cpiEc6jhJ2Q;
5, iResearch Consulting "2019 Digital Music Industry Report";
6, iResearch Report | 2019 China Online Music Market Monitoring Report", http://www.iimedia.cn/63766.html;
7, "IFPI2019 Global Music Report";
8, "RIAA 2018 YEAR-END MUSIC INDUSTRY REVENUE REPORT》, https://www.nielsen.com/cn/zh/insights/news/2016/china-leading-the-advance-of-on-demand-video.html.
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