The music consumption on a
global-scale has been experiencing big transformation, which is represented by
three main characteristics: from physical to digital, from PC to mobile
platform, and from downloading to online streaming. While the first two
characteristics are decided by the developments of whole Internet industry,
what is worth mentioning is the great growth of online streaming music. As the
report of IFPI shows, the revenue of global digital music has increased by
6.9%, reaching 6.85 billion dollars in 2014. Although the income of music
downloading keeps the biggest share by taking up 52% of the total income, it
has actually decreased by 8% compared to 2013. On the contrary, more and more
people have turned to consume online streaming music and the subscription
service has become the new driving force of digital music.
The
revenue of online streaming music consisted of two parts, including ad
supported streams income and subscription streams income. It could be seen that
in subscription streams had increased from 18% in 2013 to 23% in 2014 of total
digital music revenue, attaining 1.57 billion dollars. Meanwhile, the number of
people who paid for the subscription service had also grown steadily, reaching
41 million last year. In many counties such as Sweden, Korea and Norway, the
revenue of subscription streams had ran far beyond that of download. The rapid
growth of subscription streaming is due to permeation of smartphones as well as
the bundling partnership with telecoms to provide streaming service.
However,
when looking back at Chinese digital music industry, we find that the situation
might be more complicated. Many Internet giants such as Alibaba and Tencent
entered the battlefield of online music long time ago and had got ready through
merging small service providers, but it may take them much longer to change the
habits of Chinese users.
First
of all, according to the research of Tencent, the need for consuming online
streaming music is not that strong, for that almost 60% of people just
occasionally listen to music online. The main reason is that 59.2% of
respondents think it costs too much traffic on their mobile phones. Secondly,
there is a long way to go before the Chinese users cultivate the habit of
paying for online streaming music, for that only 19% of them are now willing to
pay for the music they consume. However, half of the users say they would
accept the plan of paying no more than 10RMB every month for online streaming.
Considering
the success of online streaming service in the global market, the first thing
Chinese digital music industry can learn is to promote the subscription service
and guide the users to pay for the service. Undoubtedly, the number and the
quality of music have to be the main selling point during this process. What we
can see is that many music providers have already adopted this solution. For
example, on Xiami although people can still consume the online streaming music
for free and download each song at 0.8 RMB, if the user is willing to for 15RMB
every month for membership, he will enjoy the 320kbps high-quality music and
downloads 100 songs for free.
Besides,
in order to promote and get revenue from the legal music, Chinese digital music
has to fight together against the pirates, for that they are the reason why
Chinese users are accustomed to free music consumption. The law system needs to
be completed and the punishment for pirates should be more severe. Only in this
way the online music providers would pay for the copy rights and the users
would pay for the users. Finally, since many people are worried about the
traffic when listening to music on mobile, the music providers can also
cooperate with the leading telecoms, so that they can attract the users to pay
for the special traffic plans for streaming music consumption on mobile platforms.
Chinese
market is the biggest market of digital music, whose potential for revenue
making would be inestimable. As long as it can learn from the global music
industry to develop online streaming music and cultivate the users’ habits of
paying, it will be undoubtedly prosperous in the near future.
Reference:
1. Tencent(2015)2015年中国手机在线音乐调查
80%的用户未曾付费. Retrieved on May 2nd,2015 from: http://www.199it.com/archives/337689.html
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