Pirate music market China is on the up as recorded music revenues spike on the back of consumer appetite for streaming (up almost a third last year). And local online giant Tencent is leading the charge with its streaming outfit QQ Music, as well as its new acquisitions Kugou and Kuwo, and is able to boast 15 more than million paying subscribers, along with a market share at over 70%.
“Our number of monthly active users accessing music is actually over 600 million, which means, at 15 million, our conversion to subscription is still less than 3%,” Andy Ng, Tencent Music Entertainment Group vp tells the IFPI. “If you look at other services, in other countries, the conversion rate is more like 20-30%, so we see a huge opportunity and potential for growth.”
Tencent is looking to boost conversion by providing a range of prices from$1.16 to $2.18 per month, and by offering benefits such as exclusive content, concert tickets and video gaming credits for gamers.
“We currently still offer a low-quality, free streaming service, because it will take some consumers time to get used to the idea of paying for music, but we are showing the quality you get with a subscription and making sure there is a big difference between what you get free and what you get when you pay,” says Ng.
Samuel Chou, CEO, China and Taiwan at Sony Music Entertainment, reckons that 2016 was the first year of a new era for music in China as the authorities started tackling piracy, while he believes that mobile is the driving force in the market. “The number of mobile users now accessing music is over 500 million and, in general, mobile users are more willing to pay; people will pay for things on their mobile that they won’t pay for on their PC,” he says.
Image: QQ Music