(Yicai Global) May 9 -- TF Boys or ACrush may sound unfamiliar to millennials in the UK or the US, but that could soon change if the Chinese music industry manages to achieve one of its main aims: that of reaching a global audience, a move heralded by leading music conglomerate, Tencent. As noted by business analysis site, CKGSB Knowledge, "the world's most populous country has the potential to become the world's most profitable music market," even though it still has a long road to tread. According to a report by the International Federation of the Phonographic Industry, China was the 12th largest market in the music industry in 2016. Still, if Tencent and the Chinese government are to have their way, these figures could be vastly different 10 years down the line.
Social Media Drives Success in the Chinese Music Industry
Cussion Pang, CEO of Tencent Music Entertainment Group, has stated that social media is helping to build a community that will eventually help turn China into one of the biggest music markets in the world. He notes that between 2012 and 2016, the industry more than doubled its profit margins and of the reasons for this success are new controls on piracy. In 2015, the National Copyright Administration of China removed 2.2 million unlicensed songs from online music platforms. Tencent has also played an important role in curbing piracy, by signing licensing deals with Universal, Sony, and Warner. Under these agreements, Tencent (which also bought out two of its leading competitors) will have the exclusive right to stream content by all these companies. Tencent's current market share in the music industry amounts to over 70%.
China Leading the Way in Digital Sales
Although China is still in the early stages of its international takeover of the music scene, it is already leading globally in one sector: digital music/streaming sales. China, on the other hand, receives 96% of its sales from exclusively digital sources, compared to only 47% in the UK. As noted in The Economist, the boom in digital sales can be attributed to various reasons, including the ease with which streaming services can be accessed on smartphones, and a plethora of apps such as Alipay, which make it easy for younger Chinese clients to make small purchases digitally.
Appealing to International Audiences
If China is to become a leader on the international music scene, it is also vital to generate interest in Chinese artists, something which The 13th Five-Year Plan for Economic and Social Development plans to do. Article 69 reads that the government aims "to carry out more cultural exchanges and create new ways of communicating with international audiences, of conducting international cultural exchanges, and… share the unique appeal of Chinese culture." One way to do so is through the emergence of influencers in music and fashion.
Chinese Role Models Booming Abroad
Artists like Kris Wu, a Chinese/Canadian singer and actor who was able to dig into a seemingly foreign culture thanks to ubiquitous connectivity and the availability of cutting-edge recording equipment, was able to attract the attention of major A-listers on the hip-hop scene, including Travis Scott, with whom he collaborated on Number One iTunes hit Deserve. Wu recognizes his responsibility in bridging two vastly different cultures, a role he is playing with great panache. In addition to making music, he has collaborated with Burberry on a 19-piece collection based on his own personal style, and he has loyal fans both in Asia and the US.
International Artists Seeking to Break Into the Chinese Music Industry
Because streamed music represents such a large chunk of the Chinese music industry, Stu Bergen, chief executive for Warner, has noted that we will soon "start to see international artists wanting to 'break China' just as much as they've always wanted to 'break America'." The Tencent phenomenon, which saw the company bring a plethora of platforms under its own QQ music platform, has spelled no less than a renaissance in the industry. Tencent claims it currently has 700M users.
China may still have a considerable uphill climb before it is to rival the American, Japanese, or British music industries, but its digital dominance promises a positive outlook for the upcoming decade. With more international artists set to attempt to appeal to Chinese audiences and vice-versa, we may be in for a new era in which Chinese artists become a powerful force in music and fashion.
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