Paid services help drive online music market

China's online music market is set to see speedy growth in the next few years, industry experts said.

The sweet sounds of the upturn are a product of the spread of the mobile internet, authorities' efforts to combat piracy and the younger generations' increasing willingness to pay for copyrighted music, they said.

Still, more efforts should be made to accelerate the application of 5G, artificial intelligence, virtual reality and augmented reality to improve the user experience and boost the digital music industry's development, experts said.

Major online music platforms have ramped up efforts to launch paid membership services and offer online live performances during the COVID-19 pandemic to provide high-quality music content.

Tencent Music Entertainment Group, a major online music and audio entertainment platform, reported it had 76.2 million users who paid for online music in the fourth quarter, an increase of 36.1 percent year-on-year. Customers who paid grew by 5 million from the third to the fourth quarter.

Revenues from music subscriptions stood at 1.95 billion yuan ($306.2 million) in the fourth quarter, representing a 23.5 percent year-on-year growth due to the increase in the number of paying users.

Liang Yunheng, vice-president of the enterprise development unit at TME, said there is increasing demand among users for high-quality content and a strong willingness to pay for copyrighted online music.

Given the nation's efforts to promote copyrighted material, more and more Chinese consumers are willing to pay for music, Liang said, while emphasizing that "premium music content is the key to attracting paying users".

Liang expressed optimism about the prospect of the digital music payment market. The company has established a comprehensive original content production system that can systematically create, evaluate and promote musical works, Liang added.

"We aim to provide our users with an abundant immersive music entertainment experience on the platform," Liang said, adding they are working harder to cultivate a vibrant podcast ecosystem and improve different kinds of long-form audio offerings.

In the fourth quarter, its monthly active users of long-form audios exceeded 150 million, representing 65 percent year-on-year growth.

TME Live, its live performance brand, held 56 performances via interactive and virtual experiences in 2021. The company is also expanding its presence in social entertainment through audio livestreaming, international expansion and virtual interactive offerings.

The revenue of China's digital music market reached 42.89 billion yuan in 2021, up 20 percent on a yearly basis, according to market research company iiMedia Research. That figure is expected to reach 48.27 billion yuan by 2022.

That revenue is mainly from user payments, advertising and copyright operations. In particular, paid subscriptions for online music streaming are expanding, according to iResearch, also a market research company.

"Instead of purchases of digital albums, users who buy exclusive membership services are the main force for bolstering the music payment industry," said Chen Xianjiang, founder of ReChord, a website that reports on the music industry, adding that the proportion of users who are likely to purchase monthly or yearly memberships is rising.

These platforms should do more to cultivate and promote original music, expand their business scope in podcasts and audiobooks and amplify product lineups, Chen said.

Cloud Village Inc, the music streaming arm of Chinese internet company NetEase Inc, said the number of its monthly users paying for online music services expanded to 28.9 million in 2021 from 16 million in 2020. This reflected a rapid increase in people willing to spend money on music and membership services.

The company's monthly active users of online music services grew to 182.6 million in 2021 from 180.5 million in 2020. That is the number of customers who had an interaction with the company's products within a month, and while it was a larger number, it grew more slowly than the subset of users willing to pay.

The company has made steady progress in cultivating users' willingness to pay and explore innovations in social networking, and further diversifying its content offerings. An example would be a site allowing fans of popular bands to communicate with each other and buy virtual gifts for their favorite idols during livestreaming concerts. It also strives to deepen collaboration with music labels, including customized music, ticketing and live shows.

It will invest in research and development for artificial intelligence, machine learning and data analytics to gain more insight into users' needs and preferences and to make personalized content recommendations, the company said.

Observing that more Chinese have the awareness and ability to pay for music content, Wang Liying, a senior analyst at iResearch, said major music platforms have stepped up efforts to offer more copyrighted music and integrate more social entertainment functions to enhance the user experience and their willingness to stick with a platform.

These platforms should continue to make full use of various technologies, such as 3D, virtual reality and augmented reality to enhance the quality of online livestreaming performances, Wang said.