The Chinese music market–wazzup?

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I’ve been wondering what the dealio is with the Chinese music market for some time–you know, it’s right there by Korea, it’s big, and the large K-Pop labels always seem to be gunning for it.

Block B seems to be doing pretty well these days in Hong Kong and Taiwan, but there’s just not that many people in either market–Hong Kong has 7.2 million people and Taiwan has 23 million. (Japan has 127 million, which explains why it gets so much more attention from the group.)

China, in contrast, has 1.3 billion people. And the numbers Block B was able to attract just screwing around online were quite shocking to me.

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When My Music Taste was trying to put together a Chinese concert last year, they did a voting page, and (I’m having to rely on memory here) both Beijing and Shanghai got something like 20,000 votes. You know, each.

So I decided to go poking around. Not surprisingly, a lot of the U.S.-based media approaches the Chinese music market from the perspective of U.S. companies–so China kicks out iTunes, and it’s this HUGE story.

But there is quite a bit of stuff in English that’s more focused on the Chinese music market itself. This article and the IFPI’s China page give good overviews–basically the market is very small from a revenue perspective (smaller than Switzerland!), but that is changing.

China Music Radar, an English-language blog focusing on independent Chinese music (I told you there was a lot in English out there!) notes that while Western media tends to blame China’s small market size on entrenched piracy, the truth is more complex:

Piracy is not a “barrier” or cultural characteristic. It is an entrenched structural flaw.
It’s the same rule as anywhere in the world – if pirating a piece of music is easier than jumping through the logistical hoops to acquire it legally, the choice is a no-brainer for most people.

It’s definitely true that music piracy is entrenched in China–so much so that for years Chinese digital-music companies typically offered pirated music!

But it’s also true that music piracy was once every bit as entrenched in the United States. I remember when Napster was a media darling, with the company’s founder appearing on magazine covers and investors clamoring for a piece of the action–all for a company whose business plan was based entirely on an illegal activity. (The 90s were an interesting decade.) Nonetheless, the United States managed to convert to a paid model for digital music.

Convenience is key in any digital market: Even selling my own book, I’ve seen people ignore a coupon for a free digital copy on one retail site in favor of paying for the book on another, because the second site was easier to use. So I tend to agree that, in a digital market, piracy will largely cease being a serious issue if you make it easier for people to buy something than to pirate it. And thanks to some recent regulatory changes, that seems to be where China is heading.

But it’s not a motherlode yet.

Look at Luhan’s record-setting album sales in China–those numbers are nice, sure, but they certainly would not be considered a huge deal in the United States, which has about a third of the population of China. Clearly not everyone is on the “Let’s pay for it!” bandwagon yet (and given how recent the changes have been, it would be a miracle if they were).

The other wrinkle is the price music sells for in China, which is pretty low. Obviously if you make music too expensive, no one will buy it (if forced to choose between food and music, most people will opt for food). But when you’re selling a full album for $3 and a mini-album for 60 cents, even healthy unit sales aren’t necessarily going to result in major revenues.

That probably matters less to musicians living in China, where the cost of living is lower. Being based in China and being with a larger label has another advantage: Your right to be paid is more likely to be respected.

So, yeah. China is definitely a promising market, but a promise is not a sure thing. Block B may have loads of fans in China, but are they seeing equally large revenues from there? I doubt it.

Still, things are changing, and it’s certainly worth it for Block B to reach out to the Chinese market and to do things like the Chongqin event.

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 Taeil the tattooed trade diplomat

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11 responses »

  1. The money to make in China is the endorsements. That’s what T-ara gets, millions in endorsements. So, building their image and popularity there is a good move. I’m not in the East Asian music business, so I’m guessing here, but getting video views on whatever that Chinese equivalent to YouTube is, and showing fans love them and watch their antics on v live and other things means CFs. And that means “my babies” get richer. 🙂

      • People with big followings get lots of endorsements. That’s how a lot can make money just by being popular on instagram. They get given free things and they get money for showing themselves using those things.

        If Block B works more in China, and they seem to have a big following there just based on the numbers for Jaehyo’s CCTV alone (there was some remark about it being Chinese fans watching), they will get more popular and get those yuan. 🙂

        • Yeah, that’s the thing about endorsements–you get them on the basis of your celebrity. So maybe they can leverage their next Chinese airport riot into something worthwhile….

          • What they’re doing seems good: leveraging the internet and apps to reach fans, and building they social media presence there plus events like that trade show they’ll be at.

            • Yeah–and making their popularity in China more obvious would probably help attract other opportunities along with endorsements, like events or appearances in Chinese media. That’s the other drawback of not having China be a fully-developed paid-music market–if there’s no money in it, there’s no real motivation for the “retailers” to keep track of how well songs are doing.

  2. I would agree with tulipsaki that the money would definitely be more with the endorsements, concerts CFs that kind of thing rather than the traditional selling of music. There just isn’t a mentality there for buying real original physical albums or even paying for digital music. Its hard when you’re constantly surrounded by easy access to pirated stuff. When I was in China on business trips a few years ago, I remember going into huge stores which sell pirated copies of dramas, CDs, games anything you can think of. And they weren’t even the ratty “burned off your hard drive in a plastic sleeve” pirated copies either, these were proper copies with hard cover booklets printed, CDs had the songs printed and they were going for dirt cheap. You wouldn’t mistake it for the real deal either as you can tell straight off it wasn’t the real thing. Maybe the paper printed was of a shoddy material, the CD printing wasn’t lined up, words wrong, different compilations of stuff you knew the artists themselves never came up with. I even got a loyalty card lol… and the stores were franchised…

    • Apparently the digital stores were the same–all free and pirated, and nicely organized for your convenience! Whoo-hoo! But I think the Chinese government is realizing that it’s not just foreigners making music and video–China is never going to have a fully-developed entertainment industry if pirated stuff is so readily available.

  3. Pingback: This is kind of a weird thing | My Other Blog

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