Music Business Regains Confidence In the Chinese Market

mobile_music_1487070222 Chinese digital music platforms are gaining more and more attention from music entertainment firms in other countries. On February 27th, leading Chinese digital music platform NetEase Cloud Music and Japan’s biggest music entertainment firm Avex Group Holdings Inc. announced the signing of an agreement forming a strategic partnership that grants the Chinese platform an exclusive license in mainland China to the copyright of all the songs in the Japanese firm’s massive portfolio.

Many of Japan’s leading artists can be found in the portfolio including Ayumi Hamasaki, Every Little Thing, Koda Kumi, Ai Otsuka, AAA and the Wagakki Band. The entire music collection in the portfolio is already available on the NetEase Cloud Music platform for any Chinese user who would like to give some of the tunes a listen.

Chinese music industry insiders said that after years of talks between the two countries’ many firms involved in the music trade going nowhere, this “breakthrough” agreement between NetEase and Avex could mark the beginning of a new era for the sector and a harbinger for similar agreements, not only with other Japanese entertainment firms, but also with owners of large music portfolios in other countries, creating an environment where music, whether from Japan or elsewhere, enjoys the same legal protections in China as it does in the rest of the developed world.

NetEase Cloud Music CEO Zhu Yiwen, in his presentation accompanying the announcement, explained that the Chinese market has developed an active interest in and is witnessing a rapidly increasing demand for Japanese music.

According to usage data from the music platform, there has been, what he termed, an explosive increase in the number of times that Japanese songs have been listened to, especially songs associated with Japanese animation, comics and games (ACG), with the number of music streams from Japan increasing 80% over the previous year, while ACG-related music saw its streams soar a whopping 280%. The same data also reflects a rapidly growing interest in Western music, with streams of songs by North American and European acts jumping 75% year-on-year.

The same data shows that it is mainly the youth segment, especially fans born after 1990, expressing the growing interest in Japanese and Western music, indicating a major shift in the kind of music that can be expected to be consumed in China looking forward.

Before NetEase Cloud Music and Avex announced their partnership, none of the music platforms in China had anything amounting to a sizeable Japanese album collection with proper copyright protections, limiting access for Chinese audiophiles who were developing an interest in the music. The growing interest created a need for a legal platform with a healthy inventory through which the music could be enjoyed.

Western music was also receiving more and more notice as a result of the efforts on behalf of global players, among them Universal Music Group and Warner Music, to create an audience for the genre. Yet, based on demand from Chinese audiophiles, there is still huge room for growth. According to a survey conducted by NetEase, 77% of the users of the platform expressed a preference for Western music, even going as far as displaying a like for it over homegrown talent.

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