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Dec. 21 (NBD) – China's music industry reached 347.094 billion yuan (50.4 billion U.S. dollars) in 2017, a year-over-year increase of 6.7 percent, according to a report on the development of China's music industry released during the 6th China International Music Industry Conference and the 5th Music Industry Forum held in Beijing on Wednesday and Thursday.

The music industry is gradually becoming an important driving force for the domestic pan-entertainment consumption.

The report also indicated the size of China's digital music industry stood at 58.06 billion yuan (8.4 billion U.S. dollars) in 2017, up 9.6 percent over the prior year.

The number of digital music users mounted to 523 million in 2017 with a penetration rate of 66.4 percent. But the subscription rate of premium members was registered at only 4 percent, which leaves much room for the development of the sector.

Statistics from the International Federation of the Phonographic Industry (IFPI) showed in terms of profits, China has become the 10th largest music market in the world, compared to the 19th position in 2014. It's noteworthy that China's digital music industry is seeing high levels of licensed engagement with 96 percent of consumers listening to licensed music.

Tencent Music Entertainment, a music streaming platform which debuted in New York on December 12, is one of the biggest players in China's digital music industry. 

Yang Qihu, general manager of the legal and government affairs department at Tencent Music, noted at the conference that a premium membership model and a solid copyright protection system have been preliminarily established in China's digital music market. But there is still a big gap between the domestic and overseas digital music sector, Yang added.

For example, Swedish music streaming platform Spotify's revenues in 2017 were approximately 5 billion U.S. dollars, nearly doubled as compared to China's digital music industry's output value of 18 billion yuan (2.6 billion U.S. dollars) for 2017.

The subscription rate on China's digital music platforms is currently no more than 4 percent while that of Spotify is 43 percent.

But compared with Tencent Music, Spotify's profit-earning model lacks diversity since the music platform earns profits only from advertising and premium membership.

Different from its Swedish counterpart, Tencent Music is benefited from the diversified business ecosystem of the tech titan Tencent and is providing diversified products including digital music platforms like QQ Music, live streaming services like Fanxing.KuGou and mobile Karaoke app WeSing.

Yang called Tencent Music's business model as one featuring music-based social networking and entertainment.

In Yang's view, the exploration of new profit-earning models, the maintenance and enhancement of copyright protection system and the development of original contents are still the development directions and challenges for digital music platforms including Tencent Music.

Zhao Zhian, a professor at the School of Music and Recording Arts of the Communication University of China, observed that more efforts should be made to provide spin-off services related to music-based e-commerce, short videos, social networking and digital distribution to diversify income streams, so as to promote the sound and rapid growth of China's music industry.

Email: wenqiao@nbd.com.cn