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He Yang: An annual music report says music sales in China rose 63.8% in 2015. What’s contributed to this seemingly dramatic rise in revenue? Does it mean that China’s music market is moving to a paid model? Guys, tell me more about what’s behind this glamorous figure.
Yu Yang: The International Federation of the Phonographic Industry’s annual music report says that music sales in China rose 63.8% percent in 2015, to $170 million in total, which is “a tremendous increase”. And the report says China tops the list for record companies. As we know, China’s music market witnessed the rampant piracy in the past, but it seems the situation has changed.
He Yang: But in emerging markets, we can’t rival with what the Americans have paid for music, for example, last year, but still, I mean this is kind of a new thing. (Yeah). You know, people are paying for stuff online, that is… (That’s a good start?) I guess so.
Ryan: You know, I disagree with both of you. Because when I first came to China, which was 2013, someone introduced me to QQ music, and l was like OMG, (laughing), I’ve can totally listen to all my jams, and it’s free! You know, before I was using a kind of streaming service, and I was paying a monthly fee too to listen er… as many…as much music as I wanted, but I was paying for it. So when I found out about the QQ music, I was so excited. But according to the IFPI’s report, the music industry achieved a key milestone in 2015 when digital became the primary revenue stream for recording music worldwide, overtaking sales of physical formats for the first time. So here we are seeing obviously physical formats are going kind of away, and the world is going to a digital platform and so I think we’re gonna see that government and industries will start to regulate that on more, more sale.
He Yang: Yeah, that’s true and I think it’s quite interesting to see that, while, people want music, people want audio products, and you want Round Table, and so it’s about how do you monetize through what medium, I suppose, and now I think, when you look at the western model, with especially you know, with Spotify, with iTunes, you see there is a way to make money from people downloading music online and do you think this is kind of happening in China right now?
Ryan: I would say yes. Yan Xiaohong, deputy director of the copyright administration, recently said more than 2.2 million illegal songs had been removed within the two months of an issuance of kind of removal of copyright-infringement content, which I can personally say I experienced that I remember I was using QQ music maybe like a year ago and this new Justin Bieber album came out. I am ashamed to say I was curious, guys. I was curious. So… (Now, you’ve loved it.) Ah ha, I… I…Well, Okay, So I can stream it. I can listen to it. No actually, no, I couldn&`&t listen to it. I couldn&`&t stream it. I had to… I couldn&`&t use the QQ music to actually play the song, but it was there and gave me this offer and saying: “Hey, do you want pay for it?” I was like no way, dude, Justin Bieber, I am not…haha (Not paying for him?) Any Bieber’s fans out there, this is just my personal preference. But I don’t think I would pay for a Justin Bieber song. But, yeah, so I, I would say like, definitely, they are cracking down on these free music sites.
Yu Yang: Yeah, besides the government’s involvement, I think the Chinese technic giants like Tencent and Alibaba is making their way to a paid model, like Tencent, it first launched a paid service in 2008, and I think China has been making efforts to cracking down on the music piracy for years, but now I think this time is kind of different with the level of engagement by the government and major Chinese companies.
He Yang: Yeah, I think we’re seeing a bit of change here from the government’s seriousness and determination to sort of clean up the piracy online. And also, I think a report earlier last year actually said that those who were born after the 1990s are more inclined to pay for music online or stuff online that previously used to be free. And I think that’s an important education to people, ‘cause (Yes) the Internet is a great place for free stuff, but have you ever thought about the people that put so much effort and creativity into what you are getting for free. It’s not right. Those people need to be rewarded. (Yeah, they deserve credit.)
Ryan: I am in. I am right there with you, they…they deserve rewards for their work.
He Yang: Yeah, certainly, and Lexie says, she is on Wechat says, He Yang, after listening to your brain wash of… you need to listen to the live show, I am finally here, and she says that there are some songs on QQ music can no longer be found either.