Internet giants in China are stirring up the global music market.

Original: Fan Zhihui’s music first sound

Author | Ersansan Editor | Fan Zhihui

When Lil Nas X recorded the single "OldTown Road" in a small studio, he never thought that more than 70 million people would use this song to record short videos on TikTok. It is even more unexpected that such a popular way will make him occupy the top position of Billboard Hot 100 for 19 consecutive weeks.

Maybe even TikTok didn’t expect that not only in China, but also in European and American markets, musicians began to use TikTok to promote their songs, and record companies paid more and more attention to this platform. At the same time, as the most popular social platform, TikTok frequently appeared on the front pages of major overseas media, became the number one competitor of overseas Internet giants, and was also targeted by the US Securities and Futures Commission.

ByteDance, an Internet company in China, successfully stirred up the overseas Internet market through TikTok. However, this is only the tip of the overseas music market layout of China Internet giants.

Netease: machine emperor blessing, cast a dark horse in the African music market

Last month, Netease released its financial report for the third quarter, and the revenue of Netease Cloud Music reached a new high. At the same time, BoomPlay, a music streaming service owned by Netease, reached a copyright licensing cooperation with Sony Music. Previously, it reached copyright licensing cooperation with Universal Music and Warner Music Group in November 2018 and March 2019 respectively.

What’s the origin of BoomPlay? In 2017, the intelligent terminal production service provider Chuanyin Holdings and Netease established a joint venture company Chuanyi Internet, and BoomPlay is a music streaming platform for the African market under Chuanyi Internet.

According to MBW, Boompla can be divided into two modes: free mode and paid mode, and paying users spend about $1.50 per month. At present, BoomPlay has covered most of Africa, with 60 million users, an increase of 18 million compared with February this year, and an increase of about 2 million users every month.

According to seven wheat data, this two-year-old music streaming platform ranks in the top five in the music application rankings of Apple stores in many countries/regions in Africa, and ranks in the top three in Nigeria, Ghana and Tanzania.

In March 2019, Boomplay announced the completion of the $20 million Series A financing, which was led by Maixing Investment, followed by Yunshi Capital and other strategic investors. The funds raised in this round will be mainly used for music library expansion, product upgrade and talent introduction to support the team to further consolidate its leading position in the African market.

The development of market economy in 54 countries/regions in Africa is very different. Although sub-Saharan Africa accounts for 15% of the global population, it only accounts for 2% of the global record music market, and its streaming media market is "still in its infancy". However, according to IFPI data, South Africa’s streaming media revenue increased by 334.2% in 2016 and 40.2% in 2017, from 8.4 million US dollars in 2016 to 11.78 million US dollars in 2017. Some media believe that Africa’s music industry is a volcano waiting to erupt.

It is estimated that by 2020, 500 million African citizens will have smartphones. Chuanyi Internet’s other major shareholder, Chuanyin Holdings, is the largest smartphone service provider in Africa, with a market share of about 40%. According to the IDC report, Voice ranked first in the smartphone market in Africa in 2018.

BoomPlay pre-installs the software in the mobile phone due to the advantages of the voice service provider, which not only enhances the competitiveness of the mobile phone, but also brings new users to BoomPlay continuously. Based on Netease’s experience in music streaming media business, with the help of the business advantages of voice transmission in the local market in Africa, the combination of the two makes Boomplay expand rapidly in the African music market.

ByteDance: Short video+streaming media, sweeping overseas music market.

According to CNBC, ByteDance beat Tencent and Baidu in the first half of 2019 and became the second largest digital advertiser in China after Alibaba. Compared with the same period of last year, ByteDance’s advertising revenue in the first half of 2019 increased by 113%, most of which came from its short video platform "Tik Tok" and news information application "Today’s Headlines".

In 2019, TikTok’s overseas version of TikTok achieved amazing growth. It is no exaggeration to say that TikTok has become a global phenomenon. According to the report of Sensor Tower, as of November, TikTok has more than 1 billion users worldwide, with about 800 million active users every month. In June of this year, TikTok users spent a total of $10.8 million, with American users accounting for about 20%. According to foreign media reports, TikTok has made a profit of $175 million on App Store and Google Play Store.

In November 2019, TikTok also launched its own ticketing function-TikTok Tickets in Thailand, which provides tickets discounts and discounts for concerts, movies and other activities. At present, TikTok Tickets has reached cooperation with several entertainment brands in Thailand, such as BEC Tero, Major Cineplex, Neon Festivals and Ticketmelon.

In addition, according to foreign media reports on December 11th, ByteDance quietly launched a new music application Resso in India and Indonesia in May this year. According to Sensor Tower data, about 27,000 users of iOS App Store and Google Play have installed Resso since it was released six months ago. Unlike Spotify, Resso displays real-time lyrics, allows users to comment under songs, generates GIFs and videos accompanied by music, and provides a monthly subscription service at a price of 119 rupees (about 1.70 US dollars).

At present, Resso has obtained the copyright of songs from Indian record companies T-Series and Times Music. However, according to informed sources, Resso has not yet reached a copyright agreement with Warner Music Group, Universal Music Group and Sony Music Entertainment.

Obviously, ByteDance’s traffic play and local operation are quite successful, which even makes overseas Internet giants a little overwhelmed. This China Internet company, which has more than one billion active users in the world, has made a large territory overseas through Tiktok and is attacking the music industry in its own way.

Tencent: shareholding alliance+strategic investment, layout of Southeast Asia and India markets.

In addition to the eye-catching overseas layout of ByteDance, as early as December 2017, Tencent and Tencent Music Entertainment reached a cooperation in the form of stock exchange alliance, and the two companies jointly held 9.1% of the shares of Spotify, becoming its third largest shareholder. At present, Tencent’s acquisition of at least 10% shares in Universal Music is close at hand.

Last month, according to a Bloomberg report, people familiar with the matter said that Tencent planned to acquire a 10% stake in UMG for $3.3 billion, of which about $2 billion might be in the form of equity financing. The report mentioned that Tencent hopes to complete the acquisition in the next few months, and may recruit more minority investors to acquire up to 20% of the shares of Universal Music. These potential investors include Hillhouse Capital and Singapore’s sovereign wealth fund GIC Pte.

Before joining Spotify, Tencent launched its own music platform JOOX in Southeast Asia in 2015. This platform, which is positioned as a multimedia entertainment application, provides a highly localized user interface, and also establishes a team of local experts to monitor and predict the situation of song lists and real-time broadcasting in real time.

According to seven wheat data, JOOX basically occupies the top five positions in the music application rankings of Apple stores in Hong Kong, China, Macau and Southeast Asian countries. JOOX also launched its own service in South Africa in 2017, and ranked fourth in the music application ranking of Apple Store. According to a media report in Bangkok, JOOX currently lives at around 10 million a month.

Last month, JOOX also launched activities such as listening to songs and sharing songs to do tasks, earning gold coins for VIP, obtaining K-song value-added services, and tickets for music activities. In addition, K-Pop fans can also use gold coins to support idols before the MMA awards ceremony and have the opportunity to get tickets for MMA 2019.

In addition, in 2017, the national karaoke under Tencent Music Entertainment also launched an overseas version of WeSing to enter the Southeast Asian market. Hundreds of kols from the Philippines, Thailand and Indonesia have joined WeSing and uploaded thousands of karaoke videos. In July this year, overseas media reported that "WeSing has been the most popular application among similar products in the Philippines for three consecutive months".

In order to meet the needs of diversified experiences and satisfy the interests of music fans, WeSing cooperated with MYX, the music channel of ABS-CBN, a leading media and entertainment group in the Philippines, and its activities included daily song lists provided by MYX and karaoke programs hosted by celebrities.

Similarly, Tencent has not let go of the Indian market, which is still in its infancy but is growing rapidly. In early 2018, Tencent invested $115 million in Gaana, an Indian streaming service. Gaana is currently the largest music streaming platform in India, with more than 125 million active users every month. The platform has more than 45 million songs, including Hindi, Tamil, Telugu, Marathi, Kannada, Punjabi, Malayalam, English and other languages, and users can try them out for free. This month, Gaana announced the first lineup of exclusive podcast programs on the platform.

Looking at Tencent’s overseas layout, on the one hand, it constantly adds its own good business, on the other hand, it continues Tencent’s consistent idea of leveraging partners to gain opportunities to enter new markets by means of investment, such as using equity transactions with Universal Music and Spotify to enter the mature European and American music markets.

Internet giants in China are stirring up the global music market.

"Its performance in the United States began to take off, especially for young people. Its growth in India is very rapid. I think it has surpassed Instagram in terms of scale. " Zuckerberg’s conversation inside Facebook was leaked, and this one refers to Tiktok.

Undoubtedly, the rapid popularity of Tiktok has brought a great sense of crisis to overseas giants. At the end of last year, Facebook launched a software called Lasso to benchmark TikTok, but its monthly download was less than 1% of TikTok’s-by the end of June 2019, Lasso, a similar short video software of Facebook, had an average monthly download of 15,000 times, while TikTok’s download in January increased by 6.4 million times. On November 12th, Instagram also released a TikTok-like product called Reels. The same is true of Twitter, but its attempt in the field of short video Vine has failed.

Although TikTok is a social short video application, it has also set off a gust of wind in the overseas music market. In a report of "Top Ten Media and Entertainment Predictions in 2020" published by Forbes, Tiktok added the word "Music" in addition to the prefix of social video. Record companies have incorporated Tiktok into their own marketing centers, and in terms of music copyright fees, the asking price of record companies has also risen with the valuation of Tiktok. At the same time, for the new music streaming platform launched by ByteDance, the parent company of Tiktok, all major record companies also expect to get a piece of it, which is in a game period.

In addition, the rapid development of China’s streaming music market has even played a role in forcing the functional innovation of overseas streaming media platforms. For example, Spotify added a video function Canvas this year, allowing artists to insert short videos into playlists and attach GIFs to song playing pages. This is not unrelated to the popularity of short videos.

At the same time, the scrolling of lyrics with tracks is a basic function in China’s music streaming media platform, but due to copyright restrictions in the United States and Britain, there has been no function of displaying lyrics for a long time. In August of this year, Apple Music launched this feature in IOS13, and soon afterwards, Spotify began to test the launch of this feature. Last month, it was reported by the media that Apple Music applied for a patent for lyrics search technology, and it has been released by the US Patent Office.

At the same time, while expanding their overseas distribution, China’s Internet giants have also forged closer ties with overseas enterprises, feeding back the domestic music market. Two months ago, both Tunecore and CD baby, well-known overseas distribution platforms, announced that they had reached a cooperation with TME to distribute the music of overseas musicians to China. On the other hand, China enterprises are appearing more and more frequently in overseas well-known music media such as MBW and Digital Music News. In various overseas news and reports, there are highlights such as "China is one of the fastest growing regions in the global music market" and "China ranks seventh among the top ten music markets in the world in 2018", which makes the global music market see the latest trends and development potential of China’s music industry.

It can be predicted that with the continuous improvement of the strength of Internet enterprises in China and the further development of the music industry in China, the Internet giants in China will become more and more active on the global stage.

References:

1.https://www.indianweb2.com/2019/12/02/gaana-enters-shows-aim-to-host-indias-largest-podcast-library-by-fy21-end/

2.https://www.marketing-interactive.com/wesing-empowers-the-philippines-with-immersive-experience-in-music-and-beyond/

3.https://www.musicbusinessworldwide.com/tencent-isnt-making-3bn-investment-in-universal-by-itself-report/

4.https://www.theverge.com/2019/11/4/20948731/tiktok-bytedance-china-social-media-growth-users-decline-first-time

5.https://techcrunch.com/2018/02/27/gaana-raises-115m-led-by-tencent/

6.https://kr-asia.com/spotify-facing-growth-issue-in-asia-where-tencents-joox-is-more-popular

7.https://www.musicbusinessworldwide.com/sony-inks-major-licensing-deal-in-africa-with-boomplay-and-its-60m-users/

8.https://techcrunch.com/2019/04/05/boomplay-a-spotify-style-music-and-video-streaming-service-for-african-music-and-africa-raises-20m/

9.https://www.synchtank.com/blog/africas-perfect-storm-for-the-music-business-is-coming/

10.https://www.ft.com/content/463e2b04-dfbe-11e8-a6e5-792428919cee

11.https://theconversation.com/how-african-countries-are-doing-in-ballooning-digital-music-revenues-116093

Typesetting | Anlin

Original title: "China Internet giants are stirring the global music market"

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