China's 2012 Online Music Market Revenues Up 379% YoY
Guangming Daily, 5/14/13
China's Ministry of Culture (MoC) recently released its 2012 Report on the Chinese Online Music Market, which found that there were 575 registered companies working in China's online music market as of the end of 2012, a 27.2% increase YoY. While free music continues to make up the bulk of online music, online music service providers had 2012 revenues of RMB 1.82 bln from online listening services (including online live performances), a 379% increase YoY from 2011. The total number of online music users also jumped to 436 mln, a penetration rate of 77.3% of total Internet users, reflecting a 13% increase in users from 2011. The increasing popularity of mobile devices drove an increase in the number of wireless music subscribers, which reached nearly 750 mln by the end of the year, generating revenues (including content provider revenues) of RMB 2.72 bln, up 13.3% YoY.
The Report noted that the bulk of China's online music market uses a "free services + ad revenues" profit model, reflecting the continued failure to develop new corporate profit models. The Report noted a lack of trust, transparency, and regulated billing and accounting platforms between copyright holders and channels. The industry's lack of effective allocation mechanisms has resulted in difficulties in achieving a fair distribution of profits, as copyright holders and channels typically prefer to base partnerships on lump licensing fee payments. The absence of mature business models leaves companies at a disadvantage in their efforts to achieve large-scale profits, leading to a lack of interest on the part of investors given the industry's relatively long payback period.
Keywords: national statistics Internet users online music Ministry of Culture revenue business model market size growth rate
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