Sound of music set to soar in China with signing of new deal

Landmark agreement seen widening access to works in portfolios of two leading digital platforms

Major Chinese digital music platforms Tencent Music Entertainment and Music.163 have reached a landmark agreement to cross-license their granted copyrights, which could prove a game changer for the music industry.

The accord, reached earlier this month, involves items with exclusive authorization. It will enable the two parties to use at least 99 percent of each other's online music library.

They have also decided on long-term cooperation in music copyright, and agreed to open their copyright access to other portals.

Critics applauded the move, which they said was conducive to the wider access and promotion of authorized works of music generally, giving a boost to the industry's sustained growth.

"The collaboration between them signals music copyright transactions will be conducted in a healthier, well-organized and more rational way," Xiong Hui, an analyst with internet data research company iResearch, told Beijing-based newspaper Science and Technology Daily.

TME, a subsidiary of China's internet giant Tencent, and Music.163, the music arm of leading Chinese internet company NetEase, were involved in a fractious saga of copyright disputes for years.

The latest episode took place in 2017, when TME filed copyright complaints against Music.163 with a Shenzhen court. Music.163 then had to apologize to its users for the inconvenience, as many items on its music list were unable to be accessed.

The National Copyright Administration mediated the current settlement.

Xiong said that the deal won't affect their user base, with neither a major increase or reduction expected.

The growth in mobile music user numbers has dropped and many users have downloaded multiple apps. Their inclinations for digital entertainment have tended to be fixed, he added.

In the current industry environment and development pattern, online music portals are facing the challenge of how to maintain existing membership and attract new users, the analyst noted.

As a result, they needed to continue leveraging their current resources to retain user bases and, on the other hand, expand their offline business to explore new channels, Xiong added.

The latest data released by the China Internet Network Information Center at the end of January showed online music users numbered 548 million in December, nearly 45 million more than that for the same month a year earlier.

The report found that roughly 68 percent of smartphone users wanted to enjoy online music via their devices.

Copyright remains the focus of competition in the industry in the long run, according to the report.

How to profit from the online music business is a common issue facing portals, either in China or abroad, Xiong said, adding that currently, the majority of them are unprofitable.

Chinese consumers are increasingly used to paying for high-quality digital music and are keen on socializing on online music communities, he said.

Another report on China's digital music, released by iResearch in early February, showed that digital music generated 3.19 billion yuan ($504 million) in revenue last year, far eclipsing the 120 million yuan earned in 2012.

Since the NCA launched a campaign focusing on fighting online music piracy in 2015, major portals have poured heavy amounts of money into securing copyrighted works.

In 2005, the copyright administration - in cooperation with intellectual property-related central government departments - initiated the Operation Jianwang. It cracked down on pirated digital products, including music, books, videos, games, animation works and software.

According to government data, enforcement officials investigated more than 22,560 infringements nationally and shut down over 3,900 illegal websites in the past five years.

wangxin@chinadaily.com.cn

(China Daily 03/01/2018 page17)