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Why vertical electronic music platforms are doomed to failure ? In 2016, "Electronic Music" has become a hot topic and non-neglectable trend in China. What are odds of creating an electronic music platform in China Mainland?

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董 露茜 2017-01-25 Collect Review (466)

In 2016, “Electronic Music” has become a hot topic and non-neglectable trend in China. What are odds of creating an electronic music platform in China Mainland?

In abroad, there are not only dance music digital stores such as Beatport, but also To-B and To-C platforms such as Mixcloud. Thus, localized vertical streaming media platforms, targeting on Chinese young electronic music fans, seem to make sense.

With a rapid growth of the mobile Internet market, the popularity of smart phones, the gradual development of China’s music industry and the upgrading of people’s consumption level, China mobile digital music market in recent years has presented frequent success.

According to the annual comprehensive report from Analysys, China mobile digital music market in 2015 got total revenue of 6.14 billion yuan, representing a 42.5% increase than that in 2014. The number is expected to reach overall 8.68 billion yuan in 2016.

Statista forecasted that in line with the development of foreign digital music, the number of users to use digital music streaming service in China during 2015-2020 will soar from 483 million to 613 million, while the number of users to download will remain around 142 million to 159 million.

IMS Summit reported that electronic music market scale in Asia has reached more than $1 billion, mostly relying on the content interaction among mobile terminals. The core consumer groups for electronic music consists of 15 to 24-year-old youths, this amount in China is currently 189 million (in the United States the number is only 45 million). And it can be expected that in near future, China will have more than 300 million people to become direct or indirect audience of electronic music, receive relevant information and participate in online/offline electronic music activities. It is foreseeable that the vertical music specific market and professional users will be the new battlefield for players from all parts of music industry.

However, we also see that many users haven’t put electronic music as a big part of their cost in music yet. And the definitions of user groups still vary according to different genres of electronic music. What we can be sure is that at current stage, it’s hard to find a platform like Mixcloud (to upload music in front of the DJ and share with C-end users) or Beatport (a dance music digital store without uploading access) in China.

So, does it work if China Mainland copy foreign electronic music platform directly? The answer is a big “No”. Foreign electronic music platforms must conquer many pain points to safely land in China.

First of all, the domestic music library of Apple Music performs no better than other platforms in China, due to the instability of the external network and its unsuitable full payment model. The free + pay model of Spotify is relatively easier to implement, but unsatisfactory communication between the domestic and international social media might lead to higher cost for foreign company to build up a comprehensive transplant in China. Thus, overseas platforms can hardly take root here.

In addition, many domestic users haven’t completely given up the habits to download or offline music. Domestic platforms for integrated download / off-line and cloud storage provide limited space for Spotify and other foreign platforms with cloud advantages. The latter even haven’t taken into consider about the domestic cellphone data fee. Though Apple Music China only takes 10 yuan per month, apparently domestic platforms are still more attractive to users with monthly data for free.

Compared with overseas peers, domestic music online platforms have less absolute users but faster growth. The rise of electronic music festivals and various offline parties in recent years help users develop into being a non-ignorable player among Chinese music production and consumer groups. The number of song lists of all kinds of electronic music platforms keeps climbing, and the social function of them provides venues for party animals.

Apparently, a platform based on Internet enterprise capital can obtain more resources in acquiring music copyrights and contents than those without that background, electronic music users in niche & specific areas can enjoy more in vertical platforms. Therefore, vertical platforms are able to possess fewer but more active users.

On the other hand, for those musician users who also compose and make music, specialized electronic music platforms would help on the recognition of their work, and comprehensive platforms with social gene would spread their pieces much further. But currently there isn’t a mature platform in China to meet their professional needs. From a macro perspective, the booming on the electronic music market might not be able to arouse the interests of not-in-depth users to specific electronic music (such as EDM) platforms.

The reasons are in the following:

Firstly, libraries of electronic-music-focused platforms coincided with existing domestic mainstream music platforms, and were short of supports from other types of music libraries. Nobody would just listen to electronic music, which means general public may not have the initiatives to download specific electronic music streaming media. Amateur electronic music enthusiasts have lower loyalty to vertical platforms and are easy to be snatched by platforms of other types of music.

Secondly, to professional and in-depth users, vertical streaming media are more difficult to generate adsorption capacity. They are willing to use more troublesome ways and pay more to apply a more generic international platform. Many users would rather present, share or purchase for music contents on international professional platforms such as SoundCloud and Beatport. Domestic integrated platforms have become the places to gather users almost just for fun.

Thirdly, a streaming platform focusing on certain types of music is often created by a professional company with obvious advantages on industry experiences and resources. Yet those can be the biggest limitation, especially when competing with integrated internet platforms. Trapped in financial or technical talents problems, its user experience will be weaker than that of integrated platforms generally.

Fourthly, from a product design point of view, current vertical streaming platforms are lack of the important social and speak sections. The 189 million youths have a very important feature to look for the identity of similarity through the Internet. That is why they care more about whether they can speak and listen to others on the platform.

China’s internet censorship is a major flaw for international music platforms. Due to the attention and rigidity on copyrights of international platforms and the policy control, they destined to fail to compete with local players. Hence, coming across such a fragmented international music platform and perishing localization situation, some users who originally had expectations will continue to use international version or local download, while others may choose domestic streaming media.

From the reviews of NetEase Cloud and Xiami Music, as well as the barrage listening model of Echo, we can see that major platforms are aware of the importance of sociality – and this is related to the one-child policy of the generation post 90s and 00s, whose growth were full of loneliness and lack of communication. Meanwhile, we should not neglect some essential hidden platforms. The most representative case is Bilibili, where many young users indulged themselves.

Barrage originated from the Japanese video site Niconico. Bilibili took this approach and reached great success domestically success. We can find an interesting phenomenon that the uploaders of Bilibili have the capacity to introduce users to the major mainstream music platforms after their music or original music videos become hit. Marking massages like “xxx sightseeing group” will appear below the corresponding songs (domestically this way can be traced back to Tianya BBS and Douban group). We believe that any phenomenon of the internet cannot be a separate analysis because of the great correlation. Virus-borne incidents on the internet are also grasped by a group of youth who have profound understanding of the Internet and good sense of the network.

At the same time, professional users are usually not limited to “electronic music”. The deeper they understand about music, the more interests they will have on tracing origin styles like jazz and classics. These users would rather take the initiative to find their favorite music and keep their own channels and systems, without pursuing public fashion. Some channels are even very niche or illegal to share only within in an extremely closed network.

On the other hand, pan-entertainment users with pursuit of the trend will not be confined to a certain type of music, even for the current EDM users. More media-orientation and less music loyalty made the in-depth users treat EDM as just a fashion but not a long-term tendency. For EDM users, what they really want is actually a kind of life style and status which generate from the media and the public. Music would never be the consumption core, but only one factor. Their loyalty located in a comprehensive experience of dance, wine, venues, connections and others. At there, the important thing is not DJ’s music, but the DJ themselves. Many nightclub bosses are willing to pay a lot for the Top 100 DJs, because these “EDM ICONs” can help create the “ecology” for consumers.

From a current point of view, the integrated music platform has more advantages on user training. The developing Chinese electronic music users still demands for more time to build up the domestic platform. It would be fair to say a domestic vertical platform is easier to “come out on top”. In the mobile internet era where scenes are extremely segmented, to accurately attract fans seems simple, but to do large-scale users not.

CMBN made a reorganization and overview of some domestic mainstream and professional music platforms, as follows:

NetEase Cloud Music: Electronic music users present higher vitality

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As one of the fastest growing professional music platforms in China, NetEase Cloud Music has got a valuation of 80 billion yuan, over 200 million users and more than 20,000 active musicians within 3 years, and ranked pretty well in all kinds of mobile music market reports in 2015. Without public disclosure of the exact number, Cloud Music’s paid subscribers rose more than 300% to estimatedly more than 1 million, according to its user big data report in the first half of the year.

Compared to other domestic music platforms, NetEase Cloud Music created representative UI designs and user experience, as its interface abandoned the complex layouts of the old veteran player platforms, and inherited and localized the simple & convenient functions of Spotify.

Avoid of the incompatibility between foreign vertical commercial music and the local original music, Cloud provides users with more comprehensive content channels and a more successful social sector, where comments as another index can reflect the popularity. Alan Walker’s “Faded” took the 3rd place on the list of the hottest songs with most comments, proving that electronic music users are the most active ones on NetEase Cloud.

Its data showed that electronic music took No.2 on the client preference ranking, and accounted for 20.44% of the total number of users. More than 20% of the users in 11 provinces have preference to electronic music, mainly in the northwest and southern regions, of which Guangdong performed best.

Xiami Music: How to improve endurance?

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 As a veteran professional music platform, Xiami Music accumulated many outstanding original music works and songs of various detailed types, such as hip-hop, electronic and experimental.

Compared with the existing platforms which provide mainstream music services, Xiami has won a high reputation among the majority of professional users. In glorious moments it witnessed many niche music fans were exploring excellent works through. In a certain period, to some extend Xiami comments could be the substitutes for those on Douban.

Since the beginning of “Sword Internet Action” in 2013, the wave of legalization lasted until today. After the legalization last year, Ali Music welcomed a tortuous development when Xiami Music was also quite perplexed with the resign of the original founder WANG Hao. Thus, lots of music users transferred to other platforms.

However, Ali Music changed a lot on personnel so that Hao returned to Xiami and Ali Planet also announced to suspend services. Whether Xiami Music will promote electronic music still needs to wait and see.

QQ Music, Kuwo, Kugou, Baidu: Rooted in the mass market

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Undoubtedly, QQ Music, Kuwo and Kugou Player rank top 3 on in the Chinese music market, and have obtained deeper penetration and longer using time than the “small but beautiful” NetEase Cloud Music or Xiami, towards the mainstream music market and the vast majority of ordinary users.

The biggest news of digital music in this year is a new music group was born after the combination of QQ Music and Ocean Music. With strong copyright resources and the wide coverage of music contents, the 3 biggest platforms have much greater payment conversion rate because of the higher consumption willingness of the mainstream music users.

WANG Lei, the general manager of Taihe Baidu Music, appeared on the IMS Electronic Music Forum last October, and told CMBN in the next they will go in-depth on operating segmented music contents, such as electronic or ancientry music.

In fact, due to the different music preferences, professional electronic music users have low acceptance to electronic songs or genres on the mainstream platforms, and even stand against them for their misleading effect. Nevertheless, these platforms are the right places for some grounded musicians like WANG Yilong, a controversial DJ who has obtained very high popularity but weak respect, famous as “Vulgar High.” He said in an interview of JUMP_Media that his income from the internet hits is pretty enough to buy a car and a house in Beijing. Another example is Phoenix Legend, whose dance music with electronic elements has impressive spread, such as the song of “Above the Moon” and “The Hottest Ethnic Trend”. This year they even joined the EDM show “The Remix” as the mentors.

Echo: New platform for users post 95s

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Compared to Ali Music, the three major platforms and NetEase Cloud Music, Echo got a valuation of about 10 billion yuan and 20 million active users, composited by the 1995ers in Tier 1 or 2 cities.

Echo attracts young users to develop a new type of niche music circle. Users of ACGN music and electronic music take a not small proportion on Echo and monthly income from them accounts more than millions. With an introduction of sociality, barrage is one of Echo’s shining points. The more time users are willing to spend on the platform will increase their possibility to pay. More and more fans are interested in interacting through the barrage.

Because of age restrictions, the existing mature electronic music users will not settle down on Echo and most of them are young. The weak development of niche culture may not bring Echo a promising future and too small user scale will end in highly overlapped user types, for ACGN and electronic music fans may be the same ones. Moreover, current entered musicians on Echo are mostly popular music-oriented.

Recently, Echo announced the establishment of its electronic music label-Seamount Electro, to provide contracted electronic musicians free recording studios, line performance support, personal packaging agency and other services. Besides, Live House M64 opened in Shanghai and also invited well-known DJ to reside.

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PYRO: How do the foreigners make localization?

PYRO Music, an electronic music platform which released a beta version online on October 23, 2015, was founded by Spencer Tarring from UK, who has been a DJ and music director of Shanghai M1NT Club for 6 years. It began formally online in 2016 after receiving great support from many investors including HU Haiquan, and stayed open to more than 1,000 DJs and musicians in major cities.

DJs around the world can upload and share their work on the PYRO music platform. Users can also track and subscribe their favorite musicians and electronic music labels, as well as the information of local live performances.

In addition, PYRO Music remains healthy co-operation relationships with a number of record companies, such as Spinnin, Anjuona, Reveald and Toolroom, etc. DJs are able to access to those companies or lables after getting certification for more performance opportunities. PYRO has attracted a lot of domestic EDM users and professional musicians.

However, as a localized platform in China, PRYO music keeps an entire English interface, which leads to a lot of criticism. The reason may be to help foreign DJs on better contact of live performances and deeper understanding of local condition in China. But the limitation on English of many domestic users and DJs results in unsmooth user experiences.

Although Spencer expected the size of users to exceed 20 million, the lack of localization may be a significant impediment and limitation as said above. Then, how to deal with the copyright upload?

The new version of PYRO comparably has extended into the deeper underground dance music contents, and started to update the localized activities and information. Indeed, the current idea is much more clarified than before. Actually, what it really wants are the users with consumptions on dance music and club culture. These users have their own channels and how to concentrate all the scattered channels to a single platform? Other than that, the core problem may also be how large is this group of users is and how to grasp tens of millions of fans by the vertical contents alone.

Boombox Music: Specialized but failed to jump out

Boombox Music, created in 2013 by NI Bing, the general manager of Drum Rider Records, is a music platform for real-time push according to different time and places with professional DJ teams and rich electronic music resources.

The platform abandoned the traditional playlists and applied the Set model suitable to DJ’s habits. It schedules the theme and each of the songs represents a coherent piece of music for 30 to 90 minutes. Thus, it becomes actually a Remix made by a professional DJ in accordance with his own understanding. This form of propositional writing allows users to get a different perception experience.

However, due to the immature market a few years ago and the lack of clear profitability models, Boombox didn’t get the outstanding capacity under the rise of other platforms, despite of its good reputation among the underground electronic music circle and several professional users. Unfortunately, it has already been withdrawn in major application stores and its official website also stopped the updates.

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Dianyintai: Newly born without sense of existence yet

As the information platform of A2STORM, the organizer A2LiVE went online an APP called Dianyintai in early December, 2015. So called as “China’s first electronic music fans platform “, it only applies to iOS system now.

Data showed that Dianyintai hopes to follow the logic of fans social networking platforms in the mainstream entertainment circle. Starting from fans’ music life needs, it invites professional musicians to customize song lists on different scenes in addition to push electronic music or activities information, which offers the possibility to share songs and chat online with friends at the same time. Yet the current online version of Dianyintai is more like a radio station to make playlists according to the scenes. Its user experience is somehow primary and can only be shared through Wechat.

As one of China’s first successful electronic music performing company, A2LiVE has gained massive copyright resources and users on their own platform. Boombox was born at the wrong time, and whether Dianyintai can cover enough users is not yet known. Without developing a mature community for fans, it may become just a platform for dissemination of the company’s activities and information.

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