Music + Video
Back when MP3 and ringtone were still cool, people consume music by itself, on the go. Now with the increased ownership of smartphones and 4G data, “music + video” is starting to takeover music consumption. This trend first started to show in long videos. YouTube videos of more than 1 billion views are mostly music videos.
The musicians who joined the short video game early are all breaking out of their fanbase and enjoying great success in the mainstream music market. The visualization of music makes musicians more like idols and music fans more like Kpop fans. Tik Tok celebrity Liu Yuning has 32 million followers and 240 likes on Tik Tok. Among QQ Music’s top 5 songs by the number of times played in the first half of 2019 list, only one song is the work of a mainstream singer debuted through an entertainment agency. Tik Tok’s “See Music” program has helped many internet singers break into mainstream.
∧Top 4 contestants of Tik Tik’s “See Music” competition (graph created by Meridian Capital China)
As for television, music variety shows are still the main focus of traditional tv channels as well as video streaming platforms. Participating in Music variety shows is still one of the most effective ways for musicians to gain traction. Many music variety show production teams also started to set up official Tik Tok accounts to achieve better reach. The impact of short videos on the entire music content ecosystem is beyond just the expansion of reach, but also the codependency between musicians, audiences and consumer brands.
Music + Social Media
Music, as an art category, inherently carries strong values. Users who like the same type of music tend to have similar values and aesthetics, which forms a firm basis for a vibrant community.
For example, traditional rock music often expresses a lot of anger, the listeners place more emphasis on the philosophical and social message of the music more than the music itself; and hip hop music is a more direct expression, which bluntly conveys the desire for sex, status, and money.
Social media startups catering to the business side of the music industry have not been very successful because of the limited amount of businesses in this industry. But the consumer-facing side of music social media is booming. Music streaming platforms can now encourage you to karaoke the song you’re currently listening to, compete for best singers in your friend group, buy virtual gifts to support your friends’ cover songs, watch the live streaming celebrities sing the songs you like on webcam, let you directly message your fellow music lovers, or redirects you to funny short videos using your favorite music as BGM. While all big music streaming services have social features, NetEase Cloud Music is the best at it. NetEase has positioned itself as a “mobile music community” since its inception. 83.5% of its users are under the age of 25, most of them highly educated.
The gamification of music is also growing. There is no doubt that combinations of music and social media will be a big part of the future.
Music + Live
China’s live entertainment market has huge potential. Japanese’s leading music festival brand Summer Sonic holds three-day music festivals in Tokyo and Osaka every August. Assuming an average ticket price at 1,000 RMB each, the festival could bring in an estimated box office of 300 million RMB in three days, which roughly equals to what China’s leading concert promoter’s revenue in a full year. Japan has become the world’s second-largest live entertainment market with a total size of around 345 billion yen (22.9 billion RMB) in 2018. And China’s live entertainment market was only 4.9 billion RMB that year. Taking into account the difference in population, we merely scratched the surface of this vast market. However, in the first half of 2019, live music entertainment sector is shrinking, due to music festival brands scaling back after realizing the market is over-hyped, cooling economy reducing sponsorship money, and government regulations. However, this is a sign that the market is becoming more efficient and mature. There are many reasons to be optimistic about the music festival market in China:
Music + Tourism has become a new way for small cities to promote themselves. But how to make festival-goers come back and spend money outside of the festival remain major challenges.
Surprisingly, due to the opera/musical singer competition variety show Super-Vocal going viral last year, the musical market blew up. French musical Notre Dame de Paris put on 68 shows in 5 cities in 2019 and became a phenomenon. However, live music industry in China is still in its infancy comparing to many developed countries.
Music + Consumer Product
2017, 2018 and the first half of 2019 produced 17, 22 and 25 consumer brand promotional singles respectively. Short video apps are collaborating with musicians to custom make short advertisements that spread quickly. During the summer of 2019, Wong Lo Kat, a popular Chinese herbal tea brand, launched a joint songwriting competition with Tik Tok. 5,024 musicians contributed 12,812 songs that were streamed almost 100 million times total. Hip hop is arguably the most effective genre to move merchandise sales.
In America, hip hop artists like Kanye West shook the market with the successes of their personal fashion brands. In China, we see similar effects. The Rap of China star GAI sent Chinese brand SMELT Studio trending on Weibo by performing in an ancient Chinese style hoodie from the brand. Another rap star Bridge wore a piece from RetroVegas, another Chinese brand, and the piece sold out immediately.
Music + Technology
Music is a form of art that can be enjoyed on a number of devices in a wide range of settings and at a low cost, which enables tech companies to get very creative.
On the hardware side, smart speakers and smartwatches for children are gaining market share, automobile companies are joining the race as well. Out of the top 10 car brands in China, 8 of them are already providing in-car streaming services in partnership with Tencent Music Entertainment.
In the near future with 5G technology, we will be able to consume music in higher quality and bigger quantity, which would, in turn, nurture Hi-Res, DSD and HiFi content, AI playlists and on-the-go technology.
Moreover, algorithms and the increasingly massive amount of data enables smart music royalties. We might soon be trading songs like stocks.
This article is translated and reposted from an article on Meridian Capital China’s Wechat official account written by Ma He and He Lixin.
Recently, a group of Chinese companies that went public abroad, include Bilibili (BILI. NASDAQ), Tencent Music Entertainment (TME.标签：financing, stocks, tme 2021-01-25
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