China’s music market has “enormous untapped potential”

As Australian tour promoters and the global music industry show a keener interest in the Chinese music market, two studies released this week provided a greater understanding. A figure to be amped about: China’s music spending is estimated to be the equivalent of Australian $79.5 trillion over the next decade.

That’s from Nielsen’s first Music 360 China report. It revealed that this spend would be fuelled mostly by young, affluent, connected consumers with disposable incomes. A study of 2,031 fans last month found that 83% of the most affluent consumers are music fans. The figure drops to 53% with lower incomes.

“China’s growing number of connected consumers and affluent millennials means big potential for global marketers,” reported Erin Crawford, Nielsen’s SVP Entertainment/GM Music. “Our Music 360 China report shows that music is a real point of passion for consumers, and provides critical insights for companies looking to engage with music fans in China.”

Over 977 million Chinese listen to music each week, which is 72% of the population. It’s 91% in the US, 90% in Australia and 85.5% in the UK.

On average the Chinese enjoy 16 hours of music each week. 66% of music listeners use a streaming service, a figure that rises to 71% for the most affluent.

Despite a growing preference for English-language pop, the figure is still only 33%. 90% prefer Mandarin-language music, and 40% Cantonese-language.

The well-off spend an average of 914 yuan (A$197.50) on music a year; while poorer Chinese consumers spend 118 yuan ($25.60). Australian figures from seven years ago put our annual spend on music at $380 per household, totalling $2 billion.

But the Chinese live music scene has greater support: 57% of affluent fans attend concerts (compared to 51% in the US. with a 42 million attendance at gigs in Australia per year). The wealthier concert-goer prefers western music, and is partial to pop, rock and jazz.

CD sales are still almost twice as much as for digital. But that is expected to change rapidly. Currently, according to Nielsen, China’s online user base is 650 million, with more licensed digital music services being set up.

But, according to the second report, from the China Internet Network Information Center (CNNIC), internet penetration is now 50.3%. That translates to 688 million, which is virtually double that of the U.S. population. (Australia’s internet penetration was 60.5% last March).

Internet take-up is rapid in China. In 2015, an additional 6.1% (or 39.51 million) came on-line for the first time. 71.5% of these were via smartphones. CNNIC estimates that in 2016, the size of China’s internet users will grow by 3.8% rise to 700.1 million. Mobile phone users will grow more rapidly, up 5% to 618.7 million.

There are still significant challenges for foreigners trying to enter the Chinese music market. Piracy is a problem: just 8% are “very likely” to pay for a streaming service (3% for lower incomes) and only 32% would be “somewhat likely”. Even worse, 72% complained of instances where they could not find the record they wanted on their services, forcing them to non-legal sites.

The Ministry of Culture insists that streaming services must monitor their content. Western and Australian bands had to submit their lyrics first. The likes of Bon Jovi and Maroon 5 had their visas cancelled, for their stance on the Tibet issue or for tweets interpreted as hostile to Chinese sensitivities.

A combination of the exuberance of the Chinese live scene and lesser ticket sales from western economies have drawn more interest from Australian acts and promoters to a country that once banned foreign music

In recent years, Australian acts who’ve toured the Sacred Earth included Sophie Koh, Clowns, Luca Brasi, Nik Phillips, Royales, The Vasco Era, Elliot The Bull and The Smith Street Band. Melbourne-based singer songwriter Koh said that despite the fact she was unknown in China, crowds came out for each of her 14 shows “up for it right from the start, singing and dancing.”

In the future, the Adelaide International Guitar Festival will be held in Shanghai, exposing a number of Australian players there.

It’s long way from when John Farnham’s tour of China in the 1980s was part paid for in rice, and attendees of the first MIDEM Hong Kong were advised that those entering the market should find a local partner with gangster connections to “solve” whatever problems arose during a tour or record release or video shoot.