Taylor Swift may be setting a new standard for China's digital music industry with her new album "Midnights".
Within a day of its release, the album has racked up over 200,000 copies on Q Q Music, one of the largest music streaming platforms in China. While $4.83 doesn't seem like much, it's the highest price ever set for digital albums in the market, which may indicate two things: the upstream cost of making albums has risen, or Chinese users are
The Chinese digital music industry is different from the Western one. Music piracy was rampant for a long time, so streaming platforms like QQ came up with a variety of perks to get people to pay. A lot of QQ Music's paid users are signed up for bundle deals that give them access to other Tencent-affiliated products. Hi-fi streaming, access to online concerts, and custom app layout are just some of the value-added services that subscribers get.
It is difficult to say if the $4.83 pricing is the new norm or just a reflection of the fans in China. The American artist is one of the few foreign celebrities who have a large following on Weibo. Only Jay Chou, the mandopop king whose songs are known to everyone from my generation, has matched Swift's pricing power.
After Beijing cracked down on internet monopolies, the bargaining power of Tencent may have been weakened. For a long time, the firm's music arm bled money on securing exclusive rights from UMG, Warner Music, and Sony Music Entertainment. That isn't the case anymore. NetEase Cloud Music is one of the places where Swift's latest digital release can be found.
The good news is that more and more people are paying for the services. A total of 593 million people use these services every month, meaning only a small percentage of them are paying. In the second quarter of the year, 42% of the users of the platform were premium subscribers.
There is a more profitable product that is available on the platform. Premium average revenue per user (PRAU) from Q2 was 4.54 ($4.48), which is less than the average revenue per user from the first two quarters of the year. The average revenue per paying user was over a dollar.
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