MBW’s Stat Of The Week is a series in which we show why a single data point deserves the attention of the global music industry. Stat Of the Week is supported by Five Music Group, a technology-driven record, distribution and rights management company.
Regular readers of MBW will be well aware of the growing market for independent artists and DIY enthusiasts.
Astonishing recent statistics on this include the fact that TuneCore now pays more than $ 400 million a year to independent artists, having distributed the music of over a million independent artists to date.
Meanwhile, TuneCore rival CD Baby recently confirmed that in the second quarter of this year it had some 950,000 active distribution customers on its DIY platform.
According to Midia Research, the self-taught artist sector generated $ 873 million in 2019 – enough to claim a 4.1% market share of the global recorded music industry.
With all of this in mind, China is becoming a particularly attractive hotspot for the DIY artist market – with the territory’s two largest streaming platform operators, Tencent Music Entertainment (TME) and NetEase Cloud Music, looking to supremacy.
In July, Tencent Music revealed it had paid 590 million yuan (more $ 84 million) to date to independent artists using its “Tencent Musician” program.
Launched three years ago, Tencent Musician enables emerging independent artists to upload their music to TME platforms, as well as offering them, among other services, music publishing, marketing, copyright management and professional training.
Last Tuesday (November 10), Tencent Music CEO Cussion Pang revealed how beneficial these independent artists are to Tencent’s platforms.
“We have seen the number of independent musicians exclusive to [TME platforms in Q3] more than 20-fold increase from a year ago, thanks to a series of financial incentives and technology-based support services. “
Cussion Pang, Tencent Music (speaking last week)
Speaking on Tencent Music’s third quarter results, Pang told analysts that TME is directing “more resources to support independent musicians and promote original music.”
He added, “We continue to see triple-digit year-over-year growth in the number of independent musicians participating on the platform and the number of original songs uploaded to it.”
Importantly, Pang further revealed, “We have seen the number of independent musicians exclusive to [TME platforms in Q3] more than 20-fold increase from a year ago, thanks to a series of financial incentives and technology-based support services. “
The fact that Tencent Music offers independent artists “financial incentives” is obviously interesting. The word “exclusive” is even more interesting.
Thanks to local anti-competitive crackdowns, Tencent Music is no longer able to exclusively license (and then sub-license) content in China from Universal Music Group.
It seems that TME is still infatuated with the idea of exclusivity – but has shifted its focus away from this area of record labels to the independent artist market.
MBW’s Stat Of The Week: Tencent Music has experienced “triple-digit year-over-year growth” in the number of independent artists on its platforms; Rival NetEase Cloud Music saw the total number of independent artists on its service double to 200,000 in the 12 months leading up to October 2020.
Tencent Music’s biggest rival in China, NetEase Cloud Music, is also seeing an explosion in activity around independent artists – with its own rival programs in place to support their work.
NetEase’s Project Cloud Ladder, for example, is dubbed by the company “an initiative to encourage independent musicians to create better music.”
What does this imply?
Well, we know that the services NetEase Cloud Music provides for independent artists can go way beyond your typical DIY distribution offering.
“NetEase [is] strengthen our support and investment in independent musicians [via] dedicated teams of professional songwriters, composers, producers as well as other resources such as AI technology and marketing solutions. “
William Ding, NetEase (speaking last week)
NetEase (the parent company of NetEase Cloud Music) released its third quarter results on Wednesday, November 19. Company CEO William Ding later spoke specifically about the importance of courting independent artists during a call with analysts.
Said Ding: “NetEase continues to showcase our original music library by increasing our support and investment in independent musicians. [via] dedicated teams of professional songwriters, composers, producers as well as other resources such as AI technology and marketing solutions. “
The idea that NetEase can help independent artists “create better music” is not just marketing talk, then: the platform literally connects the cream of the Chinese independent artist community with songwriters and songwriters. successful producers, in order to produce professional-level Material.
If NetEase Cloud Music were a record label or a music publisher, it might be called A&R.
According to recent statistics released by NetEase, as of October 2020, NetEase Cloud Music was home to the music of more than 200,000 Chinese independent musicians, which represented 100% annual growth in volume.
A report from NetEase on its work with independent artists, released on November 6, suggests that, as of 2016, the platform only hosted music from 20,000 independent artists.
“Online music platforms have greatly influenced the model of music distribution in China and have given more musicians the chance to shine and prosper in the industry,” NetEase said in a statement. accompanying the report.
In addition to revealing internal statistics for NetEase Cloud Music, this report polled 11,857 independent artists to determine how they performed on the platform in 2020.
He concluded that, since 2017, more than 40% of independent musicians in China had experienced “clear growth in their income.”
NetEase added that the total income of independent artists participating in its Project Cloud Ladder exceeded 100 million RMB (approximately $ 15 million) in the first 10 months of 2020.
So it looks like a heated brawl is breaking out between Tencent Music and NetEase Cloud Music to become the preferred home for independent artists in China – with significant business benefits awaiting the winner.
William Ding was asked about NetEase Cloud Music’s rivalry with Tencent Music during NetEase’s third quarter earnings call, and used the question to reiterate the importance of independent musicians to his company’s prospects.
“We are very confident and ambitious that NetEase Cloud Music will hold a leading market share in the future,” said Ding.
“The way for us to [achieve that leading market share] is of [place] emphasis on original and organic music … [while], at the same time, providing resources to support and encourage independent Chinese musicians to increasingly provide high-quality music content, thereby creating a healthy cycle organically.
“NetEase’s efforts to help independent musicians be heard and appreciated gives us a competitive advantage.”
NetEase Company Statement
In a company statement given to MBW earlier this month in conjunction with its freelance artist report, NetEase Cloud Music spoke of its “mission to help tens of thousands of talented Chinese independent musicians create content. native who resonates with local listeners ”.
He added, “NetEase’s efforts to help independent musicians be heard and appreciated gives us a competitive advantage.
“In this way, fostering the growth of independent music both opens up a larger market for musicians and introduces original and diverse content to our users, which contributes to sustainable growth.
According to Tencent Music’s latest quarterly results, the company closed the third quarter of 2020 with 646 million monthly active mobile users of its online music services.
As it has been doing for some time, NetEase said in its third quarter results that NetEase Cloud Music has over 800 million registered users (although registered doesn’t necessarily mean active).
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