Tencent Music’s Paying ratio increased to 9.9%, up from 8.0% and 9.0% in the third and fourth quarters of 2020, respectively. Its mobile MAU for online music platforms saw a decrease of 6.4% YoY in Q1 2021 to 615 million.

Tencent Music upgraded its products to be more social, personalized, and visually appealing during the first quarter of 2021:

• Putong Community has continued to gain popularity, growing in user penetration and retention rate quarter-over-quarter, and has become one of the leading channels for fan-idol interaction and content promotion.
• Kugou Fans Club has also drawn many leading artists, labels and content IPs to interact with their fans live, resulting in an increasing proportion of young users in this community, as well as sequential increases in penetration and time spent per user.

For long-form audio, it made noteworthy progress in both integrated and standalone approaches, as well as its monetization during the first quarter of 2021:

• After exceeding 100 million MAUs at the end of 2020, MAU penetration reached 20.0% compared to 5.5% in the first quarter of 2020.
• Significantly enriched long-form audio content offering with the number of licensed titles more than quadrupled year-over-year.
• Accelerated the addition of PUGC and UGC long-form audio content. QQ Music launched the Ground Zero Podcast program, which offers financial resources and tools that enable original podcast content creation.
• In March 2021, it completed the acquisition of Lazy Audio and started consolidation. It also integrated Kuwo Changting with Lazy Audio to form Lanren Changting in April, a new brand for Tencent Music’s long-form audio business
• It recently started its foray into ad-based monetization giving users easy access to a vast amount of high-quality audio content.

China online entertainment market overview 2021

Financial Highlights

Total revenues were RMB7.82 billion (US$1.19 billion), representing an increase of 24.0% year-over-year.

• Online music services revenues grew by 34.5% year-over-year.
• Revenues from music subscriptions were RMB1.69 billion (US$258 million), representing 40.2% year-over-year growth.
• Revenues from advertising services recorded over 100% year-over-year growth.

Net profit was RMB979 million (US$149 million) and net profit attributable to equity holders was RMB926 million (US$141 million). Non-IFRS net profit was RMB1.24 billion (US$188 million) and Non-IFRS net profit attributable to equity holders was RMB1.18 billion (US$180 million).

Online pan-entertainment market refers to online music, e-books, and online videos. The revenues of the online pan-entertainment market in China are derived primarily from paid users.

The Latest Data on China Online Entertainment Market

Comparing with online music and e-book, online video had the largest user base. The daily active users of online video reached 940 million, up by 11.9% from the same period last year.

Online payment had 570 million active users.

Online music users have a stronger willingness to pay for copyrighted music than online video users.

As of 2017, the revenues of online video reached 57.56 billion. Online music also shows a high growth trend with revenues up from only 7.5 billion in 2015 to 29.23 billion yuan.

Movie, teleplay, and video with ads are three main factors to attract paid users.

Paid users of mobile video apps show higher user stickiness than overall users. The average time spent of paid users on mobile video apps every month is 3.37 times higher than that of overall users.

Young users are more willing to pay for favorite videos.

Users from tier-1 cities have higher purchasing power and are more likely to pay for videos.

Apart from complete leisure time, users mainly use the fragmented time to watch videos. Paid users spend more time on watching videos on weekends than non-paid users.

Within this market, paid users equally open their mobile music apps 326.4 times, 4.73 times higher than that of overall users. Moreover, they equally spend 455.4 minutes on mobile music apps a month.

Male users and users aged under 24 or above 42 all tend to pay for favorite and high-quality music.

Paid users mainly come from tier-1 cities. However, users from tier-4 cities also show higher likeliness to pay for music.

Listening to music can be very relaxing and easy, hence, there are many usage scenarios for people to listen to music.

In order to acquire more literature content and IP, online reading platforms adopt a “revenue-sharing + buy out” model to earn copyright and good authors.

From the perspective of usage count and usage time, paid users of e-book apps show a higher user stickiness than overall users.

Nearly 60% of male users are paid users of e-book apps. Young users are more interested in binge-watching while elder users are more keen on reading.

Unlike users living in tier-1 and tier-2 cities, users from tier-3 and tier-4 cities have more leisure time and they are more interested in reading.

Whitepaper: China Internet Overview

China gaming users continued to grow in 2017, increasing from 417 million to 422 million, but the proportion of internet users who were gamers fell slightly on the back of higher growth in internet penetration, to 56.1% (down 0.9 percentage points).

Mobile gaming gained ground, with the number of users increasing from 352 million to 385 million, and their portion of the total number of internet users rising from 50.6% to 53.3%.

Consumers of cultural products continued their gradual move online, with cultural websites and apps recording 352 million visitors in the first half of 2017, up from 333 million in 2016.

There were a total of 565 million users of video streaming websites in the first half of 2017, an increase of 20.26 million (3.7%) from 2016; 75.2% of internet users streamed video in the first half of 2017.

Chinese audience for online music streaming platforms was similar to that for video, albeit slightly smaller; from last year’s 503 million people, visitors to music streaming sites and apps increased by 21 million to 524 million (69.8% of internet users).

Ride-sharing and mobile taxi reservations saw dramatic growth in the first half of 2017, with user numbers increasing by 53.3 million to reach 278 million.

Download the details in the updated China Internet Insights report here.

Kugou, QQ Music, and Kuwo are the top three online music mobile apps in China by MAU in March 2017. Kugou has close to 229 million monthly active users, closely followed by Tencent’s QQ Music with 211 million MAU.

163 Music (Netease) ranks the fourth, followed by Xiami, Baidu Music, Migu Music, and Alibaba Planet. Alibaba acquired Xiami in 2013 and folded it with another acquired Tiantian into one in 2015. It announced the formation of a division to focus on the music industry in 2015.

China mobile music apps users overview 2016

Kugou Music, QQ Music, Kuwo Music were the top three mobile music apps by total number of downloads in 2016 with 28.4%, 16%, and 13.9% market share respectively.

In 2016, Alibaba merged Xiami music with Tiantian Dongting and launched Alibaba Planet; Tencent merged QQ Music with China Music Group (Kugou Music, Kuwo Music, etc.) and launched Tencent Music Entertainment Grup (“TME”).

China mobile music app users reached 472 million in Q4 2016, an increase of 1.51%. 65.5% mobile music app users prefer listening to the local downloaded music to online streaming music.

Top sources of obtaining music information are search, top music rankings, and browsing by singers. Less than one-third of users discover music through recommended playlist, which indicates potential enhancement of mobile music app algorithms.

Almost 60% China’s mobile app users are willing to pay for online music services with an average monthly spend between 10 and 30 yuan.

Over half users heard of independent musicians in China in 2016; and, 54.5% follows the updates of independent musicians. 85.7% are willing to buy music from them. Different online music platforms launched various plans to cultivate and promote independent musicians.

76.2% China internet users share on social media while 21% only read the shared content and never share, according to a survey by Penguin Intelligence.

Among those who share on China social media, about three-fourths take WeChat Moments as the top social sharing platform.

About 9.6% share no less than 3 posts every day in social media; 23.1% 1-2 posts per day; 47.5% occasionally every week; and, 19.8% share on a monthly basis.

The active sharing users tend to share the same content on multiple social platforms. They love sharing self-shot videos and interact with friends sharing the same interest. In addition, they share more work related content.

50.8% of the respondents often share their emotions and personal status. The second most shared contents are articles (35.4%), followed by comments on events (15.2%) and favorite music (14.1%).

The most likely emotion while sharing on social media is “happy”.  Under being happy emotions, China female users (50.1%) are more likely than male users (39%) to share content on social media.

Read more: 3 out of 5 satisfied Chinese consumers help brands with word-of-mouth advertising

Music consumption behaviors across China vary by income levels and understanding the differences between different city tiers is critical to marketers according to the Nielsen Music 360 report.

72% of the general population in China listens to music for an average of 16 hours per week. The population with the highest average household incomes are the most engaged music listeners, spending more time and more money on music than the rest of the population according to Nielsen.

Tier 1 Chinese consumers, from Beijing, Shanghai and Guangzhou, are 15% more likely to be music listeners than the general population. They spend more time listening to music – 19 hours a week on average – and more of their discretionary income on music. They were also the most likely to listen to English language music, particularly jazz, pop and rock.

57% of tier 1 respondents attend live music events, compared with 51% of the U.S. general population. And, 71% of tier 1 listeners in China listen to an online streaming service in a typical week, in line with 75% of U.S. music listeners.

74% of China’s tier-2 consumers are music listeners and are on par with the national average for listening hours per week.

Tier 3 consumers spend the least amount of time listening to music and allocate the least amount of their total entertainment spending on music; they are nearly as likely to listen on a smartphone as more affluent consumers.

Nielsen suggests that involvement in music-based sponsorships could be a solid way to reach Chinese consumers. Not only are they highly engaged with music, but they are generally favorable when a brand is involved, with the highest net favorability going to promotions that offer free music downloads or sweepstakes.

Also read: 7 Habits of China Online Shoppers

China’s mobile internet users reached 657 million and smartphone users 601 million in Q2 2015 according to iiMedia. Smartphone penetration in China is expected to reach 38.6% by the end of 2015 and mobile apps is becoming an important part of Chinese life.

Nearly 58.7% of the Chinese Android smartphone users downloaded apps from third-party app stores. Other important download channels are app stores of smartphone vendors, app stores of system operating vendors and app stores of operating vendors. Only a small amount of users will download apps from websites. Users of iOS usually download from App Stores.

Active users of third-party mobile app stores in Q2 2015 increased to 428 million, with growth of 1.9% compared with the previous quarter. Users of third-party app stores kept a steady growth momentum although the growth rate slows down.

360 Mobile Guard ranks first in terms of total number of active users, followed by Myapp and Baidu Mobile Assistant. Xiaomi app store is also popular, especially among MIUI and Xiaomi users. Stores with high profile, variety of apps and security insurance are key factors to attract more users.

In terms of popularity of various types of mobile apps in China, the Chinese smartphone users prefer instant messaging and social communication apps, followed by news apps and music apps.

App update frequency by developers could reflect the number of active users and the competitiveness. About 14.3% apps are updated once longer than six months which means users aren’t a lot and may not be further maintained.

Tencent News, TouTiao, Netease News and Sohu News are major channels for Chinese to get news information. The post-90s, post-80s and post-70s are the majority of mobile app readers.

By Q2 2015, China’s music apps users reached 423 million with a growth rate of 2.7%. Kugou Music and QQ music win in music apps market with their high publicity and large song lists. Music apps are not used as frequently as news apps.

Taxi-calling apps are the most frequently used amongall car-calling apps for the lower cost. Users who prefer to get a better experience are more likely to use carpooling apps. The average fare of 78.2% taxi trips is less than 50 yuan (US$7.85) while only 24.9% of carpooling is less than 50 yuan. About 36.8% of carpooling costs is between 50 yuan to 100 yuan (US$15.70).

China mobile video app market is basically the same with the online market. Active users of music apps reachED 368 million with a growth rate of 3.1%. A matured online video market of Youku, iQIYI, Tencent Video, PPTV and Sohu Video has been established. Other apps in total accounted for only 18.1% of market share.

China’s mobile gaming users reached 10.85 billion yuan in Q2 2015, with 491 million users. Mobile apps couldn’t process too much storage and a majority of existing apps are puzzle games.

China’s app market still has a large room for development. At present, advertising and value-added services are the two most important profit channels for developers. However, the average usage period of apps is only ten months and about 85% apps are uninstalled within a month, especially social communication apps, which makes it hard for developers to gain profits. Developers should avoid invasion of users’ privacy and improve performance to attract more users.

Also read: China’s Mobile Search Market Insights in Q3 2015

In H1 2015, the number of China mobile internet users reached 860 million, with 120 million increases compared with Q1 2015, which showed s high penetration rate of mobile music users according to data from TalkingData.

Among the top 20 mobile music apps, Kugou music ranked first with the coverage rate of 30.47%, followed by QQ Music (19.80%), Miui Music (8.53%), Kuwo Music (7.80%) and TTpod (5.30%).

Among the top 20 mobile music apps by the number of active users, Kugou music took the lead position with active rate of 10.20%, followed by QQ music (10.19%) and Miui music (8.53%).

Female users accounted for 48.30% of the total mobile music app users in China, lower than that of male. Male users preferred music editing apps, comprehensive music platform and radio apps while female liked apps for music entertainment, music player and mobile phone ring-tones.

The location of mobile music app users had some relationship with the development level of regions. Beijing, with an overwhelming coverage rate of 20.20%, had the largest number of mobile music users, followed by Guangdong and Zhejiang province.The top 10 provinces and cities made up of 66.30% of the total market. First-tier cities and second-tier cities consisted of 15.40% and 32.30% of the total users respectively.

Among the top 10 smartphones supported by Android system for mobile music apps, Samsung and Xiaomi accounted for half the market, followed by Huawei 12.88%.

80.00% smartphones supported by Android for mobile music apps were below 1999 yuan. Smartphones between 1000 to 1999 yuan were the first choice of 36.80% users. 35.50% users bought handsets between 500 to 999 yuan and 17.70% used phones from 2000 to 3999 yuan. Only 2.30% users would buy phones over 4000 yuan.

KitKat, Jelly Bean, Lollipop and Ice Cream Sandwich were different versions of Android OS. KitKat adoptions ranked first with ratio of 47.10%, followed by Jelly Bean (41.10%) and Lollipop (7.40%).

Wi-Fi became more and more influential among Chinese users. About 60.00% users would get access to the internet through Wi-Fi. Only 10.20% would utilize 4G network because of the high cost and incomplete coverage.

China Mobile, China Telecom and China Unicom made up of about 90.00% of Chinese network for mobile music app usage. 64.60% users gained access through China Mobile to the internet, which prevailed the sum of the others.

Comprehensive music platform apps referred to the apps that offered music, MV, lyric, radio, drama, cross-talks, variety shows and the others. Among the top 10 mobile music apps with highest coverage rate, Kugou music maintained the highest with 30.47%, followed by QQ music. All the others were lower than 10.00%. Kugou music, QQ music and Miui music were the most active mobile music apps, with ratios of 10.20%, 10.19% and 8.53% respectively.

Mobile music apps referred to online radio that supported traditional radio service, original podcast, voice books and the like with widely covered themes and subjects. Ximalaya, Qingting FM and Xiaomi Radio took the first three positions in coverage and active users. The others were lower than 1.00%. See mobile music entertainment apps, mobile ring-tone apps and music player apps below.

Mobile music companies began competitions on copyright and tended to integrate in groups. Xiami Music and TTpod were acquired by Alibaba; Netease issued Yunyinyue; Himalaya FM acquired strategic investment from Yuewen Group, signing copyright cooperation agreement; and Changba gained D round of financing which promoted the layout of actual KTV.

Market structure has been changing. Original resources on the one hand integrated to large application companies, on the other hand cost uplift of copyright further compressed the living space of small and medium applications which might even be eliminated out of the market. Chinese mobile music industry didn’t set any defined shape, thus there was still a possibility that an app changed the market share in the future.

Also read: China Top 100 Mobile Apps in July 2015

China online social services on mobile reached total number of 190 million unique visitors in May 2014, according to iResearch, an increase of 32% compared with last May.

In contract, social services on PC had a YoY growth of 6.3% to 470 million unique visitors.

Social apps are the fourth most popular app category in China, after instant messaging, music & video entertainment, and games. (Tweet this).

Video sharing is very popular on social media; it’s the same in China. Top 10 video websites take up 93.8% of the total video sharing on Weibo. 

In March, the videos under entertainment, and news categories are the most popular on Weibo, representing 62% of the total views. What’s interesting for marketers to know is, longer videos tend to be played less.

The percentage of female viewing videos is 14.2% higher than that of male. Men prefer music, movie and travel while women prefer food, travel and music.

72.2% video viewers on Weibo have college education; majority are between 18 to 25 years old.

The Evening Post reported, free music download in China is to be ended on Dec 31. Most online music platforms like Baidu Music, QQ Music, Duomi, Kugou are going to charge for music download services. However, this is a special thing for high-quality copyrighted music download while the online streaming is still free.

 Is it an agreement in the industry?

Shi Jianping, president of Duomi Music, admitted that Baidu, QQ Music, Duomi, Kugou and Kuwo had reached an agreement to charge at download services. These 5 platforms occupied more than 95% market share in China. Other websites are likely to join this charge army in the near future. And more and more record companies are negotiating relative charging issues.

As for the timing, it is not compulsory since each platform could adjust it according to the situation. Due to the unfinished contracts, Baidu music will charge download next April.

How can online music be charged?

Top three record companies, Warner, Sony and Global, provided a list of guiding prices, including minimum monthly fees for downloads. But most music websites prefer to differentiate their prices, of course based on some specific principles. At present, seldom websites will reveal their charge policies. Basically, the price will be 1 yuan for each song or 10 yuan to 20 yuan for a month.

Also, charges are only for high-quality copyrighted music download while the online auditioning is still free. That is to say, only when users downloaded music whose formats are APE, FLAC or something else, will they be charged. QQ Music has established a policy called “VIP Download”. Users will be only charged 10 yuan per month to enjoy high-quality music.

Based on the principle of guarantee and division, all profit will be divided between music platforms and record companies

What are the comments at all sides?

Certainly, record companies feel thrilled with this change. They used to losing hope for online channels and they could not see any respect for their copyright before. But this trend of charging may emerge new look for the record industry. In the eyes of website owners, charging used to be extremely hard under the big picture of pirate copies and free music services. However, action should be taken.