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Music Websites Try Charging

By: Wong Siu Tan
June 7, 2013

Wang Xiaowei (王小玮), COO of (虾米), reported that his company and other major music websites like Baidu Music, QQ Music, and Kugou Music (酷狗音乐) started charging for some services on June 5. The question though is whether users who are so accustomed to getting music for free will be willing to pay.

Earlier this year, Kugou Music added paid services, allowing users to download 150 songs with high sound quality each month for five yuan. Users can still download lower quality music files for free. 

Similarly, has also launched a monthly paid service allowing 100 high-quality music downloads each month, in addition to its free features. Xiami CEO Wang Hao (王皓) said that the main purpose of the new service is to change their business from music downloading to music streaming. According to Wang, Xiami discontinued its mobile app allowing unlimited free downloads on June 5. 

Some online industries like e-book and video sites have already found some success in charging for services by providing free service in addition to premium features for those willing to pay.

Paying for music downloads isn’t new in China. Websites like Douban Music and Duomi Music already have paid services. But some still think charging customers for music at this early stage will drive them away. Chinese companies, like many around the world, are struggling to find a business model that makes money on music.

At the beginning of 2013, famous musician Gao Xiaosong (高晓松) said music websites charging users could help more artists make a living. However, in China, musicians aren’t usually affected by how much profits their music makes. Whether music is sold in stores or online, that money goes to their record label. 

According to Duan Qingqing (段菁菁), a reporter from Xinhua, paying for online music is an issue in the industry, but a deeper concern is how to share the profits made by websites. Since April 2005, four major record companies have sued online music websites for pirating their songs. Conflicts between record labels and these sites are common.

Zang Yanbin (臧彦彬), an official from China Audio and Video Association (中国音像协会), said the reason behind these conflicts is the unsound profit distribution system. “They used to pay record companies according to the web traffic a song received, but now they charge users for songs,” Zang said. “If the profit from a song is 1 yuan, how much should websites pay record companies?” 

In 2011, China’s music industry earned more than 30 billion yuan. However, the mainland record companies only saw two percent of that profit. Most of the rest went to music websites.

Links & Sources
Guangzhou Daily - 免费音乐真敢收费?



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