Here behind ‘The Great Firewall’, in a completely enclosed internet, the Chinese digital music industry can often feel somewhat cut off from its Western counterparts – unrelated industry narratives running in parallel, ne’er to overlap. It is a rare and curious thing, therefore, for the PRC to be part of a global story, as it is, somewhat surprisingly, in the current ‘Taylor Swift vs Free Music’ intrigue.
The story of Taylor Swift withdrawing her catalogue from Spotify – due to the conflict between her belief that “music should not be free” and the freemium streaming service’s insistence her new album 1989 be made available on their free tier – is now dominating Western industry news, immediately becoming a defining debate for the still fledgling music streaming economy. This seems far removed from the Chinese market, where free, frictionless consumption of digital music is almost a basic consumer right.
With this as an unlikely backdrop, it appears Team Swift have decided to extend their crusade to the China market as well. On October 29th, the country’s main streaming platforms received notice from Universal Music China, requesting them to remove Taylor Swift’s entire back catalogue from any free components of their services, in compliance with a global directive from her management.
“When I found that her music had been taken down, I was heartbroken, and I didn’t understand what was going on,” said Beijing high school student Li Zhiyi, 17, a self-professed Taylor Swift superfan since a trip to the US in 2010.
At the time of writing, scant trace of 1989 remains on any of the major services’ free tiers, but the back catalogue seems to be slower to follow suit, smattered as it is across a number of platforms as single tracks and compilation cuts, with the exception of QQ Music – owned by tech giant, Tencent – who appear to have complied fully.
On social media and in streaming platform comments sections, confusion reigns. In the absence of any official statement explaining the sudden lack of Swift, and with the platforms themselves offering no explanation beyond an error message blaming “copyright reasons”, reactions ranged from bewilderment to outright indignance. Many users have taken to posting their email addresses along with a request for a free download link, and seemingly being obliged.
“It took me ages, but eventually I managed to find [an illegal] download,” said Li Zhiyi, who goes by the name ‘Swift’ in English.
A widely circulated post on the topic (in Chinese) from November 5th presents the slow takedown process of the back catalogue as evidence that China’s legal and regulatory environment is not yet ready for such a sweeping gesture. The scene today, however, is one of a relatively comprehensive clear-up with a few hold-outs and residual quirks. For instance, on Kuwo, another popular streaming platform, most of Taylor’s big pre-1989 hits are still available, mislabelled as the work of someone called DJ Brother Little Tiger, as part of his album Foreign Language Songs. On Baidu Music, a user-uploaded copy of Taylor Swift’s “The Love Story” with the artist name written where the song title should be (and vice-versa) also escaped the takedown.
Taylor Swift songs disguised as the work of DJ Brother Little Tiger on Kuwo app
Alibaba’s Xiami, occasionally referred to as “the Spotify of China”, has had to remove Taylor Swift’s music in its entirety, including from its paid tier. As a freemium service in which free and premium users see the same content, but listen in different qualities, technical issues prevent offering Taylor Swift’s music to one tier but not the other – something Xiami told us they are working to resolve.
Meanwhile, in videoland, free users still have access to the full complement of Taylor Swift music videos across all of China’s major platforms like Youku, Tudou and LeTV. This would suggest that, similar to in the West, the takedown is limited to audio products.
Indeed, on QQ Music, free users who click on back catalogue that is still visible (if not playable) are presented with a message: “Apologies, due to copyright reasons, we cannot currently provide this song. Would you like to watch the MV [music video]?” Clicking “Yes” launches a full-length high-definition stream on Tencent’s integrated video platform.
Re-direction to a music video on the QQ Music phone app
In the absence of Soundscan, an independent chart system, or, indeed, any impartial data, Taylor Swift’s popularity in China can only be judged using public-facing statistics on China’s various platforms. Her songs have been streamed over 43 million times on Xiami – almost 20 million more than Taiwanese-American popstar Wang Leehom, one of the most popular ethnically Chinese singers of modern times. Her 3 million followers on China’s Twitter equivalent Sina Weibo put her in the same league as Chinese megastars like Chris Lee, and ahead of other Western artists like Beyoncé, who has 2.4 million. The Shanghai leg of her “Red” arena tour in May reportedly sold out its 18,000 tickets in under sixty seconds, a China record.
As of June this year, China boasted some 632 million Internet users, 488 million (77.2%) of whom were using the Internet to listen to music. Of these, 355 million were accessing digital music via mobile (CNNIC). This gargantuan consumption of music takes place primarily on a handful of major domestic music services, all of which offer recognisable streaming, downloading and community environments both on the web and via mobile apps. The only international operator currently in China is Nokia/Microsoft’s Mix Radio service, with Spotify, Rdio, Deezer, iTunes et al remaining conspicuously absent.
According to the IFPI, however, these huge audience numbers yielded digital trade revenues of just US$65.4 million in 2013 (total music market trade revenue was US$82.6m), a number even more depressingly expressed – as if that were necessary – as US$0.15 per digital user per year.
To frame this internationally: Since it began in 2008, the embattled Spotify alone has paid “more than two billion dollars” to rights-holders, a figure approximately four times the entire trade revenue generated in China during that period. This is compounded when you consider that Spotify’s 50 million worldwide subscribers wouldn’t even earn it a place in China’s top five streaming services, by some distance.
According to C-Pop mega producer and boss of Amusic Billy Koh, “The music labels and publishers were unable to stop the illegal free model in China way back in the turn of the millennium. Chinese people have been accessing free music online in large scale for almost 15 years now. It will be hard to change the perspective of these consumers.” In this context, the arrival of the premium tiers on the major services in 2013 – usually offering perks like higher quality or mobility for around US$1.6 per month (10 RMB) – was a watershed moment. The take-up to date has, however, by all accounts, been “negligible”, commonly understood as “less than 1%”, meaning if all goes “well” in this instance, Taylor Swift’s catalogue would only be available to less than 1% of the digital music audience.
A surface reading of Taylor Swift’s motives in the West suggests two aims: to maximise revenues for her music, and to encourage debate around her more general ideals of the value of music, as outlined in her Wall Street Journal Op-Ed of July this year. Are either of these aims realistic for the Chinese market? A decision must have been made in the affirmative, but it appears to have come from Swift HQ in the US, with little consideration given to the peculiarities of the Middle Kingdom.
Firstly, let’s address the maximising of revenues: Digital music is woefully monetised in China, with any money made being shuffled around in non-itemised chunks, paid annually in the form of advances and minimum guarantees based on a catalogue’s – as opposed to an individual artist’s – perceived market share. There is practically zero usage reporting provided. This being the case, Taylor Swift’s music will have been licensed into the platforms as part of the Universal catalogue and monetised only via the original advance, meaning that her decision to pull out of the free tiers will have zero effect on her earnings.
Is there any long term benefit to be had from creating scarcity of her music in the short term? This may have been the case if there was a degree of coordination around this takedown, but by all accounts there has not been. For example, if any windowing had taken place – allowing fans to legally listen to the album via a limited exclusive arrangement with a platform, then pushing towards some kind of premium engagement, all the while explaining the artist’s motivations via PR – then the scarcity approach could work in a brand-building sense, and not just a potentially damaging unexplained-scarcity-of-music sense.
The frustration caused by this execution was best expressed to us by Wang Hao, Xiami’s CEO, in terms unlikely to be heard coming from Spotify boss Daniel Ek: “I personally believe this is a stupid move by Taylor Swift. It’s also ungrateful; she has used the Internet to generate hype, then cut the Internet out.”
Secondly, the stimulation of debate: In a recent interview with Yahoo!, Swift said she was “not willing to contribute my life’s work to an experiment…perpetuating the perception that music has no value and should be free” – a worthy jump-off point for a debate but one that would have been largely lost on the Chinese market even if it was presented to them, which it does not appear to have been. The attempted removal of her catalogue in China seems to have been decreed from afar and implemented with no accompanying context. The result is a confused audience and a mildly frustrated industry.
“Her Chinese fans were really upset, and some didn’t understand her decision,” said superfan Li Zhiyi. “Her hardcore fans won’t be put off though – they’ll do whatever they have to to listen to her music, legal or otherwise. I don’t like the fact that she’s done this, I think it’s pretty messed up. She’ll probably lose a lot of Chinese fans because of this, I think.”
From an industry debate perspective, Xiami’s Wang Hao says “We don’t believe that this move will bring many [new paid] subscribers – that’s just wishful thinking on the part of the rights-holder. Right now [in China], subscribers do not sign up because of particular content. It’s completely different behavioural logic to the video market,” referring to an online video market in China in which pay-per-view is becoming increasingly common for popular TV shows and films.
Ultimately, in both hemispheres, this is a conversation about the value of music, the difference being that the far more nuanced Western music industry is able to tackle the debate on a granular level, citing itemised royalty reports, myriad paying business models and a heritage of music monetisation. In China, however, the conversation surrounding value in music is still at a conceptual, rather than a practical level: The consumer is vehemently defensive over free access to digital music, copyright law is still in its infancy, music platforms are only just emerging from the dark ages of 100% copyright infringement. In short, money is a fairly new arrival to the online music landscape, let alone the pay-through of money in itemised royalty reports. There are, however, improvements (see: “Glaciers Aligning”), but the incremental nature of these improvements needs to be stressed to those not familiar with the market. Bombastic statements aren’t typically productive or well received, particularly from foreigners.
The prevailing sentiment amongst those we talked to for this article is that this initiative is by someone not familiar with the market, as highlighted to us by QQ Music’s Andy Ng: “We respect the decision made by the artist or label and have followed the instructions. However, we hope that in the future, when there is a chance to meet with the decision maker, we can explain more about the current situation and explore other ways in which to tackle problems and change the market accordingly, as Tencent knows online user behaviour more than someone with no experience in the Chinese Internet market.”
Perhaps the most obvious question resulting from this whole debate is: Will people actually ever pay for music in China?
“I might…if I had the economic resources to pay for her music, I probably would,” says superfan Li ‘Swift’ Zhiyi. “If she released a new album next week and did the same thing, I’d still listen to it illegally. I’m not an adult, I can’t earn money, how am I supposed to pay for music? Downloading illegally is easier than asking my mum, and you can always find a way online. Only rich people who’ve lived in the US would consider paying, I think. Most people wouldn’t pay in China, because we’re used to free.”
Ed Peto & Alex Taggart, Beijing
Disclosure: While we are satisfied that this article represents a fair and balanced account of this story, we feel obliged to disclose that through our work with China Music Business parent company Outdustry, we have a working relationship with a number of companies featured in this article, including Xiami, QQ Music, Kugou, Kuwo, Universal Music and LeTV.