The music industry of China is an unknown continent from a Western music business research perspective. Therefore it is very meritorious that John Fangjun Li, a lecturer and PhD candidate (2008-2012) at Macquarie University, provides one of the first overviews of the history of China’s music industry for an international readership. In a series of four blog contributions he highlights the development of the recorded music industry in more than 100 years from the final period of Imperial China to the current Peoples Republic of China. He gives an overview of the impact of Western major recorded music companies in the first half of the 20th century and of the emergence of serveral state operated but also privately owned Chinese companies after the Great Cultural Revolution (1966-1976) in Shanghai, Guangzhou, Beijing and other large cities. He also highlights the current digital music business in China that has been dominating the recorded music industry since the the mid 2000s.
In the fourth and final part of the series on China’s music industry, John Fangjun Li highlights the current situation in the recorded music industry in China, which is totally occupied by digital online and mobile music services.
Guest post by John Fangjun Li
This part highlights the brief history of the music industry in China in the 21st century. Due to both the rapid spread, development and convergence of digital technologies related to computing, telecommunication and music, and the special preference and enthusiasm of Chinese people for new and popular technologies (Zhang, 2007), the progress of China’s digital music industry was almost similar to the Western countries (Sun, 2006; Chen, 2010). The digital music industry has sat center-stage in the music industry’s value chain and greatly influenced China’s music industry during the first decade of the century (ibid).
The online and mobile digital music market initially emerged in the Western countries during the mid-1980s and the early 1990s (Hayward, Orrock, 1995; Bozina, Dumancic and Knezevic, 2006; Tschmuck, 2006). However, digital technology and, in particular certain digital music business models (such as P2P file sharing), have greatly influenced China’s digital music industry in the 2000s (Li, 2006; Sun, 2006; Chen, 2011).
Telecommunication and computer companies have been engaged in China’s music industry in China since the late 1990s (Li and Morrow, 2012) by distributing and transmitting music in China on the Internet (ibid; Montgomery, 2010). Certain major digital music business firms were established and mainly developed the online music business in this period. The most representative firms were ’9sky’ (9sky.com, 1999), the ‘Wanwa’ (wangwa.com, 2000), and the ‘A8 Music Group’ (a8.com, 2000), the ’163888′ (163888.net/www.ifenbei.com/fenbei.me, 2003), ‘Top100′ (ju jing, top100.cn, 2005), the ‘Alliance of Digital Music Distribution’ (taijoy.com, 2005), ‘Baidu MP3′, ‘Kuro’s P2P’, and so on (Sun, 2006, 2007; Li, 2006).
’9Sky’ and the ‘A8 Music Group’ were the first music companies that started their online music business in 1999 and mobile music business in 2000 respectively; these two years mark the emergence of the commercial online and mobile music business in China.
The convergence of telecommunication and computing with the music industry played an essential role in the digitalization of the music industry in China, especially in the recorded music sector. This intensive convergence process increased the complexity of the structures of China’s music industry compared to the 20th century.
Thus, China’s digital music industry is faced by the serious problem of music piracy in the first decade of the 21st century (Sun, 2009; Montgomery, 2010). Despite the presence of digital piracy, the value of digital music sales (mainly online and mobile music) reached 3.6 billion Yuan (approximately 57 million US dollars) and exceeded those of recorded music sales (such as CDs) in 2005 (Chen (2010) and Hu (2006)). The year 2005 is, therefore, also called ‘The First Year of Digital Music’ (ibid; Sun, 2006). Thus, the digital music industry played an essential and even leading role in China’s music industry since the 2000s, particularly after the mid-2000s.
The mobile music industry emerged in the early 2000s in China (Yao, 2007) – slightly later than the online music business (Montgomery, 2010). The ‘A8 Music Group’ is one of the first music companies that have been involved in the mobile music business since 2001 (a8.com). Moreover, the ‘Taihe Rye Music Firm’ (TRMF) developed the business of polyphonic ring-tones in collaboration with the ‘China Mobile Group’ (CMG) in 2003 (Wang, 2012). The China mobile music web ‘www.10086.cn’ (formally named ‘www.12530.com’) can be regarded as the largest online music store in China; it was established in 2009 and offers mobile ring-tones (Sun, 2006).
The ‘Shanghai Synergy Culture and Entertainment Group’ (‘SSCEG’) also played an essential role for the development of China’s mobile music business. This industry group includes two of the leading record companies: the ‘Shanghai Audio-Visual Press’ and the ‘Shanghai Audio-Visual Company’. Both are involved in the digital music industry, in particular in the mobile music business (Li and Morrow, 2012). According to Sun (2009), ‘SSCEG’ signed agreements with ‘China Unicom’ and ‘Sina.com’ to cooperate on digital music market in 2009.
Another remarkable development was the establishment of copyright agencies such as ‘R2G’, which was established in 2003. This agency mainly adopted legal action against piracy and played an essential role in China’s digital music industry during the second half of the 2000s (The R2G, 2004-2009). According to Jin (2007), the three international major record companies, Sony Music Entertainment, Universal Music Group and Warner Music Group but also other international independent record companies charged ‘Baidu’ company for copyright infringing behavior of its users, but finally Baidu won this law case in 2006. However, the international majors also charged the operator of ‘Yahoo China’ – the Alibaba Information Technology Co., LTD – for copyright infringement and in this case they were successful (ibid).
More legal activities influenced China’s digital music industry during the 2000s. The ‘Chinese Music Copyright Society’, the ‘Chinese Audio-Visual Copyright Society’, and the ‘International Federation of the Phonographic Industry’ issued a joint statement in 2008 to oppose Baidu’s operations (Jin, 2010: 71). According to Li (2012) all these legal activities had positive impact on China’s digital music industry in the second half of the 2000s.
To sum up, despite a high level of file-sharing activity, the music industry in China, which has emerged in the late 1990s, took off in the mid-2000s due to a rapidly growing digital music market. A first step towards a domestic online music was the establishment of ’9Sky’ in 1999. A year later the mobile music business emerged when the ‘A8 Music Group’ started its operations. In addition, the ‘China Mobile Group’ played a leading role in launching a sustainable mobile music market. Thus, the digital music industry can be regarded not only as an integrated industry but as the most rapidly growing and most important part of China’s music industry in the first decade of the 21st century.
Bozina, M.; Dumancic, K. and Knezevic, B. (2006). The Impact of Internet on IPR – A Case Study of Music Industry in Croatia. Retrieved on December 12, 2011 from http://www.dime-eu.org/files/active/0/IPR-%20WORKING-PAPER-16_Bozina-et-al.pdf
Chen, J. (2010). The Annual Revenue of the Digital Music Industry Has 30 Billion Yuan (about 4.76 billion US dollars), the Content Provider Only Gets One Percent. Beijing Business Daily, on December 22, 2010.
Hayward, P. and Orrock, G. (1995). Window of Opportunity CD-ROMs, the International Music Industry and Early Australian Initiatives. Convergence, 1 (1), pp. 61-79.
Hu, J. (2006). A Rapid Expansion of Digital Music Market to 4.1 Billion Yuan. The Market Newspaper (6), published June 12, 2006. Retrieved on 04/12/11 from: http://media.people.com.cn/GB/40641/4461140.html.
Jin, H. (2006). Music Copyright Issue Caused by New Media. Western Chinese Science and Technology, (1).
Jin, W. (2010). Elementary Study on the Developmental Approach of China’s Digital Music Industry. The Journal of JiangxiFinanceCollege, 23 (1).
Li, F. (2010). A Study of the Research Activity of China’s Music Industry Since the Reform and Opening-Up and Some Other Related Issues. Huangzhong: Journal of Wuhan Conservatory of Music, (3), pp.12-23.
Li, S. (2006). The Digital Entertainment Industries. Sichuan, China:Sichuan University Press.
Li, X. (2006). The History of China‘s Cultural Industries. Changsha, China: Hunan Art and Literature Press.
Li, F. (2012). China’s Music Industry: Evolution, Development and Convergence, PhD thesis at Macquarie University.
Li, F. and Morrow, G. (2012). Strategic Leadership in China’s Music Industry: A Case Study of the Shanghai Audio Visual Press. In the book ‘Arts Leadership: International Case Studies’. Melbourne, Australia: Tilde University Press. August 2012.
Montgomery, L. (2010). China‘s Creative Industries: Copyright, Social Network Market and the Business of Culture in a Digital Age. Glos, UK: Edward Elgar Publishing Limited.
Tschmuck, P. (2006). Creativity and Innovation in the Music Industry. Dordrecht, The Netherlands: Springer.
Sun, L. (2006). China Leapfrogs into a ‘Digital Music Age’: International Recording Industry Giants Converge at Music Fair. Retrieved on 15 March 2011 from: http://news.xinhuanet.com/newmedia/2006-05/17/content_4555754.htm (in Chinese).
Sun, H. (2009). Shanghai Synery Group Cooperated With the Unicom and the Sina and Marched the Digital Music Industry. Chinese News Publishing Newspaper. Retrieved on December 23, 2010 from: http://www.chinaxwcb.com/xwcbpaper/html/2009-12/23/content_1782.htm.
Yao, C. (2007). A Prosperous Market of Wireless Music. Communicate Studies, 1 (28). Retrieved on October 25, 2011 from: http://www.huawei.com/publications/view.do?id=1621&cid=3162&pid=61.
Zhang, K. (2007). The Study of College Students’ Internet Users’ Conformity. Chinese Youth Research, (4).
John Fangjun Li is adjunct lecturer and PhD candidate (2008-2012) at Macquarie University, Sydney, Coordinator of the Australian-Chinese Music Industry Research Network, a member of IASPM (Aus-NZ). Previously he worked in Southern Cross University Australia (assistant researcher), Beijing Institute of Contemporary Music (head of the college of arts management), China Conservatory Music (associate professor), and Shanghai Synergy Cultural & Entertainment Group (music producer and marketing manager). He also obtained masters in arts management in Australia, masters in ethnomusicology, and a bachelor in music education in China. His main research interest areas are music industry, arts management, and creative industries. He published more than ten papers in international core journals and participated in some main international conferences in these areas. John Fangjun Li’s email: firstname.lastname@example.org
 ‘China Unicom’ is the second largest telecommunication company in the China.
 Sina.com is one of leading web portals in China.