CD Slowdown

While the global music market showed improvement last year, China’s has receded even further, according to the 2012 Report on Chinese Pop Music Market from the China Record Working Committee.

“The physical market had practically disappeared,” the report said, according to China Daily, “while the new digital music market has not given record companies their due share.”

In fact, revenues from physical product declined 95 percent between 2003 and 2010, from 1.22 billion yuan ($196 million) to 60 million yuan.

Zang Yanbin, the president of the committee, told China Daily, “The problem with the Chinese recording industry is that the cost of piracy is too low while that of protecting copyright is too high. That’s why capital is reluctant to enter the industry and no good works are coming out.”

In terms of digital music, revenues in 2001 were 1.26 billion yuan, comprising 280 billion units downloaded and streamed. Consequently, copyright owners should have earned 632 million yuan but only made 99 million because to piracy, lack of fair profit distribution and the inefficiency of collecting agencies.

If there is any good news, it’s that the number of licensed websites paying royalties is on the rise. There are nine digital music services that deal in legal downloads, including those that pay royalties to the major international record labels. In many cases these sites still provide music to users for free and pay the royalties out of income from advertising.

Many content holders are negotiating with websites to charge for music downloading, as well. Zang says that such payments are “inevitable” if China’s music industry is to survive and thrive.

As it stands, few Chinese artists are actually benefiting from the changes. Most make whatever money they earn from performing live. More significantly, no Chinese artists have made any inroads in non-Chinese language markets.

“Korean rapper Psy s success seems to be a haphazard phenomenon,” said Zang, “but it isn’t. Behind ‘Gangnam Style’ are great efforts by the Korean government and music companies to develop and promote Korean pop music. The Chinese government should also try to create a better environment for Chinese pop.”