In China, ‘Spotify’ is free

For a big country, there’s not much revenue in music in China. But that’s not stopping the nation’s tech giants. Photo credit: Pexels.

If you say the word “streaming,” one other term has to come later in the sentence: “subscription.” Whether it’s Spotify or Netflix, the all-you-can-stream revolution involves a monthly pay-out. But not in China.

Over in China, the major music streaming apps are all free. There’s no Spotify, but there are plenty of well-stocked homegrown services from an array of Chinese tech giants and startups, all offering legal and licensed music (well, mostly) to stream at no cost whatsoever. And there aren’t even any ads interrupting the music.

Dip into Baidu Music (run by the nation’s top search engine), or Xiami (owned by online shopping titan Alibaba), or QQ Music (made by Tencent, maker of WeChat) and all the music is free, either on your PC or the mobile apps. You don’t even need to sign up to start listening. What they’re all doing instead is offering VIP packages so that you can stream or download higher-quality music.

The maker of WeChat now also runs China’s biggest online music network.

Since the VIP subscription is totally optional and the fee is so small, typically US$1.50 to $3 per month (compared to the US$6 that Spotify charges in nearby Hong Kong, or US$10 in the US), it’s hard to see how China’s tech companies are making money from online music. Likely they’re not. Instead, these giant companies that do everything from battling Uber to delivering food see music as one more thing they need to do to keep users busy – just as the same three companies all have huge sites for streaming video.

Despite the lack of money coming in, there’s a lot of cash being thrown around China’s growing music streaming industry. Earlier today, Tencent announced it was merging with the parent company of two popular Chinese music apps (KuGou and Kuwo, made by China Music Corporation) in order to get some efficiencies of scale.

And the free music won’t be stopping.

“The new company will promote a freemium model built upon authorized music rights,” said a statement today about Tencent’s huge merger of QQ Music with the China Music Corporation. The value of the deal was not disclosed.

The deal effectively means the maker of WeChat, China’s top messaging app, also runs the biggest online music network in the country.

China has an estimated 282 million online music listeners on their phones, says data from Beijing-based iResearch for the end of last year. 35 million new listeners were added during the course of 2015.

Converted from Chinese yuan. Rate: US$1 = RMB 6.69.