music

The clock is ticking for China’s online streaming services, with less than 10 days to go before they have to rid their sites of unlicensed, free music.

Last week China’s copyright watchdog, the National Copyright Administration (NCA), announced that all related services should remove unlicensed music by the end of the month, adding that those who do not follow the order will be punished with substantial fines.

The latest announcement is part of the Chinese government initiative Sword Net 2015, an anti-piracy campaign that aims to improve online copyright management, better protect royalty holders and restore confidence in the copyright system, said the NCA.

And while it’s bad news for marginal companies who won’t be able to afford the licensing fees, giants like Tencent QQ, Baidu Music and NetEase Music will be enjoying the opportunity to shake a few smaller players off their coat tails.

Currently, nearly all of China’s online streaming services have copyright issues, just to different degrees, said deputy director of NCA at a conference that assembled management from leading players, including Tencent, KuGou, and Baidu.  Most services in China allow users to access and download popular music for free, monetizing through advertising. The rampant copyright issues in China have made it tough for foreign services that use the paid model to enter, including Apple Music and Spotify, as well Google Music, which attempted a China-exclusive launch in 2012 but later exited.

According to an anonymous music platform executive who gave an interview to Tencent, that NCA has given a further timeframe of two to three months to prepare a final payment plan for legal internet music downloads, on top of the ridding the platforms of unlicensed music by this month.

However, the above-mentioned source also expressed concerns that government involvement may create a monopoly in China’s online music streaming sector. Services backed by deep-pocketed internet companies may benefit from the edict as they have more funding to purchase copyrighted content.

According to a CNIT-Research report, the top 6 music apps in China are currently KuGouTTPOD (supported by Alibaba Group), QQ Music (of Tencent), KuwoDuomi (backed by Chinese digital music company A8) and Baidu Music. Together, they make up 80% of the market as of Q2 2014.

Last week, Apple revealed the countries who would be able to access the new apple music service, leaving China off the list. While the announcement could bring hope to services including Apple Music and Spotify, history has shown that China’s insatiable appetite for pirated media usually prevails.

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