Digital Music in China, It Has To Be Free Lunch

‘mp3’ is not a jargon any more and my parents even know it quite well, but less and less consumers are willing to buy CD. In 2005, the global sales for digital music is around $1.5billion, and the figure turns to $10.7billions in 2010. The fact we have to accept is that the traditional music market is shrinking and digital music is catching up quickly.

This is also happening in China. The digital music market here is growing quickly. In 2010, the number of Chinese digital music users has reached 370millions. In 2009, 97% of digital music comes from Internet, but it only generates 8% of revenue, said Xie Zhengyu, CEO of a popular music client Kugou which claims 60million users. You can always search for and get the mps3 downloaded somewhere, digital music in Chinese internet environment sounds like a free lunch to everyone.

You may say the hope resides in the mobile market. Correct! a report says in 2009, the market value for the Chinese mobile digital music is reported at rmb 30billions, which is cool. But unfortunately the operators take 94%, service provider takes 4%-5%, the music provider takes even less than 1%.

The solution is quite obvious, it’s on mobile, but the key is the fundamental of the market has to be changed first.

[image via pcpop]