Discussion keeps the world turning.
This is Roundtable.
You're listening to Roundtable with myself, He Young.
I'm joined by Steve Hatherly and Yushan in the studio.
Coming up, from a mass takedown of pirated digital songs to the rise of paid subscriptions, China's decade -long copyright rules have transformed music streaming into serious business.
But in this new cleaner ecosystem, are musicians finally winning or just the streaming platforms and need a boost to crush the week?
Our special segment Motivational Monday is your ultimate adrenaline shot to kick things off strong.
Our podcast listeners can find us at Roundtable China on Apple podcast. Got a question that's keeping you curious from social issues to tech, and everything in between, let us take a stab at it.
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Emails are fine, but voice memos are always better.
And now let's switch gears.
10 years ago, China's music industry looked a lot like the global scene.
Piracy was rampant, mp3 download sites thrived, and the quote -unquote free music felt like a birthright.
Music was was everywhere, but rights were rarely respected.
Then came July 2015, when China introduced its strictest ever streaming rules, ordering millions of unlicensed songs offline.
It was more than a policy shift. It was a turning point that signaled the end of the piracy era and the beginning of of strict copyright enforcement in China.
Let's rewind to July 2015, when China took an unprecedented step to clean up its online music scene.
What were the immediate results?
Well, it was like you mentioned back in July 2015, when the country's top copyright regulator, the National Copyright Administration of China, announced a stricter set of music streaming rules, asking online music service providers to remove unlicensed products by the end of that month.
And music websites that continue to offer unlicensed music after that would be severely punished.
And after this was implemented, the official data shows that music streaming services had removed more than 2 .2 million unlicensed songs by July 2015.
2015 i think a few years before that when i first entered junior high it was a time when wow it felt so good to just feel free to download whatever you want so good to get stuff for free that wasn't supposed to be for free and then i got in like high school around yeah july september 2015 and that's one more reason to you know for me to dislike high school i am immediately reminded Reminded of Napster.
Have you ever heard of Napster before?
If you haven't, I wouldn't blame you.
This goes back to 1999 to 2001.
It was one of the first peer -to -peer or P2P music sharing services.
So what it allowed people to do was to share and download MP3 music files for free directly from other users' computers instead of paying for CDs or downloads.
And this was a huge, huge deal because all of a sudden it made millions of songs available for free for everyone.
And it was incredibly popular.
They say, I don't know if those numbers are confirmed, but they say at its peak, it had over 80 million users.
It was so huge. And then the big names got really, really angry about this.
You mean record labels?
Record labels and artists.
Metallica, that hard rock group, if you know them, they sued.
Dr. Dre, I think, sued the rapper because they hurt music sales, obviously.
And the music industry sued Napster as well for copyright infringement.
And then finally, a court ruled that sharing copyrighted music without permission was illegal.
All of this happened within a relatively short period of time from the creation to the shutdown.
Yeah, very interesting.
And you guys, we all mentioned, quote unquote, free music.
And I suppose the word free was attached to that era of the Internet.
Yes. We just thought that everything on the Internet was supposed to be free.
Yeah. And then it didn't occur to us that this is violating copyright laws until a couple of years later, maybe.
I think you're absolutely right.
And I think that was the deal with Napster too, because I was introduced to Napster by a friend of mine and I just started using it because I thought I didn't put any thought into it.
Right. But yeah, of course, as we got more educated about, you know, who's losing out, then it became obvious that it's not the right thing to do.
Yeah, it was a time when I used to wonder who buys CDs?
Me! I supported my artists because I knew that, you know, this is the bread and butter of the artist's CD sales, but that was back in the day.
And while things have evolved in many ways, which we will get into in a second, fast forward to today, the impact on China's music industry has been massive, reshaping which artists get to play, how listeners listen, and where the money flows.
lows. So how did the crackdown transform the structure of China's music platforms and user behavior?
What's the impact on China's online music industry?
I'll say that as we go through the past decade, there are fewer and fewer online music platforms. Here's a recent report published by a Chinese music industry research platform that indicates many online music services is shut down unrestricted due to rising licensing costs.
And also back in July 2015, after the rules were issued, an online music sharing website called SongTaste shut down along with several smaller and also similar websites like Domi Music, Xiaomi Music.
They all shut down around 2018 and 2021.
And from over 3 .1 million music apps and nearly 700 music products and service enterprises in 2014, only a few dominant services remain today.
And that includes the major players like Tencent's QQ Music, the one I'm using these days, Kugo, Kuo, and also Wang Yiyun, the NetEase Cloud Music, and a few other major ones.
Yeah, the platforms you just mentioned, the app names, what a blast from the past. And each of them had these special features and attracted a certain type of people, but they all gradually shut down, leaving sort of the winner still on the stage.
But there's also a major change among the users because now I think Chinese music lovers are more accustomed to paying.
Yeah, there's 180 million paid users today.
So that I think the mindset shifted, right, from, oh, music's free for everyone.
Yahoo, it's a 24 hour music party everywhere all the time.
But no, now people are familiar with the concept and paid music consumption and having those types of memberships is quite commonplace now, right?
Right. That being said, according to a 2024 survey, 25, almost 26 percent are long term subscribers with music platforms. Another almost 26 percent have never paid for music and 49 percent only occasionally pay for music.
So under the trend of paid music content, China's I think we could say still early in the in the stage of penetration.
But it's also a breakthrough for the music industry to increase revenue in the future.
It's an opportunity there.
But we see that this shift, well, to paying for music contents, it has created new opportunities for capital investments as well.
Because, well, a strong copyright ecosystem already plays a key role in turning music platforms into, say, valuable businesses.
It's not just about protecting content and copyright, but also adding value in the eyes of investors.
In fact, this helped these platforms to secure higher valuations and easier access to funding.
Take Tencent Music, for example.
This one went public on the New York Stock Exchange in 2018.
And also Wang Yiyun, the NetEase Cloud Music, allowed with its own IPO in Hong Kong in 2021 as well.
So basically, what was once seen as an unprofitable industry has now gradually evolving into a legitimate monetizable business to attract more investors.
Tencent Music is huge.
I got this from SiriusXM, their business website.
side. Globally, Spotify is at number one at 37%.
This is the music streaming share for the market in 2025.
Spotify is number one with 37%.
Behind them, 10 % music at 18%.
Behind that, YouTube, then Apple Music, then Amazon.
This is big business, and a lot of people are listening.
Yeah, it's also enhancing China's voice and competitiveness in the international record music market as well, because nowadays we see numbers of people, our population listening to licensed music is gradually increasing in recent years.
The Digital Music Report 2012, published by the International Federation of the Phonographic Industry, the IFPI, indicates that China had suffered from an estimated 99 % digital piracy rate.
That's pretty high.
However, by 2018, the IFPI's Music Consumer Insight Report said that 96 of listeners in China were already listening to licensed music, and that's significantly higher than the global average of 62%.
So that was reported by the news outlet SixTone.
And it's only three years after the rules was implemented in July 2015.
So we still see a massive, say, increase of awareness among the Chinese people.
To really make sense of where we are today, we need to zoom out and look at the bigger picture.
These past 20 years, perhaps, I mean, they've been a wild ride from the free -for -all days of MP3 downloads to a more tightly regulated capital -driven streaming industry.
Two decades, decades two very different realities so let's look at the first era 20 uh 2005 to 2015 and how does that differ from the the second decade of 2015 to now i'll say it has a lot to do with what we're using to play the music right because back in 20 uh 2005 the number of pc internet users searched a lot and mp3 music websites also sprang up across the internet and these sites they helped engaged in just grabbing aggregating copying and distributing music in such a massive way with virtually no step required for the copyright holders consent and also that's when copyright owners they
had little negotiating powers yeah the websites started to disappear though because Because in that period, in that first part of that period, people were listening through their PCs, right?
But the number of music websites dropped from 400 to 16 between 2005 and 2015.
Because in the later part of the decade, as smartphones and the internet developed rapidly, then the demand changed, right?
Right. So the music consumption needs went from your computer to your mobile device.
And that's where you had platforms like Tencent's QQ Music or other ones that rose quickly during that period.
So back in the past decade, the 2015 to 2025 period, we call it a decade of legal enforcement and industry restructuring.
restructuring. Because over the past 10 years, we see China's online music industry gradually dominated by just a few major players, a few major platforms. And it started with the rising of online music platforms led by three internet giants, that includes Baidu, Alibaba, and Tencent.
And each of them have their own, say, unique style of developing their own path.
Tencent, back in July 15, 2016, announced a cooperation with China Music Corporation, and also combining QQ Music and several other music apps into its own umbrella.
And so that it becomes such a, say, a major hub for pop music and all the different genres, sometimes even podcasts nowadays that's newly added, I think in recent years.
So now it became one of the largest shareholder and completed the business integration by January 2017 already.
That's for Tencent.
But for Wang Yiyun, the NetEase Cloud Music, they took one alternative path.
So instead of competing on mass copyright acquisitions, it actually focused on independent music producers and user community engagements.
That's when I realized a lot of my friends who's interested in, say, indie music or smaller genre of music or one particular band or artist that's not so majorly known or commonly known to the general public.
So this is more of a niche strategy.
Back then, that's the label for NetEase cloud music.
And in that way, by April 2017, it had already attracted over 300 million users and completed a 750 million yuan or roughly 100 million US dollars series A founding round.
So that's quite successful for them as well to develop in a very, say, creative path.
and also net ease cloud music just have it has the best comments right because now like this didn't used to exist it has to only exist in the digital streaming era it's like under each song there's always people commenting and it the more popular the song is the more comments and somehow it it really depends on the kind of people you attract to your platform right and then with with NetEase, it's got like the most poetic people sharing their sentimental, some argue way too sentimental thoughts at that very moment.
And then it's become sort of like a new habit of me, and I suppose very, and many other people to check out these things as well, because you're immediately feeling like, oh, this is a community of people.
We're all looking at, we're sharing our feelings at a specific moment, listening to this song.
Oh, so you're one of those NetEase cloud folks i'm not i only go there for for the comments and sometimes when i use it as material for the show everything's show related employment related for young not always but yes uh what have these platforms in china i think it's particularly relevant to ask this question to pull in the users because we're talking about like for a decade or so of people really um you need to sell this idea and get people on board and to pay for stuff it ain't easy yeah um Tencent has has an interesting strategy so for their super VIP members they offer them priority access
to concert ticket purchases for popular artists which is a really great idea right you're gonna have first crack at these tickets because for popular artists they can sell out almost immediately right So they do that.
They'll also do free streaming of some digital albums for their super VIP members.
That platform also provides casual users with the option to listen to music for free if you want to watch some advertisements.
And therefore, you can increase your advertising revenue.
So that's not a lose for that platform.
That's just an extra win.
in what i realized in tenzin is that it really it's it really gets at um mobilizing the fandom culture for music artists and for promoting its own say music products in some way sometimes i find it really annoying yeah like i'm just there trying to listen to what's the new song of black pink and yet i'm not a fan and you're required to fit in certain criteria and be to be such a say a vip labeled person in order to just grab a listen of a music otherwise you just have to pay yeah Yeah, exactly.
Well, speaking of Blackpink, this is a big deal.
In May of 2025, Tencent spent approximately $177 million to buy HYBE's almost 9 .5 % stake in SM Entertainment.
SM Entertainment, you probably don't know what that is, but there's like a big three entertainment companies in Korea.
one of them is SM, the other's YG, and the other one's JYP Entertainment.
This will really help, right?
This will help them to strategically expand their presence into the K -pop scene, into the K -pop market, and it will help them really participate in South Korea's entertainment industry.
And for aligning more users to its platforms, I realized that a lot of the music platforms, they're good at buying one -year membership and get aligned with multiple other memberships for half a year or sometimes a year.
Bundles. Yeah, the bundles.
QQ Music is doing it and NetEase Cloud Music is doing it.
So yeah, that's how they win.
And China's music industry landscape is still having its blind spots, despite the progress we mentioned.
Gray areas around AI remixes, for example, fragmented licensing, I mean, and legal processes that many artists still find hard to navigate.
gate and also we heard these uh music streaming giants going for ipos but the artists who are literally doing the hard work because the product is the music and what are they getting from it so could we go through some of these you know gray areas yeah i mean musicians are still struggling right because there's high cost there's the low success rate that they're having to deal with the transparency of the legal system when defending their rights can be a challenge for artists as well um so this can leave musicians with little to gain and it could be songwriters who are looking for compensation for their
online infringements or it could be indie artists independent artists Who are challenging unfair platform licensing clauses together, these groups of people together face difficulties in gathering evidence.
And then it's really expensive when you get into the legal side of things.
Then the time that it can take for litigation, you know, going through the cycles, it can take a long time.
You know, AI covers, for example, typically involve three legal issues, lyric and composition copyright infringement, rights of sound recording producers if the original instrumental tracks are used, and then the potential infringements on the singer's right of performer.
performer all of those things together think about that in the legal system would take an incredibly long time to solve to uh to solve and there you're talking about the unauthorized use of a singer's voice that could violate their rights too and on say a market wise um distribution there are a lot of times still those unfair market competition occurring sometimes back in 2021 we We already kind of seen cases of how, say, major music platforms are being fined for harnessing the top resources and don't let the other music platforms having a share of it.
But nowadays, we still see major record labels, say, in digital distribution and platform negotiations still rely on strategies like high minimum guarantees, differential pricing or regional pricing to secure top tier artist resources.
sources. So this is still happening in the industry, and we look forward to future, say, alterations and improvements.
Yeah. In this aspect of things, I suppose China's no different to most other countries around the world.
Yeah, definitely. I mean, especially for smaller artists, you know, you can probably find Beyonce on any streaming platform, but for the smaller artists, it can be hard to crack into those platforms. Yeah.
I saw this report on CNBC.
see Spotify apparently pays artists about $0 .007 per stream, and that's before cuts from agencies and record labels, leaving many musicians with very little, needless to say.
And in 2018, Taylor Swift signed with Universal Music and pushed for a deal where all artists under the label would benefit from better streaming revenue terms, not just herself.
And that move obviously Obviously, it was very much praised across the industry.
But we're showing we're seeing that musicians with the negotiation power are doing that.
And we see Dong Ziqi doing something similar as Taylor Swift, re -recording her earlier music, etc. But some things have improved, but others haven't.
And this is definitely one of those discussions to be continued.
Coming up next, Motivational Monday.
more professional mondays yushan what do you have for us i have something that i acquired from from a podcast i listened to recently is from one of my favorite podcasts called the male robbins podcast and the episode is called feeling lost in your in your 20s you need to hear this so it's about a time when you you know, it's July and August is the time for people to for young people, young college graduates to start to enter the, say, the job market and try to secure a future career path.
And my boyfriend is kind of in the same path, but he's like more senior than his peers.
And he hears the younger peers talking a lot about where am I going?
Should I, you know, apply for a post graduate just to postpone the time of me trying to find a job.
But in the podcast, I heard here Here is how you should react to it.
So first of all, feeling lost in your early 20s is completely normal and is not a personal failing.
Because nowadays, young people, we are faced with endless career, relationship and life paths that's exacerbated by social media.
And she calls this a paradox of choice that previous generations perhaps didn't encounter.
Also had. Also had?
Yeah. In a different form?
No, it's the same thing.
Yeah, it's just social media is here to amplify.
Yeah, it's amplifying everything and makes you feel like you need to do everything.
You need to have everything accomplished before you turn 30.
But it doesn't have to be like that.
Your life is a long and very interesting path for you to discover.
And 30 is not like a stop to that.
You do not need to sprint all the way to that.
So this is something that, you know, I learned from the podcast and here to share.
Can I just comment briefly on that?
Yes, please. Please enjoy being lost in your 20s.
It's a rite of passage.
It's not meant to be a moment of panic.
It can be. But trust me when I say this.
When you get into your 30s and beyond, you will look back and say, being lost in my 20s was kind of a cool time in my life.
Yeah, in your 20s are your trial run.
And the stakes aren't as high as they feel now, okay?
In your 20s, you have something incredibly valuable, the capital to make mistakes.
It means time, energy, adaptability, and fewer long -term obligations.
So go try and fail and pivot and try again.
And that's the end of today's show.
We'll see you next time.
