Indie rock enters China through landmark streaming deal



Chinese music fans will soon have access to artists on more than 20,000 independent labels, following a landmark deal between the country’s biggest streaming platforms and UK-based agency Merlin.

Operated by tech giants Tencent, Alibaba and NetEase, the five platforms (QQ Music, Xiami, Kugou, Kuwo and NetEase Cloud Music) which come under the new deal are used by 90 percent of Chinese digital music listeners.

Previously, rival Chinese platforms would vie for exclusive rights to major labels like Universal Music and Sony Music, forcing music fans to use multiple apps to gain access to all their favorite artists.

NetEase Cloud Music and QQ Music are two of China's biggest streaming platforms.

Merlin represents 20,000 independent labels, and acts on their behalf to protect the digital rights of leading artists including Bon Iver, Arctic Monkeys and Wu Tang Clan.

In a statement on the company’s website, Merlin CEO Charles Caldas said “This is an exciting new chapter for Merlin,” adding that its record label partners “are now uniquely positioned to benefit from a set of truly transformative partnerships that will accelerate growth in one of the world’s most exciting and fast-evolving markets.”

Last September, Merlin announced its billionth US dollar paid in royalties to independent labels, after securing partnerships with Western streaming giants like Spotify, Deezer, Tidal and YouTube.

The Merlin deal, which was announced on Thursday, is unusual for not granting exclusivity to any one streaming platform. The move follows comments from China’s National Copyright Association made in September, which called for an end to exclusive rights in the music industry to achieve greater competition.

Last September, rivals Tencent and Alibaba agreed to share licensing rights across their platforms, bringing Universal Music, Sony Music and Warner Music to more listeners on their preferred streaming sites and apps.

More and more Chinese listeners are willing to pay for music streaming, with Western artists and record labels eager to enter a market with huge potential. A report last June found that more than 526 million people in China were using the top three streaming platforms (QQ Music, Xiami and Kugou), far outnumbering Spotify’s global user base.

UK band The XX recently performed a stadium tour of China. Their Young Turks label is part of the Merlin group.

However, Spotify has three times as many fee-paying subscribers than QQ Music, Tencent’s platform which has as much as 78 percent of the total market share in China. While Chinese cinemas raked in 45.3 billion yuan (6.9 billion US dollars) in 2016, research by Jefferies estimates the paid music market in China was worth less than three billion yuan (459 million US dollars) in 2017.