China's Streaming Landscape: Apple Music's Expansion and the Dominance of Domestic Players

In a strategic move to bolster its presence in the Chinese market, Apple Music has struck a new deal with China Mobile, the country's largest wireless carrier. This partnership aims to provide China Mobile's vast customer base with easier access to Apple's music streaming service, further intensifying the competition in China's dynamic and rapidly evolving digital music landscape.

Unlocking the Potential of China's Vast Music Streaming Market

Partnering with China Mobile: A Game-Changer for Apple Music

Under the new agreement, China Mobile customers will be able to subscribe to Apple Music directly through the carrier's app or at its retail outlets. This integration is expected to significantly enhance Apple Music's accessibility and visibility within the Chinese market, which boasts over 1 billion mobile users. By leveraging China Mobile's extensive reach and customer base, Apple Music aims to expand its foothold and challenge the dominance of domestic streaming giants.

Domestic Streaming Titans: Tencent Music and NetEase Cloud Music

The Chinese music streaming market is currently dominated by local players, with Tencent Music Entertainment (TME) and NetEase Cloud Music leading the charge. TME's streaming platforms, including QQ Music, Kugou, Kuwo, and the karaoke app WeSing, have amassed an impressive 117 million paying users and 571 million overall monthly active users as of the second quarter of 2021. Meanwhile, NetEase Cloud Music boasts 41.8 million paying subscribers, further solidifying the strength of domestic streaming services in the Chinese market.

China Mobile's Migu Music: A Formidable Competitor

China Mobile, the world's largest telco in terms of reported paying users, has also established its own music streaming service, Migu Music. According to the company's reports, Migu Music has an impressive 130 million paying subscribers, underscoring the significant presence of domestic players in the Chinese music streaming landscape.

Spotify's Absence: A Strategic Partnership with Tencent Music

Notably, Spotify, the global music streaming giant, has so far stayed out of the Chinese market. This strategic decision is reportedly due to an agreement, either explicit or implicit, with Tencent Music Entertainment. Spotify and TME own stakes in each other, and Spotify's mainland China strategy has been described as its "investment in Tencent Music."

Challenges for Apple Music in China

Apple Music has faced challenges in rivaling the reach and popularity of domestic Chinese music streamers. According to Daxue Consulting, one of the key factors is the limited collection of songs available on the Apple Music platform in the Chinese market. China is known to impose strict regulations and censorship on foreign music, particularly targeting the content of song lyrics.Furthermore, many of Apple Music's features, such as podcasts and radio, are not readily available in China. However, the company is reportedly making efforts to address these gaps, such as introducing Apple Music Classical to the Chinese market.

The Reluctance of Global Players to Enter the Chinese Market

The reluctance or inability of many music and entertainment companies to enter the Chinese market has been highlighted by industry leaders. Live Nation CEO Michael Rapino has openly stated that his international expansion strategy excludes China, citing the difficulty of navigating the market's strict censorship and regulations."They won't let most artists in because they censor all the lyrics. Not a good business," Rapino said, underscoring the challenges faced by global players in the Chinese music industry.

Apple Music's Unique Advantage: The Douyin Partnership

Despite the challenges, Apple Music does have a unique advantage in the Chinese market – its partnership with Douyin, the Chinese sibling app of TikTok. This partnership, which includes Douyin's membership in the Apple Music Partner Program, provides Apple Music with a valuable foothold in the Chinese digital music ecosystem.As the only Western music streaming service operating in China, Apple Music's strategic alliance with Douyin could prove crucial in its efforts to gain a stronger foothold in the highly competitive and regulated Chinese market.