China’s Music Industry: Numbers. Constraints. Potential.


This much is certain: a music industry worth north of $50 billion in 2019 ($53 billion or 370 billion yuan, to be more precise) and with a YOY growth rate representing a considerably above-average 8% needs to be taken seriously. Needless to say, the Chinese authorities tend to agree and as such, have prioritized investments aimed at increasing the competitiveness of the nation’s music industry, with investments ranging from (of course) infrastructure-related ones such as live venues to technology-oriented ones, for example investments pertaining to music streaming (furthermore, China does not shy away from exploring cutting-edge sectors such as AI composition, musical emotion recognition and so on, even if its efforts in this respect are still in the early phases).

The conditions most definitely seem to be there for China’s music industry to continue booming in the long run, even with occasional economic context-generated hiccups. And, indeed, various cities/regions have plans one can consider on the ambitious side.

For example, we have Beijing’s ambitions of representing a worldwide hot spot as far as the music industry is concerned by 2025, ambitions which revolve around its music industry growing all the way to $17 billion by 2025, roughly two times its current size. From enabling artists to take advantage of increased IP protection to building offline recording venues as well as fostering online options, Beijing most definitely has clear plans with respect to its music industry. It is worth noting that Beijing is not alone in this equation. We also have less-covered examples such as Chengdu, which achieved impressive results when it comes to anything from its local rap scene to classical music and the list of examples could go on and on.

As is the case with other industries, Chinese companies are becoming better and better-positioned, most notably Tencent Music Entertainment (which represents a Spotify-Tencent JV, that among other things also acquired a 10% Universal Music Group stake in late 2019) and all things considered, it does seem that the domestic music scene has a lot going for it: the numbers seem there and in terms of potential, the sky is the limit.

Unfortunately, there are forces at play that can inhibit the growth of China’s music scene, powerful forces at that. As many undoubtedly suspect, we are of course referring to the censorship dimension, with the Communist Party of China having pretty much zero tolerance for anything even remotely political in nature. It should therefore come as no surprise that, for example, a wide range of international celebrities have essentially been banned from live performances, from Lady Gaga to… well, Justin Bieber.

Furthermore, CCP actions also risk placing a ceiling on the growth of peculiar but potentially lucrative sub-sectors such as the rap dimension. As strange as it may seem, the rap scene can now pretty much be considered mainstream in China, especially thanks to the resounding success of reality programs such as The Rap of China. This success unfortunately bought rappers to the attention of the Communist Party of China, which made it clear that these artists are exhibiting behavior which is most definitely not in line with CPC values, from their tattoos to their aggressive lyrics.

At the end of the day, the Communist Party of China finds itself in a bit of a predicament as far as creative sectors such as the music industry are concerned:

  1. Should it grant complete creative freedom to the sectors in question, it would most likely be the understatement of the century to state that they would boom, much more so than in the present. However, by doing this, the population of China would risk receiving too much of a let’s call it “freedom of speech” sample, with it being difficult to predict which cultural mega-trends would be set in motion, trends most likely anything but consistent with the status quo preservation agenda of the Communist Party of China
  2. Should it do the exact opposite by inhibiting creative freedom too aggressively, there would be two broad categories of disadvantages. On the one hand, financial disadvantages that have to do with the fact that an excruciatingly overly censored music industry can impossibly compete with the proverbial West. On the other hand, the mid to long-term political implications should not be ignored either, with it being increasingly likely that a better and better educated as well as informed Chinese population (which despite measures such as the easily-bypassable Great Firewall of China) will be more and more frustrated with the fact that creative expression is limited to such a degree at home

All in all, things are fairly straightforward as far as China’s music industry is concerned in our view.

On the one hand, as numbers such as the sheer current size of the industry as well as impressive YOY growth rates make clear, immense potential is on the table and just like China has grown tremendously by unleashing the productive capacity of roughly 1.4 billion individuals, a compelling case could be made that the same can be achieved by unleashing their creative capacity in the music sphere.

On the other hand, at this point in time at least, China’s music industry is nowhere near parity with that of the proverbial West and even more so, there are very powerful forces at play which limit the growth of this space, forces primarily pertaining to the political implications of creative freedom, with the Communist Party of China seeming anything but willing to provide relief in this direction.

Still, after drawing the line, it should be more than obvious that there is quite a bit of money on the table for players who position themselves wisely so as to grab a piece of this rapidly increasing pie. From creating businesses which enable Chinese consumers to satisfy various needs to investing in assets related to companies that do just that, opportunities abound. Should you and/or your organization be interested in exploring them granularly, our team is here to help.