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In its third-quarter earnings report Tuesday (Nov. 15), China’s leading music streaming company Tencent Music Entertainment Group (TME) said quarterly net profits soared 39% to RMB 1.09 billion ($154 million USD) from last year as the number of online music subscribers reached a record 85.3 million.
TME, which owns streaming platforms QQ Music, Kugou and Kuwo, plus karaoke app WeSing, reported that music subscriptions rose 18.3% to RMB 2.25 billion (USD $316 million) for the third quarter ending Sept. 30 compared to the same period in 2021. The number of subscribers rose by nearly 20%, up from 71.2 million in the third quarter 2021.
“As we are employing a balanced approach to grow paying users…revenues from online music services increased at a healthy pace in the third quarter, driven by year-over-year gains in subscriptions,” Cussion Pang, TME’s executive chairman, said in a statement. “Meanwhile, effective cost optimization measures and improved operating efficiency led to increased profitability amid challenging macro conditions this quarter.”
Overall, online music services revenues rose by 18.8% to RMB 3.43 billion (USD $482 million), but that wasn’t enough to offset a 20% decline in revenues from social entertainment and services, the company’s other main business unit. TME’s total revenues fell by 5.6% to RMB 7.37 billion (USD $1.04 billion).
Media companies have reported widespread declines in mobile revenues for the third quarter, as increased prices for many and the worsening economic outlook globally has caused consumers to rethink everyday expenses. TME was not spared from the trend. The number of monthly active mobile music users fell by 7.7% to 587 million in the quarter, compared to 636 million in the third quarter last year — a decline the company attributed to casual listeners dropping off the platform.
Monthly average revenue per paying user of TME’s online music edged 1% lower, to RMB 8.8 million (USD $1.24 million) compared to RMB 8.9 million (USD $1.25 million) during the year-ago period.
The company bought back $800 million of its own stock in the third quarter, part of a $1-billion stock buyback program it announced last spring.
In September, TME launched a secondary listing on the Hong Kong Stock Exchange; it was already publicly traded on the New York Stock Exchange in the United States. Its move to issue secondary shares in Hong Kong followed similar moves by other big Chinese companies seeking to safeguard themselves against potential ramifications of the geopolitical tensions between China and the U.S.
Editor’s Note: This story was first published and translated into English by Billboard China. It was condensed and edited for style by Billboard editors in the U.S.
BEIJING — Li Ronghao has recently taken up painting. So dedicated is he to this new artistic pursuit that he once sat in front of the canvas for 11 hours without realizing. This intense concentration brought on by the learning process gives him a sense of great joy.
“I never thought that I would find joy in the pursuit of knowledge, as I never excelled in school,” he tells Billboard China for their latest cover story.
Despite having six studio albums under his belt and a label deal with Warner Music Group — not to mention being one of the wealthiest 100 celebrities in China, according to Forbes China — Li nevertheless does not feel it’s necessary to set ambitious goals for every endeavor one takes on. “No one can predict the outcome, so just seize the creative impulse as it comes, let it express itself naturally, and leave the rest to time.”
Li, a singer/songwriter, actor and producer, has been a coach on Sing! China, the popular Chinese singing competition television series, since 2019. He does not find the idea of having the contestants’ “entire fate in your hands” to be appealing. Instead, he simply hopes to find another outlet, in addition to his own musical works, through which he can realize his self-worth. In the process, he has found a group of like-minded young people who are willing to take in what he has learned in his years with the program.
He could have simply played the role of a coach on the show. Instead, in light of contestants referring to him as a mentor, he felt he had to go the extra mile by checking and modifying the demos created by contestants in private. “When I was a child, I always wanted to have a big brother who could help me, like what I am doing now,” he says.
Looking back at the journey that he walked alone, Li says he never expected to live the life of a so-called celebrity. He first picked up a guitar when he was 9 years old, with his knowledge of music theory being virtually nonexistent. Entering adolescence, he became acquainted with a renowned instructor and began to study how to play double bass. He ended up falling in love with heavy metal music and felt he would become a rock musician. With this goal in mind, he learned any and all musical skills he could, oblivious to the fact that he would eventually end up becoming a one-man band.
After choosing to settle down in Beijing, his life was far from easy. It was not until he sold his first song that he chose to devote himself to the creation and production of pop music. For three or four years, Li hardly went out, devoting every waking moment to his work. Half of all the singers in the Mando-pop scene ended up asking him to write or orchestrate songs for them.
Some fans dug into his past and found that even when working behind the scenes, Li’s style jelled with theirs. This resulted in seemingly improbably collaborations such as making a record with Long Piao-piao, the “Singer Queen of Southeast Asia” in the 1980s.
Although many attribute his first studio album, Model, for turning him into an “overnight success” in 2013, this success was in fact rooted in “years upon years of preparation, and a long period of hardship.” Li “took the plunge” and released his first album after one of his friends in a production company offhandedly asked Li if he had a demo during a casual conversation.
At the 25th Golden Melody Awards, the project was nominated for best album while Li himself was nominated for best male singer, best lyricist, best newcomer and best producer. He eventually went home with the best new singer award.
Despite Li going on to release five more albums, he still believed that his musical potential remained largely unexplored. The more he dived into the creative process, the more aspects of himself he found that could be improved. In this respect, he says he is no different from his “students.”
The public might believe that it’s becoming more and more difficult for young musicians to become famous. Thousands of them enter this circle every year, but only a few gain a firm foothold. Li said that opportunities and risks have coexisted in each era.
“People may regard the past as this kind of golden age, but you don’t realize how difficult it was for us to record a song back then. I was so excited after entering the recording studio for the first time that I couldn’t sleep that night. When I finally did fall asleep, I dreamed about the recording studio. Now, facilities like that are ubiquitous. You can even record a song in your own home if you like. If you wanted to be seen then, you had to wait for the record companies. Now, there are tons of different channels that you can use to reach your audience directly. As long as your music is creative and has meaning, being discovered in this day and age is much easier than it used to be.”
After a pause, Li suddenly adds, “The most important thing is to start the journey as early as you can and never falter. Once you stop, you will find it is incredibly difficult to be ‘seen’ again.”
“Intentionally trying to create something in a certain style is a useless endeavour”
Professionals are able to perceive the inner musical workings present in his style, but even ordinary listeners can point out a composition by Li, even those where he is not the singer. However, such a prominent and distinctive style has led to some people criticizing his work as lacking variety.
“Having a highly distinctive style is precisely what I’m after,” he says. “Intentionally crafting a personal style is next to impossible. It can only be formed naturally as you gradually progress though the highs and lows of your creative journey as an artist. As a musician, I feel I’m very lucky, as the public happens to like what I enjoy creating.”
He has dabbled in R&B, soft rock, disco, chill-out, synth-pop, and other musical styles in his hits and less popular singles.
Li is very much a musician who rewards repeat listens. His talents take on new life on the second or third listen, more so than in the initial play-through.
Several songs in his new album are in the Hong Kong style. His cover of Beyond’s “Lover” along with “Free Soul, ” which pays tribute to classic Hong Kong cinema, ooze with nostalgia. The energetic synthesizer provides a fitting bed for Li’s warm vocals. “You just need to nail down the right feel,” he says.
Where does this “right feel” come from? It is the end product of years of contact with the culture. Li is a huge fan of Hong Kong pop culture. He watched endless Hong Kong movies in his childhood. To this day, he still loves listening to old Cantonese songs. He even watches clips from old TBV dramas when he is waiting in the makeup chair. Though the Guangdong music scene is no longer in its golden age, Li is still very familiar with Terence Lam and other emerging musicians whom he has a great fondness for.
Li never sets limits for himself when it comes to creation. Whether it’s the keyboard or the guitar, he will use whichever is nearer to him when inspiration strikes, and he will push everything aside until he is satisfied with what he has created. This mind-set has provided him with many standout moments. For example, the lyrics and music of “Li Bai” burst into his mind almost simultaneously. He finished “Growing Fond of You” and “If I Were Young,” two hit singles, while on a five-hour high-speed train journey.
Of course, some songs with which Li himself is extremely satisfied have not taken off immediately. “I composed ‘Mom and Dad’ in 2015, and it only became popular last year. ‘Quit Smoking’ is a song from my fourth album, yet it wasn’t until I released my sixth album that many people even heard it. I don’t mind if a song isn’t an immediate hit, as sometimes they simply need time to find their audience.”
When it comes to writing lyrics, Li does not deliberately try to elicit emotional reactions or write about situations outside of his own experience. He only embraces inspirations that come naturally. People often think that his lyrics are about himself, but Li says, “People are touched because the feelings expressed in these songs are universal.”
“Streamlined, optimistic, and passionate about learning”
In addition to the eight songs that have been released, Li has also prepared a faster-paced song and an R&B tune. The most invigorating experience this time around was his collaboration with Kulilay Amit (who goes by the stage name A-Mei) on “Equivalence Relation.”
He says he wrote the song, sent it to A-Mei, and asked if she was interested in lending her vocals to the track. Without hesitation, A-Mei replied, “Sure.”
The only unfortunate aspect for Li was that everything had to be recorded online due to the great distance between them.
The thing that Li has struggled most with over the past few years has been the inability to hold live concerts. Nowadays, artists all over the globe are holding online concerts, including many of Li’s friends in the musical world. Li has watched many of these concerts and found them to be a great deal of fun but has not held any online shows of his own.
“I attach a great deal of importance to the idea of interaction,” he says. “Watching a performance at home on your TV or phone cannot reproduce the power of attending a concert in-person. With a concert, you’re getting top-level equipment, lighting effects, and tens of thousands of people enjoying the same song all at once. Having said that, there’s no denying that online concerts are far more convenient. For example, the traffic jam after a live concert can be rather headache-inducing.”
Short videos are now a global trend, and platform algorithms automatically recommend snippets of songs directly to users. This has changed the music industry both at home and abroad dramatically and put pressure on conventional record musicians such as Li.
Li, however, isn’t feeling the pressure. “It’s not as if there are fewer quality songs than before,” he says. “The songs that we enjoyed in the past haven’t gone anywhere. We just have more choices now. Whether or not you feel this so-called pressure all boils down to your mind-set.”
He considers it “mandatory” for musicians in the industry to read up on popular music on the Billboard charts, as it allows them to get a better sense of what’s going on in the music world, and continually provides new sources of inspiration.
“It’s the quality, not the language or anything else, that will decide if we can truly break into the international market,” he says.
Does Li want to remain famous for decades to come, or would he be satisfied with making a short, but lasting, impression? He smiles slyly. “I wouldn’t mind having both,” he says. “But for now, I prefer to just live my life.”
Li Ronghao on the cover of Billboard China.
XiaoGang@curvart
Universal Music Publishing China (UMP China) has signed a global publishing agreement with RYCE Publishing, a music and entertainment company with an over 700-song catalog. RYCE will use UMP China as its publishing administrator for some of China’s biggest C-pop songs from chart-topping artists like Jackson Wang.
Through the deal, UMP China will provide global infrastructure and opportunities for RYCE’s roster as well as handle the Greater China rights for hundreds of major K-Pop hits that are under RYCE’s control including from Korean acts GOT7 and TWICE.
“We saw the rise of J-pop three decades ago and its massive influence on audiences across Asia. Now K-pop is a global phenomenon as we all know, and there has been a very key bridging force between these genres in the last two decades,” says Joe Fang, managing director of UMP China. “With China rising to become the sixth biggest music market of the world, I believe the time of C-pop is here. RYCE Publishing, with its hybrid talents and border-crossing catalogs, is a central piece of that next bridging force and I’m thrilled that UMPG will play an instrumental role in supporting these future chapters of music history.”
Joe Fang
Courtesy Photo
UMP China will now administer top tier C-Pop songs in the RYCE catalog, including “Manual to Youth” and “Adore” performed by TFBOYS; “100 Ways,” “I Love You 3000,” co-written and performed by Jackson Wang (王嘉尔); “Jiao Huan” performed by Zhou Shen(周深), “EASIER,” performed by Amber Liu (刘逸云) featuring Jackson Wang and “Xiao Juan,” performed by Sitar Tan(谭维维).
On the K-Pop side, UMP China will now help RYCE Publishing with the promotion of Korean hits for acts like Super Junior, EXO-CBX, GOT7, TWICE, and more in the Greater China region.
RYCE Publishing, is a division of RYCE Entertainment, an entertainment giant based in Beijing. With music publishing, agency, marketing, investing, and brand operating divisions, it specializes in managing music catalog and media resources.
UMP China’s partnership with the local company highlights Universal’s continued efforts to push deeper into China’s music business. Last year, UMP China expanded from its original Beijing headquarters to add a second office and studio space in Shanghai and has also focused on creating songwriting camps to foster the careers of local signees, including one all-female camp with She Is The Music.
China’s music market has grown in size by more than 30% in each of the past two years, according to IFPI, which said total revenues for 2020 were $791.9 million (the total for 2021 was not available). Meanwhile, royalties paid to songwriters and composers rebounded with 8.48 billion euros ($8.49 million) in 2021, a rise of 7.2% from 2020 — but still down 52% from the pre-pandemic levels of 2019, according to CISAC, the global rights management organization.
All three major labels continue to explore opportunities in China, even with the uncertainties surrounding government regulation of music and tech companies like Tencent Music Entertainment (which publishes Billboard China), which have been forced to end exclusive arrangements with the majors for their repertoire in the past two years. Those exclusive deals followed years in which China’s music industry was known for rampant piracy that made it tough to make money in the country.
“We hope that everyone respects music copyright,” says Yunyun Wang, managing director of RYCE Publishing. “If we could all do that, every artist in China music market will be motivated to work harder to make decent products, creating a healthy environment for us all.”
Daryl K, founder and CEO of RYCE Entertainment, says in a statement: “We protect and promote our writers with a vengeance and we’re excited to continue doing so with UMP China. We’re looking forward to the fruits of our partnership.”
Andrew Jenkins, president of Asia Pacific, UMPG, says that RYCE Publishing’s “remarkable creative drive has led to a huge number of hits and great commercial success for RYCE Publishing so far. I look forward to an even more successful future as both companies work together to further build on the global impact of RYCE Publishing in the coming years through this new agreement.”